CRA finds that the FAD rules applied where the controlling individual emigrated as part of the series involving a CRIC-to-CFA loan

One month after Canco made a $1M loan to its wholly-owned U.S. subsidiary, the individual who wholly-owned Canco ceased to be a resident of Canada as part of the same series of transactions.

CRA found that the foreign-affiliate dumping rules in s. 212.3 applied to this $1M investment since, in addition to the more routine requirements of s. 212.3(1) being satisfied, Canco became controlled by a non-resident person (the individual) as part of the same series of transactions that included the making of the investment.

Neal Armstrong. Summary of 28 August 2025 External T.I. 2022-0929921E5 under s. 212.3(1).