Chief Justice Gerald Rip sided with the CRA's argument in a dispute over Black's residency status because he owned homes in both Canada and the United Kingdom.
"As a resident of Canada, he is subject to tax on his worldwide income, including from employment in a third state unless the (Canada-United Kingdom Income Tax) Convention determines otherwise, which it does not," Rip wrote in his Jan. 14 ruling.
"Therefore, I determine that the Minister of National Revenue may assess tax against the applicant on the basis that he was a resident of Canada for the purposes of the Income Tax Act."
The amount of income and taxable benefits that Black may have to pay tax on is still to be decided, but could be as high as $5.1 million, according to an estimate from the Canada Revenue Agency included in court documents.
The case dealt with the interpretation of an international agreement that aims to avoid over-taxing between Canada and the U.K.
If Black was a resident of the United Kingdom in 2002 according to the convention, as his lawyers argued, that would have meant he didn't have to submit his non-Canadian income from that year with his Canadian taxes.
The statement of facts filed with the court said that Black paid Canadian taxes on $808,226 of domestic work when he was not a resident of the country.
The amount of income and benefits received by Black in 2002, however, has not yet been determined by the court.
An actual figure of what the final tax amount Black may have to pay as a result of the reassessment was not provided, as the ruling simply means the CRA is now free to recalculate. The actual amount of income and benefits that Black could have to pay taxes on as a result of the ruling is also being disputed by Black's lawyers. A lawyer for Black said he plans to appeal the decision.
Additional income and benefits that could end up being included as part of the CRA's review include taxes on an additional $2.9 million in income earned for work done outside of Canada and $1.4 million for benefits from Black's use of an airplane Hollinger International Inc. had access to.
They also include tax on $90,000 worth of security for his Toronto home and $365,500 the agency claims Black recognized from the debts of Conrad Black Capital Corp.
Black renounced his Canadian citizenship in 2001 so that he could become a British Lord. He became a resident of the United Kingdom in 1992, and remained a resident throughout 2002, court papers said.
He has been living in Toronto since 2012, when he finished serving 37 months in the U.S. for convictions on fraud and obstruction of justice. An appeal court tossed out two other fraud convictions against him and two other Hollinger executives.
Black has been steadfast in declaring his innocence on all charges and in his belief that he was subjected to unfair prosecution in the United States.
Most recently, he asked the Ontario Securities Commission to stay or at least limit the scope of regulatory proceedings against him in Canada, because he says those cover many of the questions already dealt with by the court in Chicago and through a settlement reached with the U.S. Securities and Exchange Commission. That agreement, announced in August, bars Black from acting as a director of a public company in the United States.
The OSC proceedings seek to deal with the fallout from a complicated system of non-compete payments involving Hollinger Inc. and Hollinger. Black's motion will be heard on March 26.
Black did not immediately respond to a request for comment Tuesday, and the CRA does not comment on tax cases due to confidentiality laws.
Note to readers: This is a corrected story. An earlier story incorrectly stated that Conrad Black owed $5.1 million in taxes. And a subsequent version of the story wrongly said that according to the Tax Court of Canada ruling he owed taxes on $5.1 million when, in fact, the amount is still to be determined.
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