CRA accepts MSH, so that unclaimed divided refunds do not generate s. 186(1)(b) tax to the dividend recipient

CRA accepts MSH (which in turn, was effectively approved in the Federal Court of Appeal in 1057513 Ontario Inc.) and has reversed 2012-0436181E5, in now considering that a dividend refund which is not claimed on a timely basis does not reduce the refundable dividend tax on hand of the payor corporation. Among other things, this means that the dividend recipient will not be subject to Part IV tax under s. 186(1)(b) (based on the dividend refund calculated for the payor) if the dividend refund is not received by the dividend payor.

Neal Armstrong. Q.8 of 9 October 2015 APFF Roundtable.