1. Skip to navigation
  2. Skip to content
  3. Skip to sidebar

IRS: Bitcoin Not a Currency for Tax Purposes

As expected, the U.S. Internal Revenue Service has provided some guidance on the U.S. tax treatment of Bitcoin.

In Notice 2014-21 (March 25, 2014), the IRS stated that Bitcoin is property and not currency for tax purposes.  According to the Notice, “general tax principles applicable to property transactions apply to transactions using virtual currency.”  Some of the U.S. tax implications of Bitcoin include the following: (1) taxpayers receiving Bitcoins as payment for goods or services must include in their gross income the fair market value of the Bitcoins; (2) taxpayers will have a gain or loss upon the exchange of Bitcoins for other property; and (3) taxpayers who “mine” Bitcoins must include the fair market value of the Bitcoins in their gross incomes.  The IRS also confirmed in its statement that employment wages paid in Bitcoins are taxable.

This guidance from the IRS accords with the positions taken by tax authorities in other jurisdictions.

Commentators have considered the tax implications of Bitcoin in Canada both before and after the CRA released its most recent guidance in CRA Document No. 2013-0514701I7 “Bitcoins” (December 23, 2013).

The Canadian government has taken the position that Bitcoin is not legal tender. The Canada Revenue Agency has stated that, when addressing the Canadian tax treatment of Bitcoin, taxpayers must look to the rules surrounding barter transactions and must consider whether income or capital treatment arises on Bitcoin trading (i.e., speculating on the changes in the value of Bitcoins).

While Bitcoin currency exchanges encounter uncertainty (or fail entirely), and Bitcoin prices continue to fluctuate, the global tax implications of Bitcoin are becoming clearer.

, ,

IRS: Bitcoin Not a Currency for Tax Purposes

Sales of condominium units under audit by Canada Revenue Agency

A Canada Revenue Agency (“CRA”) audit initiative is targeting taxpayers who have recently sold condominium units they did not occupy or occupied for only a short period of time (the “CRA Condo Project”).

The CRA is reassessing some of these dispositions on the basis that the condo was sold in the course of business, treating the profit as income (instead of capital gains) and, in some cases, assessing gross negligence penalties under subsection 163(2) of the Income Tax Act. In doing so, the CRA may be incorrectly reassessing some taxpayers whose gains are legitimate capital gains and that may be subject to the principal residence exemption (click here for a discussion of the principal residence exemption).

Consider this example. A taxpayer signs a pre-construction purchase agreement for a condo in 2007.  In 2009, the unit was completed and occupied by the taxpayer, before the entire development was finished and registered in land titles.  Land titles registration occurs in 2010, but shortly thereafter the taxpayer sells the condo for a profit.  Ordinarily, one would conclude the condo was held on account of capital and the gain would be at least partially exempt from tax on the basis that condo was the taxpayer’s principal residence.  The CRA may be inclined to reassess on the basis that land title records show the taxpayer on title for only a short time, as though the taxpayer had intended to merely “flip” the condo rather than reside in it.

This assessing position may be incorrect because the buyer of a condo does not appear on title until the entire condominium development is registered.  In fact, several years can pass from the date of signing the purchase agreement to occupancy to land titles registration – and, accordingly, the taxpayer’s actual length of ownership will not be apparent from the land title records.

This type of situation could cause serious problems for some taxpayers. If a taxpayer is audited and subject to reassessment on the basis that their entire gain should be taxed as income, the taxpayer will need to gather evidence and formulate arguments in time to respond to an audit proposal letter within 30 days, or file a Notice of Objection within 90 days of the date of a reassessment.

Taxpayers could respond to such a reassessment by providing evidence that they acquired the condo with the intent that it would be their residence, and that the subsequent sale was due to a change in life circumstances.  Taxpayers may wish to gather the following evidence to support such claims:

  • Purchase and sales agreements;
  • Letter or certificates granting permission to occupy the condo;
  • Proof of occupancy, such as utility bills, bank statements, CRA notices, identification (such as a driver’s license) showing the condo as a residence; or
  • Evidence of a change in life circumstances which caused the condo to no longer be a suitable residence, including:
    • Marriage or birth certificates;
    • A change of employer or enrollment in education that required relocation; or
    • Evidence showing the taxpayer cared for a sick or infirm relative, or had a disability that precluded using a condo as a residence.

