CRA publishes the final version of its 2018 CTF Roundtable answers

Although most of these responses were commented on by us in late November after they were presented orally in more abbreviated form at the annual CTF Conference, for convenience of reference the Table below provides the descriptors and links for the final versions of the answers that were published last week.

Topic Descriptor
27 November 2018 CTF Roundtable Q. 1, 2018-0780061C6 - Allocation of safe income Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) rulings on safe income allocation to discretionary dividend shares
27 November 2018 CTF Roundtable Q. 2, 2018-0780071C6 - Impact of 55(2) deeming rules Income Tax Act - Section 112 - Subsection 112(3) - Paragraph 112(3)(b) - Subparagraph 112(3)(b)(i) stop-loss rule does not apply to the extent of the application of s. 55(2)
Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (a) - Subparagraph (a)(i) 53(1)(b)(ii) and 52(3)(a) exclusion limited to where 55(2) did not apply to the stock dividend or PUC increase
Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(b) - Subparagraph 53(1)(b)(ii) no basis reduction for s. 84(1) dividend to which s. 55(2) applied
Income Tax Act - Section 52 - Subsection 52(3) cost under s. 52(3) for stock dividend amount to which s. 55(2) applied
Income Tax Act - Section 52 - Subsection 52(2) property dividended has cost equal to FMV where subject to s. 55(2)
27 November 2018 CTF Roundtable Q. 3, 2018-0779891C6 - MLI Issues Treaties - Multilateral Instrument - Article 8 - Article 8(1) overview of removal of provisional reservations
27 November 2018 CTF Roundtable Q. 4, 2018-0779931C6 - OECD TP Guidelines Income Tax Act - Section 247 - New - Subsection 247(2) 2017 OECD Transfer Pricing Guidelines reflects the interpretation of OECD countries, including Canada, before their release
27 November 2018 CTF Roundtable Q. 5, 2018-0780041C6 - GAAR on PUC reduction Income Tax Act - Section 84 - Subsection 84(3) no challenge of a reduction of PUC of shares of DC held by TC before redemption
Income Tax Act - Section 245 - Subsection 245(4) avoidance of s. 88(1)(b) where insufficient safe income was abusive
Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(b) where Parent acquired the net tax equity in Subco at a bargain price (low share ACB), avoiding a s. 88(1)(b) gain on wind-up through reducing PUC is abusive
27 November 2018 CTF Roundtable Q. 6, 2018-0779901C6 - Appeal Process Update Income Tax Act - Section 165 - Subsection 165(3) service standard for resolving objections
27 November 2018 CTF Roundtable Q. 7, 2018-0779951C6 - Recent Negligence Cases Income Tax Act - Section 152 - Subsection 152(1) CRA positions on plain vanilla domestic structures may not be portable to offshore structures
27 November 2018 CTF Roundtable Q. 8, 2018-0779961C6 - RPI and Risk-Based Audits Income Tax Act - Section 152 - Subsection 152(1) IRAS (Tier I risk assessment)
27 November 2018 CTF Roundtable Q. 9, 2018-0779981C6 - TOSI–Excluded Amount - Non-Related Bus. Exception Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares investment business a business for excluded share purposes
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(i) “derivation” for TOSI purposes of dividends from previously earned income from a related business
27 November 2018 CTF Roundtable Q. 10, 2018-0780081C6 - TOSI – Excluded Shares & Related Business Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares exclusion for investment business or passive amounts not derived from a related business
27 November 2018 CTF Roundtable Q. 11, 2018-0779971C6 - Record Retention Policy Guideline Income Tax Act - Section 232 - Subsection 232(1) - Solicitor-Client Privilege solicitor-client privilege does not extend to list of uncertain tax positions
Income Tax Act - Section 231.1 - Subsection 231.1(1) in some circumstances CRA considers that it can require a taxpayer to disclose its uncertain tax positions
27 November 2018 CTF Roundtable Q. 12, 2018-0785021C6 - Investment management fees
27 November 2018 CTF Roundtable Q. 13, 2018-0779991C6 - 20(1)(c) & Triangular Amalgamation Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) interest on money borrowed by parent for use in connection with a triangular amalgamation to redeem preferred shares issued by Target can be deductible
27 November 2018 CTF Roundtable Q. 14, 2018-0779911C6 - Foreign exchange Income Tax Act - Section 20 - Subsection 20(14) accrued interest translated on transfer date
Income Tax Act - Section 261 - Subsection 261(2) - Paragraph 261(2)(b) accrued interest under both ss. 20(14)(a) and (b) is translated at the transfer date spot rate
27 November 2018 CTF Roundtable Q. 15, 2018-0780011C6 - Class 14.1 Income Tax Act - Section 13 - Subsection 13(35) - Paragraph 13(35)(a) capital expenditures not giving rise to property are deemed to be goodwill property
Income Tax Regulations - Schedules - Schedule II - Class 14.1 Class 14.1 “property” need not be property
27 November 2018 CTF Roundtable Q. 16, 2018-0780031C6 - 2018 CTF - Q16 - Passive Income Reduction Rules Income Tax Act - Section 125 - Subsection 125(5.1) - Paragraph 125(5.1)(b) effective date of the passive income rules for non-calendar year associated corporations