The BC courts continue to do their part to revive rectification as an important tool for fixing tax mistakes (or, more properly, delineate better the circumstances in which the tool can be used). See 5551928 Manitoba Ltd. (Re), 2018 BCSC 1482, aff’d 2019 BCCA 376. In Manitoba, the corporate taxpayer had declared an excess capital dividend because of a (very common) misunderstanding on the part of the accountant about when the gain from a disposition of eligible capital property was to be included in the taxpayer’s capital dividend account. The BC Court of Appeal distinguished Fairmont Hotels, 2016 SCC 56, on the basis that rectification to reduce the amount of the dividend to the balance of the corporation’s capital dividend account simply accomplished the directors’ original intention.
Rami Pandher “Rectification Is Back—Is Rescission Next?” 20:1 Tax for the Owner-Manager (January 2020).
