Having an individual hold a CFA earning FAPI through a Canco produces a modest reduction in the overall level of tax on the income distributed up to the individual

Where an Ontario individual has a 100% interest in a controlled foreign affiliate earning property income (i.e., foreign accrual property income) at a high foreign rate of tax, there will be a modest reduction in the overall rate of tax on income distributed up to him if he holds the CRA through a Canco rather than directly – and a significant deferral if funds received from the CFA by the Canco are reinvested rather than distributed to him.

Neal Armstrong. Summary of Jonah Bidner, "An Individual's Direct Ownership of a CFA," Canadian Tax Focus, Vol. 6, No. 4, November 2016, p. 12 under s. 91(1).