Tax court of Canada | Tax | General principles | Prospective or retroactive legislation
Taxpayer worked as mechanic for several years and was member of municipal employee pension plan. On January 1, 2009 company established pension plan for senior executives of company (new plan) and taxpayer was only member of new plan. New plan was registered as pension plan pursuant to Income Tax Act effective January 1, 2009. Taxpayer transferred commuted value of his municipal employee pension to new plan. In 2013, Minister of National Revenue decided that new plan did not qualify for registration under Act and gave notice of intention to revoke new plan’s registration. Minister issued notice of revocation which purported to revoke registration of new plan effective January 1, 2009 and on same day reassessed taxpayer’s 2009 tax year to include commuted value of municipal employee pension pursuant to s. 56(1)(a). Approximately three and one-half years later, Minister issued proper notice of revocation, which revoked registration of new plan effective January 1, 2009. Taxpayer appealed. Appeal dismissed. Facts necessary to support reassessment did exist when reassessment was issued because s. 147.1(12) caused them to exist retroactively. When Minister reassessed taxpayer in 2013, new plan’s registration had not yet been revoked. However, when that registration was ultimately revoked in 2017, revocation was effective as of January 1, 2009. Basis for reassessment was and always had been that commuted value of municipal employees pension was transferred to non-registered pension plan. Due to retroactive nature of revocation, facts underlying that basis of reassessment were always present. Section 152(9) did not come into play because there had been no change to factual basis of reassessment.
Mammone v. The Queen (2018), 2018 CarswellNat 91, 2018 TCC 24, David E. Graham J. (T.C.C. [General Procedure]).
