Income Tax Severed Letters - 2017-12-27

Ruling

2016 Ruling 2016-0629011R3 - PUC reinstatement under 212.3(9)

Unedited CRA Tags
212.3, 261
exclusion where (10)(f) corp on-subscribes proceeds in FA investments
PUC restoration where borrowed money dividended up only to the level of a lower-tier CRIC, with cross-border PUC of both lower- and upper-tier CRICs computed both in Cdn$ and U.S.$ where lower-tier CRIC had U.S.$ EFC
cross-border PUC of both lower- and upper-tier CRICs computed both in Cdn$ and U.S.$ where lower-tier CRIC had U.S.$ EFC

Principal Issues: PUC reinstatement where one of the relevant corporations is a functional currency tax reporter.

Position: Ruling given based on the particular facts and subject to certain conditions.

Reasons: Application of the Act.

Technical Interpretation - External

31 October 2017 External T.I. 2017-0690691E5 F - New section 15 back to back loan rules

Unedited CRA Tags
15(2.17), 15(2.16)
application to a term deposit pledged by a family corporation to secure a business loan taken out by a shareholder
term deposit to secure shareholder loan potentially a specifed right
pledged term deposit could be specified right

Principales Questions: Whether the new back-to-back loan rules provided in subsection 15(2.17) would apply to the situation presented.

Position Adoptée: Probably yes.

Raisons: Conditions provided in subsection 15(2.16) would be met.

27 October 2017 External T.I. 2017-0688971E5 F - New Class 14.1

Unedited CRA Tags
13(38), 13(39), 13(40)
a s. 85 roll of purchased goodwill at an agreed amount of unamortized cost can trigger recapture
non-application on s. 85 roll can result in recapture -but disposition bump available to NAL transferee
permitted agreed amount for Class 14.1 property rollover must be UCC even where amortized cost (equalling boot) is higher

Principales Questions: Whether an individual can transfer, on a rollover basis, a goodwill acquired before 2017 to a corporation that will assume a debt equal to the cost of the goodwill without tax consequences.

Position Adoptée: No.

Raisons: Application of the transitional rules for the new class 14.1.