Taxpayers should be prepared to provide reasonable explanations for any gaps in the evidence.  If a taxpayer wishes to explore how best to respond in the circumstances, they should consult with an experienced tax practitioner.

, , , , ,

Sales of condominium units under audit by Canada Revenue Agency

Federal Court of Appeal dismisses taxpayer’s appeal in Morguard: Trial judge made no error in concluding that a “break fee” was income

The Federal Court of Appeal has dismissed the taxpayer’s appeal in Morguard Corporation v The Queen.

(See our previous posts on the case here, here and here.)

Justice Sharlow wrote for the panel which also included Justice Evans and Justice Stratas.  She agreed with the reasoning of the trial judge that Ikea Ltd. v. Canada is indeed the leading case on the characterization of extraordinary or unusual receipts in the business context, and found that his application of the principles stated by the Supreme Court of Canada in Ikea was correct. The court noted that Ikea was not based on a particular factual finding, but “involved consideration of a number of factors, including the commercial purpose of the payment and its relationship to the business operations of the recipient.”

The Court of Appeal found that the trial judge made no error in concluding, on the facts of the case, that the break fee received by Morguard as the result of a failed takeover bid was income and not capital. The appeal was dismissed with costs.

,

Federal Court of Appeal dismisses taxpayer’s appeal in Morguard: Trial judge made no error in concluding that a “break fee” was income

Federal Court of Appeal hears argument on whether “break fees” are income (Morguard)

Is a “break fee” received in return for withdrawing from a takeover bid a capital receipt or an income receipt?

That was the issue before a panel of the Federal Court of Appeal (“FCA”) on November 20, 2012 in Morguard Corporation v. The Queen on appeal from a decision of the Tax Court of Canada. The panel consisted of Justice Evans, Justice Sharlow and Justice Stratas. At the conclusion of the hearing, judgment was reserved.

For the facts of the case and our analysis of the trial decision, see here. For a brief review of the issues raised in the factum filed by each party in the FCA, see here.

Arguments of the Taxpayer

Counsel for the appellant argued the trial judge had made an “error of law” in determining that Acktion Corporation (“Acktion”) was “essentially in the business of doing acquisitions and takeovers” (Acktion was the name under which Morguard Corporation (“Morguard”) operated during the period at issue). Counsel argued that Acktion was a holding company and that it had sought the takeover to increase its capital holdings. The standard of review for an error of law is “correctness”.

The panel asked counsel whether there was any error of law. Justice Stratas asked whether the issue was really a factual one, for which the standard of review is much higher, namely, “palpable and overriding error”.

Counsel argued that it is settled law that a corporation cannot conduct a “business” of acquiring capital assets. Accordingly, counsel argued that the trial judge erred in concluding that Acktion had done so. In support of this proposition, counsel cited the 1978 FCA decision in Neonex International Ltd. v The Queen (78 DTC 6339). 

It was not clear whether the panel agreed with counsel on this point, as their other questions focused on whether the Supreme Court of Canada (“SCC”) decision in Ikea Ltd. v. Canada ([1998] 1 SCR 196) had displaced Neonex by instituting a “modern approach” that supports an organic assessment of the circumstances around the receipt.

Counsel argued the break fee was received in the pursuit of a capital acquisition and that, according to the modern approach, it should be characterised as a capital receipt. Counsel stressed that the expert evidence adduced at trial by both parties was that break fees are intended to support the acquisition of capital by deterring other bidders or to compensate for the various costs incurred in a failed takeover bid.

The panel sought clarification of the appellant’s position that there should be no tax liability arising from the receipt of the break fee. In its written submissions, the appellant argued that the break fee should not be taxed as a capital gain because there were no proceeds of disposition. Justice Sharlow noted that, according to this theory, the break fee could only be characterized either as income or a non-taxable capital gain.

Arguments of the Crown

Counsel for the Crown had to answer fewer questions from the panel. Counsel argued that the characterization of an “unusual receipt” such as a break fee requires a factual determination (relying on the SCC’s decision in Ikea on this point), which the Tax Court had made in this case.

Justice Evans asked about the distinction between conducting a real estate business that acquires companies as capital and being a real estate company in the business of acquisitions and takeovers. Counsel argued that, instead of acquiring real estate directly, Acktion’s business strategy was to acquire businesses that already owned real estate. Counsel further submitted that the corporate information distributed to its shareholders described the corporation as a real estate company and not as a holding company.

