Principal Issues: Whether a loss consolidation arrangement involving a loan to buy preferred shares for the purposes of earning income would meet the CRA's requirement for acceptable loss consolidation transactions. As a result of the loan, interest income would be earned by the lossco (“Lossco”) and the profitco (“Opco”) would access losses incurred by a corporation formed specifically to acquire the preferred shares (“Aco”). At the end of XXXXXXXXXX, ACo would be wound up into Opco, thus permitting Opco to claim Aco's non-capital losses.
Submitted by narmstrong on Mon, 05/28/2018 - 01:24
use of the s.132.2 merger and a renunciation of most of the units otherwise issuable on the merger in order to eliminate a REIT corporate subsidiary held through an LP and a sub-trust
Background
Fund, which is a REIT under s. 122.1, holds notes and all the units of a unit trust (“Sub-Trust”). Sub-Trust owns the Class A LP...
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no disposition of partnership interests or property on conversion of general to limited partnership or adding right of renunciation of a MFT unitholder
renunciation by subsidiary partnership of transferee MFT of units that otherwise would be issuable on the redemption of its incestuous holding in transferor MFC
use of the s.132.2 merger and a renunciation of most of the units otherwise issuable on the merger in order to eliminate a REIT corporate subsidiary held through an LP and a sub-trust
no disposition of partnership interests or property on conversion of general to limited partnership or adding right of renunciation of a MFT unitholder
renunciation by subsidiary partnership of transferee MFT of units that otherwise would be issuable on the redemption of its incestuous holding in transferor MFC
use of the s.132.2 merger and a renunciation of most of the units otherwise issuable on the merger in order to eliminate a REIT corporate subsidiary held through an LP and a sub-trust
no disposition of partnership interests or property on conversion of general to limited partnership or adding right of renunciation of a MFT unitholder
renunciation by subsidiary partnership of transferee MFT of units that otherwise would be issuable on the redemption of its incestuous holding in transferor MFC
use of the s.132.2 merger and a renunciation of most of the units otherwise issuable on the merger in order to eliminate a REIT corporate subsidiary held through an LP and a sub-trust
no disposition of partnership interests or property on conversion of general to limited partnership or adding right of renunciation of a MFT unitholder
renunciation by subsidiary partnership of transferee MFT of units that otherwise would be issuable on the redemption of its incestuous holding in transferor MFC
Submitted by narmstrong on Mon, 05/28/2018 - 13:20
no disposition of partnership interests or property on conversion of general to limited partnership or adding right of renunciation of a MFT unitholder
The Declaration of Trust of a Canadian REIT (the “Fund”) will be amended to provide for the consolidations of its units following s. 132.2...
The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.
use of the s.132.2 merger and a renunciation of most of the units otherwise issuable on the merger in order to eliminate a REIT corporate subsidiary held through an LP and a sub-trust
renunciation by subsidiary partnership of transferee MFT of units that otherwise would be issuable on the redemption of its incestuous holding in transferor MFC
Submitted by narmstrong on Tue, 05/29/2018 - 19:56
renunciation by subsidiary partnership of transferee MFT of units that otherwise would be issuable on the redemption of its incestuous holding in transferor MFC
Background
As a result of quite a number of other transactions, a REIT (the “Fund”) holds the Class A LP Units of the Partnership (as well as...
The text of this content is paywalled except for the first five days of each month. Subscribe or log in for unrestricted access.
use of the s.132.2 merger and a renunciation of most of the units otherwise issuable on the merger in order to eliminate a REIT corporate subsidiary held through an LP and a sub-trust
no disposition of partnership interests or property on conversion of general to limited partnership or adding right of renunciation of a MFT unitholder
165
Principal Issues: 1. Will the status of the Fund as a mutual fund trust be affected by the proposed reorg; 2. Will changes to the Declaration of trust cause a resettlement of the trust; 3. Will the proposed reorg be a qualifying exchange?; 4. Will GAAR apply to the transactions?
Position: 1. No 2. No 3. Yes 4. No
Reasons: 1. 132(6) will still be met. 2. Changes not significant enough to cause a resettlement. 3. 132.2 requirements will be met. 4. In line with previous rulings - gaar does not apply
Principal Issues: Whether a loss consolidation arrangement involving a loan to buy preferred shares for the purposes of earning income would meet the CRA's requirement for acceptable loss consolidation transactions. As a result of the loan, interest income would be earned by the lossco (“Lossco”) and the profitco (“Opco”) would access losses incurred by a corporation formed specifically to acquire the preferred shares (“Aco”). At the end of XXXXXXXXXX, ACo would be wound up into Opco, thus permitting Opco to claim Aco's non-capital losses.
Swiss vested benefits policy was a “superannuation or pension fund or plan”
297
Principales Questions: Whether the income derived from a Swiss Pillar 2 vested benefits policy (the “Policy”) held by a Canadian taxpayer is included in computing his income under the Act during the accumulation period.
Position Adoptée: Likely not.
Raisons: Subject to the review of all facts and circumstances surrounding the relevant situation, we are of the view that the Policy is a superannuation or pension plan for the purpose of the Act. Therefore, the accumulated income will only be included in the Canadian taxpayer's income at the time of receipt under paragraph 56(1)a).
application of the paymaster rules to salaries paid by a partnership
242
Principal Issues: Whether a partnership, that is an employer, is a “person” for the purposes of the central paymaster rules provided by subsection 402.1(1) of the Income Tax Regulations (the “Regulations”).
Position: Yes.
Reasons: Subsection 402.1(5) of the Income Tax Regulations provides that a partnership is deemed to be a corporation for the purposes of the central paymaster rules provided by section 402.1. For the purposes of the Income Tax Act, subsection 248(1) provides that the meaning of “person” includes a corporation. Pursuant to section 16 of the Interpretation Act, this definition also applies to the Regulations. Therefore, where the employer is a partnership, the rules in Regulation 402.1 apply such that the salary or wages earned by an employee for the performing of a service in a particular province for the benefit of a corporation that is not the partnership employer are deemed to be salary or wages paid by the corporation to an employee of its permanent establishments in the province if the corporation and the partnership employer do not deal at arm’s length and the corporation has a permanent establishment in the province.
