Canada's Federal Court of Appeal (the FCA) rendered its decision in Iggillis Holdings Inc. v. The Queen (2018 FCA 51) on March 6, reversing the Federal Court (the FC) decision (2016 FC 1352). The issue in this case relates to solicitor-client privilege. The Minister of National Revenue (the Minister) required that Iggillis Holdings Inc. and Ian Gillis (the Taxpayers) provide the legal memorandum explaining the tax consequences of the series of transactions in an arm's-length sale by the Taxpayers to a third party. The memorandum was on the letterhead of purchaser's counsel and was prepared predominantly by that counsel, although counsel for the Taxpayers also provided some input into the memo, which was then shared by the lawyers of each party to the transaction with their respective client. The FC concluded that the memorandum had to be provided to the Minister and that common interest privilege (CIP) did not protect the memorandum. The FCA overturned the FC decision and concluded that the memorandum was protected from disclosure to the Minister by solicitor-client privilege, acknowledging CIP in a transactional context.

A Global Tax Alert, attached below, provides additional details.

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