Justice Sharlow questioned the Crown’s reliance on the commercial description of Acktion’s business, noting that the technical distinction between income and capital is a legal distinction that would not generally be expected to appear in a commercial context. In response, counsel argued that Acktion treated the takeover bid as part of its regular business. After losing its takeover bid, Acktion negotiated a higher price for its remaining “toehold” in the company, then took the break fee and the proceeds of disposition of its shares and immediately sought to purchase another business. Counsel argued this course of conduct shows that Acktion considered the negotiation of break fees to be part of its real estate business.

In response to the appellant’s position that the break fee was a non-taxable capital gain, counsel submitted that the trial judge was correct in applying the factors set out by the FCA in Canada v. Cranswick ([1982] CTC 69) to determine whether a payment was a windfall. In this respect, the break fee was the product of an enforceable claim negotiated by the Appellant according to common practices in takeover bids and, thus, could not be characterised as a windfall.

*  *  *

The panel reserved judgment. We will report on the judgment when it is released.

, , , , ,

Federal Court of Appeal hears argument on whether “break fees” are income (Morguard)

Federal Court of Appeal to hear argument tomorrow in “break fee” case (Morguard)

Tomorrow morning (November 20, 2012), the Federal Court of Appeal is scheduled to hear an appeal by Morguard Corporation (“Morguard”, formerly operating as Acktion Corporation), regarding the taxation of a “break fee” received as a result of a failed takeover bid.

Break fees are an agreed-upon fee to be paid by or on behalf of a target corporation to a prospective purchaser on the rejection of that prospective purchaser’s bid and the acceptance of another offer. Break fees are intended to reflect, more or less, the monetary and non-monetary costs incurred by the prospective purchaser in making a bid, and are common in sophisticated takeover transactions.

The Morguard case concerns a $7.7 million break fee received by Morguard on withdrawal from a bidding war. In its return, Morguard treated the payment as a capital gain but was reassessed by the Minister of National Revenue on the basis that the amount was an income receipt. On appeal to the Tax Court of Canada, the trial judge agreed with the Minister’s position that, on the facts of the case, the break fee represented income and should be taxed accordingly. For our analysis of the Tax Court decision, see our earlier blog post.

The taxpayer has appealed the trial judge’s decision to the Federal Court of Appeal on the basis that the lower court erred in law and in fact. The Appellant has described the issues raised in the appeal as follows:

(a) Whether the trial judge erred in law by concluding that the taxpayer received the break fee on income account rather than capital account.

(b) If received on capital account, whether the break fee was received in circumstances that gave rise to a capital gain.

(c) Whether the trial judge made palpable and overriding errors in finding that the taxpayer was in the business of doing acquisitions and takeovers, and received the break fee in the ordinary course of its business similar to the receipt of dividends, rents, or management fees.

(d) Whether the trial judge made a palpable and overriding error in finding that the break fee was not linked to a capital purpose of the taxpayer.

(e) Whether the trial judge erred in law in his interpretation and application of the Supreme Court of Canada decision in Ikea Ltd. v. Canada [1998] 1 S.C.R. 196.

(f) Whether the trial judge erred in law by applying the legal test developed by the Federal Court of Appeal in The Queen v. Cranswick (82 DTC 6073) to break fees.

The Crown, on the other hand, has framed the issues as follows:

(a) Whether the trial judge committed a palpable and overriding error in finding that the negotiation and receipt of the break fee by the appellant was part of the ordinary course of its regular real estate business.

(b) Whether the trial judge was correct in concluding that the break fee should be included in the computation of the appellant’s income because it was received in the ordinary course of its business.

(c) Whether the trial judge correctly applied the jurisprudence to conclude that the break fee was not a windfall.

The Appellant’s factum is here. The Crown’s factum is here.

We intend to report again after the hearing in the Federal Court of Appeal.

, , ,

Federal Court of Appeal to hear argument tomorrow in “break fee” case (Morguard)

Supreme Court of Canada declines to hear an appeal on whether an expenditure in the course of a corporate reorganization was on capital or income account

Earlier today, the Supreme Court of Canada (The Chief Justice, Justice Rothstein and Justice Moldaver) dismissed an application for leave to appeal by Imperial Tobacco dealing with the classic distinction between deductible corporate expenditures on income account and non-deductible corporate expenditures on capital account. 

