The Permissibility of Surplus Stripping: A Brief History and Recent Developments
Bibliographic record
Abstract
"Surplus stripping" seeks to structure payments received by an individual from a corporation as capital gains rather than dividends, so that the payments are taxed at a lower rate. While Canada's courts have typically held that there is no anti-surplus-stripping scheme in the Income Tax Act, recent decisions of the Tax Court of Canada and the Federal Court of Appeal have found against taxpayers that have engaged in surplus-stripping transactions. This article considers the extent to which surplus strips remain permissible under the Act and, in particular, considers the application of subsection 84(2), section 245 (the general anti-avoidance rule [GAAR]), and the specific anti-surplus-stripping provisions in sections 84.1 and 212.1. In assessing the permissibility of surplus-stripping transactions, the authors briefly review the relevant legislative history and identify various themes that have emerged from the jurisprudence on GAAR and subsection 84(2). The authors conclude that, notwithstanding recent court decisions, certain surplus-stripping transactions should remain permissible.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.006 | 0.010 |
| Meta-epidemiology (narrow) | 0.000 | 0.001 |
| Meta-epidemiology (broad) | 0.001 | 0.001 |
| Bibliometrics | 0.005 | 0.007 |
| Science and technology studies | 0.003 | 0.021 |
| Scholarly communication | 0.009 | 0.009 |
| Open science | 0.002 | 0.002 |
| Research integrity | 0.005 | 0.008 |
| Insufficient payload (model declined to judge) | 0.006 | 0.001 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".