Interrelated Transaction

"The determination of whether the cash paid by Mr. Walby and Mr. De Las Alas was a gift is not confined to only the transactions directly related to the payment of the cash. This Court in Maréchaux v. Canada, 2010 FCA 287, confirmed the finding that there was just one interconnected transaction and that no part of it could be considered a gift given in expectation of no return. The Tax Court Judge set out facts supporting the view that there was only one interrelated arrangement, and none of those findings were challenged on appeal. Furthermore, the appellants themselves considered the transactions to be interconnected. As noted by the Tax Court Judge, the appellants expected to be enriched as a result of their participation in the GLGI Program, and they would only be enriched if the transactions were interconnected. There is no merit in the appellants’ argument that determining whether a taxpayer has made a gift is based only on confirming that the amount indicated on a particular receipt was paid. The determination of whether a gift is made is based on all the relevant circumstances and, in particular, all components of a single interrelated transaction. The Tax Court Judge did not err in treating the GLGI Program as one interrelated transaction."