In brief, the taxpayer made a payment to extinguish an employee stock option plan (suggesting that the payment was made on income account) but made the payment during the course of a corporate reorganization (suggesting that the payment was made on capital account). 

The taxpayer’s argument for deductibility was supported by the Tax Court decision in Shoppers Drug Mart Limited v. The Queen (dealing with the very same transaction) while the Crown’s argument for non-deductibility was supported by the earlier Federal Court of Appeal decision in Kaiser Petroleum Ltd. v. The Queen.  

Both the Tax Court of Canada and Federal Court of Appeal followed the reasoning of the Federal Court of Appeal in Kaiser and sided with the Crown, holding that the payment was on capital account.  The decision of the Federal Court of Appeal is now final and binding.

For a brief description of the reasoning of the Federal Court of Appeal, see our earlier blog post.

, , , , ,

Supreme Court of Canada declines to hear an appeal on whether an expenditure in the course of a corporate reorganization was on capital or income account

Morguard Corporation v. The Queen – When will a “break fee” be considered income?

In Morguard Corporation v. The Queen, 2012 TCC 55, Justice Boyle of the Tax Court of Canada considered whether a “break fee” received by a predecessor of the Appellant (for the purposes of this discussion, the “Appellant”) in respect of its unsuccessful attempted acquisition of a public corporation, was received on account of income or capital (there was also a procedural issue that will not be discussed in this post).  Based on the approach set out in Ikea Ltd. v. Canada, [1988] 1 SCR 196, 98 DTC 6092, affirming 96 DTC 6526 (FCA) and 94 DTC 1112 (TCC), Justice Boyle concluded that, on the facts, a break fee such as the one received by the Appellant was taxable on account of income because the negotiation and inclusion of break fees in the Appellant’s acquisition agreements was an integral part of its commercial business operations and activities. 

The relevant facts in this case are quite simple. In early 1997, the Appellant commenced implementation of its business strategy of assembling direct or indirect ownership of, or controlling positions in, real estate companies.  As a result of this business strategy, the Appellant acquired large/controlling interests in a number of real estate companies. 

In 1998, the Appellant acquired 19.2% of Acanthus Real Estate Corporation (“Acanthus”).  In June 2000, the Appellant made a hostile take-over bid for all of the remaining shares in Acanthus at a purchase price of $8.00, thereby increasing its position to 19.9%.  Following negotiations between Acanthus and the Appellant, the parties entered into a pre-acquisition agreement in order to give support and deal protection to the Appellant and the bid.  Pursuant to this pre-acquisition agreement, it was agreed that the Appellant would acquire all the outstanding shares of Acanthus at a purchase price of $8.25 per share and that Acanthus would, inter alia, pay a break fee of $4.7 million to the Appellant if a better bid was received and accepted by Acanthus.

On June 29, 2000, Acanthus received an unsolicited bid from a third-party (the “Third-Party”) for all of the outstanding shares of Acanthus at a purchase price of $8.75.  Attempting to thwart the Third-Party bid, the Appellant increased its bid to $9.00 per share on July 2, 2000.  At that time, the Appellant and Acanthus entered into an amending agreement (the “Amending Agreement”) to the original pre-acquisition agreement, pursuant to which a superior offer from a third-party would need to be for at least $9.30 per share and the break fee was increased to $7.7 million. 

Ultimately, Acanthus accepted an offer from the Third-Party for $9.40 and the Appellant chose not to match the offer.  Consequently, the Amending Agreement was terminated and Acanthus paid the Appellant the $7.7 million break fee.  In addition to the $7.7 million break fee (the “Break Fee”), the Appellant realised a gain of $4.8 million on the sale of its shares of Acanthus.

The Appellant argued that the Break Fee was a capital receipt and therefore should not be taxable because it was not received in respect of a disposition of property (i.e. no property was actually disposed of).  Critical to the Appellant’s argument was, the fact that (a) the Break Fee was received in relation to the acquisition of shares of Acanthus, which was a capital investment, and (b) the receipt of the Break Fee was the only time the Appellant had ever received a break fee in attempting to implement its real estate company acquisition strategy. 

