Canada: Clarifying The Uses Of Amended Returns In Vine Estate v. Canada

The Federal Court of Appeal's ("FCA") ruling in Vine Estate v. Canada (2015 FCA 125) ("Vine Estate") reminds taxpayers of the importance of filing their original tax return correctly and applying the appropriate degree of care in the process.  The FCA ruled that an amended return under para. 164(6)(e) of the Income Tax Act ("ITA") cannot cure a misrepresentation in the original filing.  The ruling clarifies the scope of loss carry-back provisions for estates in ss. 164(6).  However, taxpayers should be aware that an amended return for an estate can include information enabling the Canada Revenue Agency ("CRA") to reassess past the normal reassessment period.  In Vine Estate, the taxpayer's amended return drew the CRA's attention to a misrepresentation in the original return.  The FCA held that the CRA's reassessment was permitted by ss. 152(4) based on the failure of the estate of Stanley Vine ("Estate") to exercise the required degree of care in reviewing the original final return prepared by its accountants.

In Vine Estate, the Estate appealed a reassessment of the deceased's final tax return that was issued after the normal reassessment period.  In the original return, an accounting firm did not include an amount in income for recaptured capital cost allowance in relation to the deceased's deemed disposition of an interest in property located at 3000 Victoria Park ("Victoria Park Recapture").  While the deceased directly held a one-half beneficial interest in the property, the firm treated the property as if it were held by a partnership in which the deceased was a partner.

In the year following the assessment and filing of the final return on June 7, 2004, the Estate realized a capital loss.  To have the capital loss deemed to be the capital loss of the deceased in his final taxation year, the Estate filed an amended final return for the deceased as required under para. 164(6)(e).  The amended return also reported the Victoria Park Recapture that the accounting firm had omitted from the originally filed final return.

Based on the amended return, the CRA reassessed the Estate under ss. 152(4) to include the Victoria Park Recapture in the deceased's net income.  Although the Estate appealed this reassessment, the appeal was unsuccessful at both the Tax Court of Canada ("TCC") and the FCA with respect to the Victoria Park Recapture.  The FCA held that an amended return cannot place an expiration date on the reassessment period under ss. 152(4), stating that the Estate's argument that an amended return filed under para. 164(6)(e) would nullify the misrepresentation in the original return was "without merit".  The amended return is contemplated in para. 164(6)(e) to give effect to the rules in paras. 164(6)(c) and 164(6)(d) and not to remedy a misrepresentation in an original return.  This helpfully clarifies the scope of amended returns in the loss carry-back provisions for estates.

The FCA also held that the purpose of ss. 152(4) is to preserve the CRA's right to reassess a taxpayer where the taxpayer has denied the CRA the opportunity to assess correctly all of the taxpayer's liability under the ITA in the first instance.  On the facts of Vine Estate, the FCA determined that the omission of the Victoria Park Recapture in the Estate's initial return was a misrepresentation.  In effect, the taxpayer was trying to have its cake and eat it too, by filing to take advantage of para. 164(6)(c) yet protesting when the CRA deduced from the amended filing that the Estate's original filing contained a misrepresentation.

However, in writing for the FCA, Justice Webb's obiter comments on the interplay of paras. 152(4)(a) and 164(6)(e) bear scrutiny.  First, Justice Webb applied a contextual, textual and purposive analysis to suggest that the phrase "attributable to neglect, carelessness, or wilful default" in para. 152(4)(a) may apply to the misrepresentation and not to the person filing the return.  Consequently, "a misrepresentation is 'attributable to neglect, carelessness or wilful default' regardless of whether the person filing the return or someone else was negligent, careless or wilfully in default in making the misrepresentation."  With respect, such an interpretation would not address the verb "made" in para. 152(4)(a), whose subject is restricted to either the taxpayer or the person filing the return.  It may be argued that attaching the phrase "attributable to neglect, carelessness or wilful default" to the misrepresentation only would inappropriately expand the scope of the CRA's reassessment powers beyond the limits of the two persons specified in para. 152(4)(a) as the subject of the verb "made":  the taxpayer or the person filing the return.  If there is no requirement for the taxpayer or the filer to engage in culpable conduct under ss. 154(2), the mere fact of a misrepresentation could extend the limitation period, making the test in subpara. 152(4)(a)(i) too broad.

In Vine Estate, the TCC found that the Estate did not exercise the required degree of care in reviewing the original final tax return for the deceased.  The FCA did not interfere with that finding.  Therefore, the FCA did not have to rule on whether para. 152(4)(a) applies when a misrepresentation is made and the taxpayer remains unaware of it due to an accountant's error, despite not having been negligent, careless or wilfully in default when reviewing and filing a return.  This question remains an unsettled issue for another court to decide.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions