Income Tax Severed Letters - 2021-07-07

Technical Interpretation - External

3 May 2021 External T.I. 2020-0843671E5 - Medical practitioners - cardiology technologist

Unedited CRA Tags
ITA: 118.4.

Principal Issues: Whether cardiology technologists (CTs) who practise in Ontario are authorized medical practitioners for the purposes of the medical expense tax credit.

Position: No

Reasons: There is no specific legislation that governs the practice of CTs in Ontario.

22 April 2021 External T.I. 2021-0876012E5 - Medical expenses - COVID-19 test & vaccine

Unedited CRA Tags
118.2(2)(n); 118.2(2)(o); Regulations 5701. Considered: 118.2(2)(s).

Principal Issues: 1) Whether the cost of a COVID-19 test would be an eligible expense for the purpose of the medical expense tax credit (METC), when the test is required as part of the travel restrictions to enter Canada. 2) Whether the cost of a COVID-19 vaccine that is received outside Canada would be eligible for the METC in a particular situation.

Position: 1) Likely yes, if the test is prescribed by a medical practitioner, and all the other requirements in paragraphs 118.2(2)(o) are met. 2) Likely yes, if the vaccine is prescribed by a medical practitioner, and all the other requirements in paragraph 118.2(2)(n) of the Act or section 5701 of the Regulations (as applicable) are met.

Reasons: 1) The wording in paragraph 118.2(2)(o); 2) The wording in paragraph 118.2(2)(n) of the Act and section 5701 of the Regulations.

29 March 2021 External T.I. 2020-0839571E5 - Common-law partner

Unedited CRA Tags
55(2); 55(3)(a); 248(1)
Summary Under
Tax Topics - Income Tax Act - Section 55 - Subsection 55(3.01) - Paragraph 55(3.01)(a)
a separated common-law couple can do a s. 55(3)(a) spin-off from their jointly owned Opco within the first 90 days of their separation
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Common-Law Partner
ceasing to be common-law partners after 90 days of separation did not retroactively make them unrelated for prior transactions

Principal Issues: (1) Whether paragraph 55(3)(a) applies to a divisive reorganization (“Reorganization”) undertaken and completed by common-law partners at a time when they had ceased cohabiting for less than 90 days due to a breakdown of their conjugal relationship

Position: (1) Yes

Reasons: (1)

22 February 2021 External T.I. 2020-0848221E5 - Housing companies 149(1)(n)

Unedited CRA Tags
149(1)(n); National Housing Act s.2
Summary Under
Tax Topics - Income Tax Act - Section 149 - Subsection 149(1) - Paragraph 149(1)(n)
s. 149(1)(n) corp. must construct rather than purchase its low-rental housing projects

Principal Issues: 1.Does a company that holds and manages but does not construct a low-income rental property meet the definition of a “limited-dividend housing company” in section 2 of the National Housing Act?
2.Would a company, who rents units to a registered charity which in turn rents the units to low-income families satisfy the definition of “low-rental housing project” in section 2 of the National Housing Act?
3.How does CRA verify whether a company meets the requirements of paragraph 149(1)(n) of the Act?

Position: 1. No.
2. Question of fact.
3. Various techniques.

Reasons: 1. Whether or not a company meets the definition of a “limited-dividend housing company” in section 2 of the National Housing Act is a question of fact. However, it is our view that the definition requires the company to construct as well as hold and manage the low-rental housing project.
2. The fact that the company rented units suitable for housing to a registered charity which in turn rented the units to families of low income does not appear to preclude the company from meeting the definition.
3. CRA would verify that the housing company meets the two conditions of 149(1)(n) which are that the company must be a “limited dividend housing company” as defined in section 2 of the National Housing Act and that all or substantially all of the company’s business must be from the construction, holding or management of low-rental housing projects.

Technical Interpretation - Internal

25 February 2021 Internal T.I. 2020-0854801I7 - Personal protective equipment (PPE) & face masks

Unedited CRA Tags
118.2(2)(j); 118.2(2)(m); 118.2(2)(n); ITR section 5700; ITR section 5701

Principal Issues: Whether the cost of face masks (for example, when used in the context of the COVID-19 pandemic) may qualify for the medical expense tax credit (METC).

Position: Question of fact. Face masks may qualify as eligible devices under paragraph 5700(c.1) of the Regulations if they are prescribed by a medical practitioner and they meet the requirements in that provision in terms of their use and reason for their acquisition. This being said, based on our understanding of current information about non-medical masks and their recommended use, which is mostly to protect others from the wearer, it would seem generally unlikely that a medical practitioner would prescribe such masks for use by a patient with a severe chronic respiratory or immune condition, or that the patient would use non-medical masks, “to cope with or overcome” their medical condition.

Reasons: The requirements in paragraph 118.2(2)(m) of the Act and paragraph 5700(c.1) of the Regulations.