After dismissing the Appellant’s “windfall” argument, Justice Boyle noted that Ikea is the leading modern case on the characterization of extraordinary or unusual receipts in the business context.  In that case, the taxpayer sought to assemble long-term leaseholds from which to operate its business.  In doing so, the taxpayer received a “tenant inducement payment” which it treated on capital account because the payment was received in respect of a long-term lease, which is capital in nature.  All levels of court found that the receipt was on income account because the leaseholds were necessary to the business of the taxpayer and they were a necessary incident to the conduct of the taxpayer’s business.  Consequently, the capital purpose (assembling long-term leaseholds) was not the relevant link to be considered. 

Citing the reasons for Judgment in the Tax Court of Canada in Ikea, Justice Boyle noted, at paragraph 43, that Justice Bowman was correct in finding “that the payment was clearly received and inextricably linked to [the taxpayer’s] ordinary business operations, and further that no question of linkage to a capital purpose could even be seriously entertained.”  In this case, Justice Boyle found that break fees were expected incidents of the Appellant’s business strategy of entering into acquisition agreements with real estate corporations, regardless of how unusual the receipt of such a payment may be and, therefore, the Break Fee was an amount received in the course of the Appellant’s business and commercial activities.  Consequently, the receipt of the Break Fee by the Appellant was on account of income.

, ,

Morguard Corporation v. The Queen – When will a “break fee” be considered income?

Federal Court of Appeal Affirms Tax Court Decision that Payment to Extinguish Employee Stock Option Plan is Capital Expenditure: Imperial Tobacco Canada Limited v. The Queen

On November 10, 2011, the Federal Court of Appeal (the “FCA”) delivered a unanimous decision in Imperial Tobacco Canada Limited v. The Queen, 2011 FCA 308. As discussed in an earlier post, the panel of Justice Marc Nadon, Justice Karen Sharlow and Justice Eleanor Dawson were asked to determine whether a one-time, lump sum payment of approximately $118 million made to employees to extinguish an employee stock option plan was a deductible expense or a payment on account of capital which is precluded from deduction by paragraph 18(1)(b) of the Income Tax Act (the “Act”).

The FCA dismissed the appeal of Imperial Tobacco Canada Limited (“Imasco”) and upheld Justice Bowie’s decision in favour of the Crown in Imperial Tobacco Canada Limited v. The Queen, 2010 TCC 648 noting that the decision of the Tax Court of Canada (the “Tax Court”) was “consistent with the evidence and the applicable legal principles.”         

Justice Sharlow found, notwithstanding the decision by Chief Justice Bowman of the Tax Court that a similar payment made in the course of the same series of transactions was fully deductible (Shoppers Drug Mart Limited v. The Queen), three factors that pointed to the conclusion that the payment was made on account of capital:

(i) the payment coincided with a reorganization of the capital of Imasco (the going private transaction and amalgamation);

(ii) the arrangements put in place for making the payment facilitated and were intended to facilitate the capital reorganization; and

(iii) the payment was intended to and did end all future obligations of Imasco to deal with its own shares, which can be described as a once and for all payment that resulted in a benefit of an enduring nature.

Justice Sharlow did acknowledge that there were two factors in favour of Imasco, namely, that (a) the employee stock option plan was entered into to provide a form of employee compensation and did make periodic cash payments for the surrender of options, and (b) the payment for the optioned shares represented only a small portion of the outstanding shares of Imasco (just over 1%).

In the end, the FCA followed its 1990 decision in Kaiser Petroleum Ltd. v. The Queen. Justice Sharlow agreed with Justice Bowie that the distinctions between the circumstances of Imasco and the facts in Kaiser were “distinctions without a difference”. Furthermore, the FCA rejected Imasco’s argument that Kaiser is not in step with current economic realities on the basis that it was decided at a time when employee stock option plans were not commonly used as part of the ordinary compensation package for employees of all levels.

In light of the significant difference in approach to the issue on substantially the same facts between the Federal Court of Appeal and Chief Justice Bowman in Shoppers, it would not be surprising if a leave application is filed with the Supreme Court of Canada.  As Justice Ian Binnie, formerly of the Supreme Court of Canada, noted in a recent interview, the function of counsel applying for leave is to kick the ball up in the air in an interesting way and the judges will grab it.”  That may very well be easier here than in many other tax disputes.

