Tag: Capital Gain  

A gain on the sale of capital asset.

Tanzania vs JSC ATOMREDMETZOLOTO (ARMZ), June 2020, Court of Appeal, Appeals No 78-79-2018

Tanzania vs JSC ATOMREDMETZOLOTO (ARMZ), June 2020, Court of Appeal, Appeals No 78-79-2018

JSC Atomredmetzolo (ARMZ) is a chartered open Joint Stock Company incorporated in the Russian Federation dealing in uranium mining industry. Late 2010, the Company purchased from the Australia Stock Exchange all shares in Mantra Resources Limited (Mantra Resources) a company incorporated in Australia and owner of Mkuju River Uranium project located Tanzania. Following the acquisition of all the issued shares in Mantra Australia, JSC Atomredmetzolo became a sole registered and beneficiary owner of shares in Mantra Australia making Mantra Australia a wholly owned subsidiary of JSC Atomredmetzolo. Hence Mantra Tanzania and Mkuju River Uranium Project were placed under the control of JSC Atomredmetzolo who had a majority 51.4% shareholding in a Canadian Uranium exploration and mining company named Uranium One Inc. Thus, JSC Atomredmetzolo opted to invest in the Mkuju River Uranium project through Uranium One based in Canada. Subsequently, JSC Atomredmetzolo entered into a put/call option agreement with Uranium One, pursuant to which JSC Atomredmetzolo sold and transferred the ... Read more
Canada vs Shell Canada Ltd., December 1998, Federal Court of Appeal, Case No [1999] 3 S.C.R. 616

Canada vs Shell Canada Ltd., December 1998, Federal Court of Appeal, Case No [1999] 3 S.C.R. 616

This case concerns the tax treatment of a sophisticated financing transaction, known as a “weak currency financing scheme”, undertaken by Shell Canada. In 1988, Shell Canada required about $100 million in United States currency (“US$”) for general corporate purposes. The market rate for a direct borrowing of US$ was 9.1 percent. Instead of borrowing US$ directly, however, Shell Canada entered into two agreements. The first agreement (the “Borrowing Contract”), involved the appellant borrowing $150 million in New Zealand currency (“NZ$”) at an interest rate of 15.4 percent per annum (which was found to be the market rate for borrowing NZ$). The second agreement (the “Purchasing Contract”), involved the appellant using the New Zealand funds to purchase US$100 million at the market price. In order to fulfill Shell Canada’s requirement for New Zealand dollars, the Purchasing Contract provided for the appellant to purchase enough New Zealand dollars to satisfy the interest payments under the Borrowing Contract and for the appellant to ... Read more