Joint Committee, "Technical Amendments Package of September 16, 2016", Submission letter of 15 November 2016

Summary Under
Tax Topics - Income Tax Act - Section 87 - Subsection 87(8.4)

Only extends to shares of Cancos

Ss. 87(8.4) and (8.5) in the 16 September 2016 draft legislation provide a tax deferral only for shares of...

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Summary Under
Tax Topics - Income Tax Act - Section 90 - Subsection 90(6.1)

No relief where upstream lender ceases to be an FA

The proposed continuity rules in ss. 90(6.1) and (6.11) do not provide relief from an income...

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Summary Under
Tax Topics - Income Tax Act - Section 91 - Subsection 91(4.6) - Paragraph 91(4.6)(b)

Safe harbour does not extend to upper tier hybrid partnerships

Similarly to draft s. 91(4.5), the exceptions in ss. 91(4.6)(b) and 126(4.12)(b)...

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Summary Under
Tax Topics - Income Tax Act - Section 91 - Subsection 91(1.2)

Recognition should be based on PP rather than SEP changes

The triggering event for a stub period under s. 91(1.2) should be a change in the...

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Summary Under
Tax Topics - Income Tax Act - Section 91 - Subsection 91(1.1)

Otherwise de minimis changes effectively are linked to another change not part of the series

The de minimis exception in s. 91(1.1)(b) does not...

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Summary Under
Tax Topics - Income Tax Act - Section 91 - Subsection 91(1.4)

Excluded property test not appropriate

It would be preferable for the rules in ss. 91(1.4) and (1.5) to apply by default, with taxpayers being...

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Summary Under
Tax Topics - Income Tax Act - Section 91 - Subsection 91(1.5)

Exclusion of arm’s length purchase from NR inappropriate if carve-out rule unavailable

The unavailability of s. 91(1.5) (allowing a purchaser to...

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Summary Under
Tax Topics - Income Tax Act - Section 212.3 - Subsection 212.3(2)

Expansion of s. 212.3(2)(a) to “other Canadian corporations”

S. 212.3(2)(a) is being expanded to investments other than by a CRIC in its own...

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Summary Under
Tax Topics - Income Tax Act - Section 212.3 - Subsection 212.3(7)

Penal consequences of not filing

A late-filing dividend under s. 212.3(7)(d) is not eligible for the dividend substitution election under s. 212.3(3)

Summary Under
Tax Topics - Income Tax Act - Section 212.3 - Subsection 212.3(18)

Effect on look-through rule interpretation

The addition of s. 212.3(18)(b)(viii) may imply that a broader range of transfers are not capable of...

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Summary Under
Tax Topics - Income Tax Act - Section 212.3 - Subsection 212.3(9) - Paragraph 212.3(9)(b)

Partial reinstatements

The formula in s. 212.3(9)(b)(i) can operate to under-reinstate PUC.

Summary Under
Tax Topics - Income Tax Act - Section 219.1 - Subsection 219.1(3) - Paragraph 219.1(3)(c)

Tainting effect of minor previous reinstatements

The condition in s. 219.1(3)(c) is too restrictive because any amount of previous reinstatement...

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Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Derivative Forward Agreement

The draft DFA amendment erroneously refers to an obligation that is “capital property” rather than an “obligation.”

Summary Under
Tax Topics - Income Tax Regulations - Regulation 6204 - Subsection 6204(1) - Paragraph 6204(1)(b)

Adverse implication re convertible shares

The proposed addition of Reg. 6204(1)(b)(iv) seems to imply that a convertible voting share would not be...

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