Young v. Minister of National Revenue, (1989) 99 N.R. 326 (FCA)

• Judge: Heald, Urie and Hugessen, JJ.A.
• Court: Federal Court of Appeal (Canada)
• Case Date: April 13, 1989
• Jurisdiction: Canada (Federal)
• Citations: (1989), 99 N.R. 326 (FCA)

Young v. MNR (1989), 99 N.R. 326 (FCA)

MLB headnote and full text

Her Majesty The Queen (appellant) v. Leonard R. Young (respondent)

(A-1628-83)

Indexed As: Young v. Minister of National Revenue

Federal Court of Appeal

Heald, Urie and Hugessen, JJ.A.

April 13, 1989.

Summary:

A taxpayer purchased investment publication subscriptions to assist him in deciding on the purchase and sale of investments in company shares, managing such investments and generally in the administration of an expanding portfolio of capital assets. The Minister of National Revenue ruled that the subscriptions were a capital outlay and not part of the adjusted cost base of the investments. The Tax Review Board and the Federal Court of Canada, Trial Division, agreed that the subscriptions were a capital outlay, but ruled that they were part of the adjusted cost base. The Minister appealed.

The Federal Court of Appeal held that the subscriptions were not part of the adjusted cost base and were a capital outlay and restored the Minister's assessment.

Income Tax - Topic 1303

Income from a business or property - Deductions not allowed - Capital outlays or losses - A taxpayer purchased investment publication subscriptions to assist him in deciding on the purchase and sale of investments in company shares, managing such investments and generally in the administration of an expanding portfolio of capital assets - The Federal Court of Appeal held that the subscriptions were not expenses to produce income, but were capital outlays and not deductible under s. 18(1)(b) of the Income Tax Act - See paragraphs 2 to 9.

Income Tax - Topic 1744

Capital gains and losses - Capital gains - Adjusted cost base - Investment publication subscriptions - A taxpayer purchased investment publication subscriptions to assist him in deciding on the purchase and sale of investments in company shares, managing such investments and generally in the administration of an expanding portfolio of capital assets - The Federal Court of Appeal held that the subscriptions were not part of the adjusted cost base of the investments under s. 40(1) of the Income Tax Act - See paragraphs 1 to 2.

Cases Noticed:

Minister of National Revenue v. Stirling, [1985] 1 F.C. 342, appld. [para. 2].

British Insulated and Helsley Cables Limited v. Atherton, [1926] A.C. 205, consd. [para. 6].

Sun Newspapers Ltd. v. Federal Commissioner of Taxation (1938), 61 C.L.R. 337, consd. [para. 6].

B.P. Australia Ltd. v. Commissioner of Taxation of the Commonwealth of Australia, [1966] A.C. 224, consd. [para. 6].

Johns-Manville Canada Inc. v. Minister of National Revenue, [1985] 2 S.C.R. 46; 60 N.R. 244, consd. [para. 6].

Neonex International Limited v. Minister of National Revenue (1978), 22 N.R. 284; 78 D.T.C. 6339, consd. [para. 6].

Firestone v. M.N.R. (1987), 77 N.R. 59; 87 D.T.C. 5237, consd. [para. 6].

Minister of National Revenue v. M.P. Drilling Ltd. (1976), 12 N.R. 17; 76 D.T.C. 6028, consd. [para. 6].

Irrigation Industries Limited v. Minister of National Revenue, [1962] S.C.R. 346, consd. [para. 7].

Statutes Noticed:

Income Tax Act, S.C. 1970-71-72, c. 63, sect. 18(1) [para. 2]; sect. 40(1) [para. 1].

Counsel:

I.E. Lloyd, for the applicant Minister;

L.A. Green, for the respondent.

Solicitors of Record:

John C. Tait, Q.C., Deputy Attorney General of Canada, Ottawa, Ontario, for the applicant Minister;

Thorsteinsson, Mitchell, Little, O'Keefe & Davidson, Vancouver, B.C., for the respondent.

This case was heard on April 4, 1989, at Vancouver, B.C., before Heald, Urie and Hugessen, JJ.A., of the Federal Court of Appeal.

On April 13, 1989, Urie, J.A., delivered the following judgment for the Federal Court of Appeal: