Gimmie Shelter

Advisor's Edge

2007-01-18

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Just over a year after the release of the Federal Court of Appeal's now-infamous trio of decisions involving donation tax shelters, Nash, Tolley and Quinn (see Advisor's Edge Report, "Gift Low No-No", December 2005), the Canada Revenue Agency has attacked and won yet another case (McPherson v The Queen, 2006 TCC 648) involving a donation scheme with a 75% "kickback" feature.

Grant McPherson, an investment adviser in B.C., invested in a tax shelter called the association for the Betterment of Literacy and Education ("A.B.L.E".). The shelter operated for several years before being deregistered as a charity in 1999. In 1996, the year in question for McPherson, the shelter was promoted as the "Charitable Donation Program".