| 27 October 2020 CTF Roundtable Q. 1, 2020-0860991C6 - ACB increase due to misalignment of ACB |
Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(b) |
GAAR may apply to spin-offs that effect a disproportionate distribution of high basis assets to the Spinco |
| Income Tax Act - Section 245 - Subsection 245(4) |
duplication of ACB is abusive |
| 27 October 2020 CTF Roundtable Q. 2, 2020-0861001C6 - Consolidation of safe income in a corporate group |
Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) |
there potentially can be a safe income pick-up from a corporation over which there is no significant influence |
| 27 October 2020 CTF Roundtable Q. 3, 2020-0861031C6 - Safe income on reorganization |
Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) |
a spinner corporation is expected to ensure that sufficient tax basis in its shares is transferred to the shares of spinco that also is receiving safe-income rich spin assets |
| 27 October 2020 CTF Roundtable Q. 4, 2020-0862451C6 - Sale of TCP by a partnership |
Income Tax Act - Section 116 - Subsection 116(5) |
the s. 116 certificate limit and the purchase price can coincide even where the vendor partnership has resident partners |
| 27 October 2020 CTF Roundtable Q. 5, 2020-0864281C6 - Article IV:6 of the Canada-US Treaty |
Treaties - Income Tax Conventions - Article 10 |
choice between application of France and US Convention to dividends paid by Canco at bottom of multi-tier structure |
| Treaties - Income Tax Conventions - Article 4 |
where Canco is held by fiscally transparent Franceco, which is held by LP with only some US partners, there is a choice as to which Treaty to apply |
| 27 October 2020 CTF Roundtable Q. 6, 2020-0862471C6 - MLI and Principal Purpose Test |
Treaties - Multilateral Instrument - Article 7 - Article 7(1) |
CRA will be guided by the OECD examples in applying the PPT |
| 27 October 2020 CTF Roundtable Q. 7, 2020-0861041C6 - CTF Question 7 - Subsection 105(1) |
Income Tax Act - 101-110 - Section 105 - Subsection 105(1) |
generally no taxable benefit for beneficiary’s rent-free use of personal-use property of the trust |
| Income Tax Act - Section 73 - Subsection 73(1.01) - Paragraph 73(1.01)(c) |
use by the children of the cottage held in an alter ego or joint spousal trust is not permitted |
| 27 October 2020 CTF Roundtable Q. 8, 2020-0861061C6 - SDA and Formula-Based Plans |
Income Tax Act - Section 248 - Subsection 248(1) - Salary Deferral Arrangement |
formula-based appreciation plans are not SDAs where the formula closely tracks the FMV of the employer’s shares over the plan’s duration |
| 27 October 2020 CTF Roundtable Q. 9, 2020-0866671C6 - entity classification of UK LLP |
Income Tax Act - Section 96 |
UK LLP has the attributes of a corporation rather than a partnership |
| Income Tax Act - Section 248 - Subsection 248(1) - Corporation |
a UK LLP is a corporation in light of its separate legal personality and sole responsibility for debts and conduct of business |
| 27 October 2020 CTF Roundtable Q. 10, 2020-0860961C6 - Refreeze and 74.4(2) |
Income Tax Act - Section 74.4 - Subsection 74.4(3) |
a refreeze does not reduce the outstanding amount |
| Income Tax Act - Section 74.4 - Subsection 74.4(2) |
a refreeze does not reduce the quantum of any imputed interest under s. 74.4(2) |
| 27 October 2020 CTF Roundtable Q. 11, 2020-0860981C6 - Refinancing Prescribed Rate Loans |
Income Tax Act - Section 74.5 - Subsection 74.5(2) |
fresh prescribed rate loan could be made immediately after repayment of 1st such loan out of sale proceeds |
| Income Tax Act - Section 74.1 - Subsection 74.1(3) |
a 1% prescribed-rate loan can effectively replace a 2% loan if the latter loan is repaid with sales proceeds |
| 27 October 2020 CTF Roundtable Q. 12, 2020-0862501C6 - COVID-19 and Prior APAs/Current MAPs |
Income Tax Act - Section 247 - New - Subsection 247(2) |
CRA will assess the COVID impact on APAs on a case-by-case basis |
| 27 October 2020 CTF Roundtable Q. 13, 2020-0861021C6 - Reimbursement of Equipment |
Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) |
CRA extends the COVID $500 safe harbor re employer reimbursement of home office computers to other home office items |
| 27 October 2020 CTF Roundtable Q. 14, 2020-0860971C6 - Section 86 Reorganization of Capital |
Income Tax Act - Section 86 - Subsection 86(1) |
a s. 86 reorg normally requires the filing of articles of amendment |
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