, , , , , , , ,

Federal Court of Appeal Affirms Tax Court Decision that Payment to Extinguish Employee Stock Option Plan is Capital Expenditure: Imperial Tobacco Canada Limited v. The Queen

Capital Expenditure or Expenditure on Revenue Account? Judgment Reserved by FCA in Imperial Tobacco Canada Limited v. The Queen

As discussed in an earlier post, the Federal Court of Appeal (the “FCA”) heard submissions in Imperial Tobacco Canada Limited v. The Queen on October 26th, 2011. Justice Marc Nadon, Justice Karen Sharlow and Justice Eleanor Dawson heard the taxpayer’s appeal in Toronto.

The panel will determine whether a one-time, lump sum payment of approximately $118 million made to employees to extinguish an employee stock option plan was a deductible expense (as the taxpayer contends) or an outlay on account of capital which is precluded from deduction by paragraph 18(1)(b) of the Income Tax Act (as the Crown contends).

Imperial Canada Tobacco Limited (the “Appellant”) argued that the most important question that needed to be considered by the panel (and one that was not considered by the Tax Court of Canada) was whether there was an enduring benefit to the taxpayer. During argument, the panel was quite interested in why the Appellant agreed to facilitate the immediate vesting and exercise or surrender of all of the options to bring the stock option plan to an end. The Appellant maintained that “settling up” the stock option plan was a housekeeping matter that allowed it to satisfy its obligations before the completion of a going private transaction.

In addition to the 2007 decision of Chief Justice Donald Bowman in Shoppers Drug Mart Limited v. The Queen (“Shoppers”), the Appellant relied on three other cases (Boulangerie St-Augustin v. The Queen, International Colin Energy v. The Queen and BJ Services Company Canada v. The Queen) which permitted the deduction of expenditures incurred in the context of other corporate transactions.

The Crown argued that the cash payment to eliminate the stock option plan was a condition of the transaction and was not made in the ordinary course of the Appellant’s business. It was an extraordinary expense meant to facilitate the take-over transaction. The Crown also emphasized that the enduring benefit test should not be determinative. In this regard, the Crown relied on M.N.R. v. Algoma Central Railways, Johns-Manville Canada Inc. v. The Queen and Gifford v. The Queen.

The judgment will be eagerly anticipated as it remains to be seen whether the panel will follow the 1990 decision of the FCA in Kaiser Petroleum Ltd. v. The Queen, where it determined that a payment made to extinguish an employee stock option plan in the course of implementing a take-over transaction was a capital expenditure, or whether it will find persuasive the more recent decision of Chief Justice Donald Bowman of the Tax Court of Canada in Shoppers. In Shoppers, Chief Justice Bowman began with the proposition that “in the ordinary course a payment made by an employer to an employee for the surrender of his or her option under a stock option plan to acquire shares of the company is a deductible expense” and found that that did not change even in the context of a going private transaction.

, , , , , ,

Capital Expenditure or Expenditure on Revenue Account? Judgment Reserved by FCA in Imperial Tobacco Canada Limited v. The Queen

Capital Expenditure or Expenditure on Revenue Account? Imperial Tobacco Canada Limited v. The Queen

On October 26, 2011, the Federal Court of Appeal is scheduled to hear an appeal by Imperial Tobacco Canada Ltd. against a decision of the Tax Court of Canada denying the deduction of $118,575,528 as employee compensation paid to satisfy its obligations under an employee stock option plan.

In assessing, the Minister of National Revenue took the position that the amounts are not deductible.  He argued, and the Tax Court of Canada agreed, that they were not amounts paid as employee compensation at all, but were amounts laid out by Imperial Tobacco in the course of the corporate reorganization to rid itself of an employee stock option plan, the deduction of which is precluded by paragraph 18(1)(b) of the Income Tax Act.

In a 2007 decision, Shoppers Drug Mart Limited v. The Queen, the Tax Court of Canada reached a different conclusion in the context of the same transaction.

For the appellant’s notice of appeal, see the Notice of Appeal of Imperial Tobacco Canada Limited.

For the written submissions of the appellant, see the Memorandum of Fact and Law of Imperial Tobacco Canada Ltd.

For the written submissions of the responsdent, see the Memorandum of Fact and Law of the Crown.

, , , , ,

Capital Expenditure or Expenditure on Revenue Account? Imperial Tobacco Canada Limited v. The Queen