The Supreme Court of Canada (SCC) has allowed the Attorney General of Canada’s appeal in Canada (Attorney General) v. Collins Family Trust, 2022 SCC 26. In doing so, a majority of the SCC held that taxpayers may not resort to equity in order to undo or modify a concluded transaction or its documentation to avoid a tax liability arising from the ordinary operation of a tax statute. Thus, the subject taxpayers were barred from obtaining the equitable remedy of rescission in regards to transactions implemented to protect corporate assets from creditors without incurring income tax liability.

A more detailed blog post analyzing Collins Family Trust will be forthcoming.