In Twomey v. The Queen (2012 TCC 310), the sole issue was whether shares were “issued” to the taxpayer in 1995, and not in 2005.  The taxpayer argued that 100 shares were issued to him in 1995, and that 77 of these were sold in 2005.  The taxpayer further claimed that the capital gain exemption (“CGE”) for “qualified small business corporation shares” sheltered the gain arising on that sale.  The CGE required that the 77 shares be held for at least 2 years prior to the sale.  The CRA denied the CGE on the basis that the shares were issued in 2005 (and not 1995).  The problem was that the minute books for the company only showed that 1 share was issued to the taxpayer in 1995 (resulting from a miscommunication between the corporate lawyer and the accounting advisors).  “Correcting resolutions” were prepared in 2005 (before the sale), stating that 100 shares were issued to the taxpayer in 1995.  The Tax Court found that, in fact, 100 shares were “issued” in 1995.  The company’s general accounting ledger showed a subscription of 100 shares (fully paid) in 1995, the financial statements for the 1995 period showed an issuance of 100 shares (fully paid), and the tax return for the 1995 period showed 100 shares (fully paid).  All these documents were approved by the directors of the company at the time, representing “tangible corporate evidence” contradicting the original 1995 entry in the minute books.  Accordingly, the 2005 “correcting resolution” (in the minute books) was not “retroactive tax planning”, nor did it require any “rectification order” from a court.  The 2005 resolution simply recorded the actual facts (and not mere intentions), as they existed in 1995.