Income Tax Severed Letters - 2018-08-15

Ruling

2018 Ruling 2017-0683941R3 - Split-up transactions
Unedited CRA Tags: 
Subsection 55(2), paragraph 55(3)(a)
Full Title: 
2018 Ruling 2017-0683941R3 - Split-up transactions

2018 Ruling 2017-0683941R3 - Split-up transactions -- attach -- Subparagraph 55(3)(a)(ii)

Submitted by narmstrong on Tue, 09/04/2018 - 03:13
split-up to resolve business differences between daughter and mother, with relevant significant investment of arm's length investor in further transferee company

Structure

Amalco (which resulted from a recent amalgamation of Holdco 1 and its subsidiary, Opco) carries on Business 1 in Facility 1 and...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(10) arm's length investment in proposed purchaser of spinco assets not part of spin-off series 229
Tax Topics - Income Tax Act - Section 186 - Subsection 186(1) - Paragraph 186(1)(b) year-end established in middle of cross-redemptions to avoid circularity 220
Full Title: 
2018 Ruling 2017-0683941R3 - Split-up transactions

2018 Ruling 2017-0683941R3 - Split-up transactions -- attach -- Subsection 248(10)

Submitted by narmstrong on Wed, 09/05/2018 - 03:04
arm's length investment in proposed purchaser of spinco assets not part of spin-off series

Mother along with an arm’s length business associate (“Investor”) wanted to use some of the assets of the family business corporation...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 55 - Subsection 55(3) - Paragraph 55(3)(a) - Subparagraph 55(3)(a)(ii) split-up to resolve business differences between daughter and mother, with relevant significant investment of arm's length investor in further transferee company 758
Tax Topics - Income Tax Act - Section 186 - Subsection 186(1) - Paragraph 186(1)(b) year-end established in middle of cross-redemptions to avoid circularity 220
Full Title: 
2018 Ruling 2017-0683941R3 - Split-up transactions

2018 Ruling 2017-0683941R3 - Split-up transactions -- attach -- Paragraph 186(1)(b)

Submitted by narmstrong on Wed, 09/05/2018 - 12:23
year-end established in middle of cross-redemptions to avoid circularity

Mother along with an arm’s length business associate (“Investor”) wanted to use some of the assets of the family business corporation...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 55 - Subsection 55(3) - Paragraph 55(3)(a) - Subparagraph 55(3)(a)(ii) split-up to resolve business differences between daughter and mother, with relevant significant investment of arm's length investor in further transferee company 758
Tax Topics - Income Tax Act - Section 248 - Subsection 248(10) arm's length investment in proposed purchaser of spinco assets not part of spin-off series 229

Principal Issues: Whether the proposed split-up transactions meet legislative and administrative requirements?

Position: Transactions meet requirements.

Reasons: Consistent with law and administrative requirements.

Technical Interpretation - External

17 July 2018 External T.I. 2018-0753051E5 - Treatment of losses and investment income
Unedited CRA Tags: 
9, 12(1)(i), 20(1)(p), 38(c), 39(1)(b), 39(1)(c), 40(2)(g)(ii), 50(1), 111(1)(a), 111(1)(b), 54 capital property, 111(8) non-capital loss, 125(7) Canadian-controlled private corporation.

Principal Issues: Tax implications of losses incurred as a result of a fraudulent investment scheme.

Position: Various implications discussed.

Reasons: See below.

25 May 2018 External T.I. 2018-0761601E5 - Correspondence with XXXXXXXXXX re Tax on Split Income
Unedited CRA Tags: 
Proposed Amendments to Section 120.4
Full Title: 
25 May 2018 External T.I. 2018-0761601E5 - Correspondence with XXXXXXXXXX re Tax on Split Income

25 May 2018 External T.I. 2018-0761601E5 - Correspondence with XXXXXXXXXX re Tax on Split Income -- attach -- Paragraph (b)

Submitted by narmstrong on Thu, 08/16/2018 - 01:30
no excluded share exception where interposition of family trust or holdco

In confirming that the excluded share exception is available where dividends are paid to a spouse through a holding company (of which the spouse...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(ii) where spouse works in only one of two businesses, excluded amount determination requires “separate accounting for each business and a tracing of funds” 167
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(a) keeping time logs will “ensure that businesses are able to comply with the new rules” 189
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (a) - Subparagraph (a)(i) shares of pizzeria but not hair salon were excluded 242
Full Title: 
25 May 2018 External T.I. 2018-0761601E5 - Correspondence with XXXXXXXXXX re Tax on Split Income

25 May 2018 External T.I. 2018-0761601E5 - Correspondence with XXXXXXXXXX re Tax on Split Income -- attach -- Subparagraph (e)(ii)

Submitted by narmstrong on Thu, 08/16/2018 - 01:34
where spouse works in only one of two businesses, excluded amount determination requires “separate accounting for each business and a tracing of funds”

The spouse (Spouse B) of the shareholder of a corporation with a construction and property management business works 25 hours in the property...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (b) no excluded share exception where interposition of family trust or holdco 138
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(a) keeping time logs will “ensure that businesses are able to comply with the new rules” 189
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (a) - Subparagraph (a)(i) shares of pizzeria but not hair salon were excluded 242
Full Title: 
25 May 2018 External T.I. 2018-0761601E5 - Correspondence with XXXXXXXXXX re Tax on Split Income

25 May 2018 External T.I. 2018-0761601E5 - Correspondence with XXXXXXXXXX re Tax on Split Income -- attach -- Paragraph 120.4(1.1)(a)

Submitted by narmstrong on Thu, 08/16/2018 - 01:52
keeping time logs will “ensure that businesses are able to comply with the new rules”

How must a business owner show that a spouse or child worked at least 20 hours in the business in the past five years if no formal records were...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (b) no excluded share exception where interposition of family trust or holdco 138
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(ii) where spouse works in only one of two businesses, excluded amount determination requires “separate accounting for each business and a tracing of funds” 167
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (a) - Subparagraph (a)(i) shares of pizzeria but not hair salon were excluded 242
Full Title: 
25 May 2018 External T.I. 2018-0761601E5 - Correspondence with XXXXXXXXXX re Tax on Split Income

25 May 2018 External T.I. 2018-0761601E5 - Correspondence with XXXXXXXXXX re Tax on Split Income -- attach -- Subparagraph (a)(i)

Submitted by narmstrong on Thu, 08/16/2018 - 02:34
shares of pizzeria but not hair salon were excluded

A corporation owned 50-50 by two spouses (Family 1) operates a hair salon which derives more than 90% of its income from the provision of...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (b) no excluded share exception where interposition of family trust or holdco 138
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(ii) where spouse works in only one of two businesses, excluded amount determination requires “separate accounting for each business and a tracing of funds” 167
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1.1) - Paragraph 120.4(1.1)(a) keeping time logs will “ensure that businesses are able to comply with the new rules” 189

Principal Issues: How the proposed changes to the tax on split income under section 120.4 apply in certain circumstances.

Position: General comments provided on certain issues related to the definition of excluded shares and excluded business.

Reasons: Wording of proposed legislation.