CRA maintains its broad interpretation of the residual conferral-of-benefit provision (s. 246(1))

CRA has indicated that where a subsidiary (a US limited liability company) confers a benefit on the individual Canadian shareholder of its parent corporation (an Alberta unlimited liability company) by paying the US income tax liability of that individual arising as  a result of both corporations being fiscally transparent for US purposes, the benefit is includable in the individual's income under s. 246(1).  (This is similar to an earlier interpretation: 10 January 2011 Memorandum 2009-034425.) 

The judicial authority cited by CRA (Pub Création) might support this approach only if the parent corporation (the Alberta ULC) had approved the conferral of this benefit, and there is no indication in the statement of facts that this was the case.  CRA, in effect, may presume such approval.  If the transaction occurred after the effective date of draft s. 15(1.4) (October 31, 2011), the benefit also would be included in the income of the Alberta ULC, thereby resulting in double taxation (even if s. 56(2) did not apply).

Neal Armstrong.  Summary of 16 April 2012 T.I. 2011-041149 under s. 246(1) and s. 248(1) - dividend.