| 15 June 2021 STEP Roundtable Q. 1, 2021-0892681C6 - Trust Residency and Departure Tax |
Income Tax Act - Section 220 - Subsection 220(4.5) |
CRA generally requires LCs to secure exit tax |
| 15 June 2021 STEP Roundtable Q. 2, 2021-0882201C6 - Definition of Arm's Length Transfer |
Income Tax Act - Section 94 - Subsection 94(1) - Contribution |
loan on arm's length terms by resident father to NR trust for his resident children caused the trust to be a s. 94(3)(a) trust |
| Income Tax Act - Section 94 - Subsection 94(1) - Arm's Length Transfer |
a loan made, on arm’s length terms to a trust, that is motivated partly by who the beneficiaries are, is not an arm’s length transfer |
| 15 June 2021 STEP Roundtable Q. 3, 2021-0883151C6 - Reasonable Return on Note |
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (d) - Subparagraph (d)(i) |
interest-bearing promissory note distributed to passive beneficiary regarding a related business would be includible under para. (d) subject to reasonable return exclusion |
| Income Tax Act - Section 120.4 - Subsection 120.4(1) - Reasonable Return |
the reasonable return TOSI exclusion can apply to interest-bearing promissory notes issued in satisfaction of family trust distributions |
| 15 June 2021 STEP Roundtable Q. 4, 2021-0883141C6 - TOSI on Dividends |
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares |
excluded share, or excluded amount - (e)(i), exclusion would apply re dividend income from equally–owned real estate rental company |
| Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Amount - Paragraph (e) - Subparagraph (e)(i) |
a passive real estate company would not generate TOSI to its equal significant shareholders |
| 15 June 2021 STEP Roundtable Q. 5, 2021-0883001C6 - Income Attribution from AET |
Income Tax Act - Section 248 - Subsection 248(5) |
substituted property rule does not apply to "second generation income" |
| Income Tax Act - Section 82 - Subsection 82(2) |
application of s. 82(2) where s. 75(2) applies to dividend income allocated by a partnership |
| Income Tax Act - Section 75 - Subsection 75(2) |
"second generation income" is not subject to s. 75(2) attribution |
| 15 June 2021 STEP Roundtable Q. 6, 2021-0883021C6 - Vested Indefeasibly |
Income Tax Act - 101-110 - Section 108 - Subsection 108(1) - Trust - Paragraph (g) |
meaning of vested indefeasibly/ no particular T3 disclosure is required where all the interests in a trust have vested indefeasibly |
| Income Tax Act - Section 70 - Subsection 70(5) |
s. 107.4(4) establishes floor for FMV proceeds under s. 70(5) of a trust capital interest that has vested indefeasibly |
| 15 June 2021 STEP Roundtable Q. 7, 2021-0879021C6 - Subsection 107(2) |
Income Tax Act - Section 248 - Subsection 248(25) - Paragraph 248(25)(a) |
2nd trust whose beneficiaries were named beneficiaries of 1st trust was not itself a beneficiary |
| Income Tax Act - 101-110 - Section 107 - Subsection 107(2) |
a trust with children beneficiaries could not roll-out property under s. 107(2) to a trust for the benefit of those children |
| 15 June 2021 STEP Roundtable Q. 8, 2021-0887411C6 - ITRD - Remissions |
Income Tax Act - Section 152 - Subsection 152(1) |
90 business day (or longer) ruling services standard, and graduated remission of fees where target not met |
| 15 June 2021 STEP Roundtable Q. 9, 2021-0883161C6 - Safe Income |
Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) |
scope of what is a non-deductible expense for safe income purposes |
| 15 June 2021 STEP Roundtable Q. 10, 2021-0883191C6 - Acquisition of control |
Income Tax Act - Section 129 - Subsection 129(1) - Paragraph 129(1)(a) |
a dividend refund, from a redemption also generating an AOC, arises in the taxation year commencing with the AOC |
| Income Tax Act - Section 249 - Subsection 249(4) - Paragraph 249(4)(a) |
“immediately before” timing in s. 249(4) means that a share redemption effecting an AOC generates a resulting dividend refund in the taxation year commencing with the AOC |
| 15 June 2021 STEP Roundtable Q. 11, 2021-0883221C6 - excess TFSA amount |
Income Tax Act - Section 207.02 |
excess can only be eliminated through future contribution room where investments become worthless |
| Income Tax Act - Section 207.06 - Subsection 207.06(1) |
CRA cannot waive tax for an innocent TFSA overcontribution where the investments become worthless |
| 15 June 2021 STEP Roundtable Q. 12, 2021-0885671C6 - Property owned jointly |
Income Tax Act - Section 73 - Subsection 73(1.01) - Paragraph 73(1.01)(c) - Subparagraph 73(1.01)(c)(iii) |
a s. 73(1.01)(c)(iii) trust can receive jointly or individually owned property from the spouses |
| 15 June 2021 STEP Roundtable Q. 13, 2021-0883051C6 - Paragraph 104(13.4)(a) |
Income Tax Act - 101-110 - Section 104 - Subsection 104(4) - Paragraph 104(4)(a) - Subparagraph 104(4)(a)(ii.1) |
overall effect of making the election under s. 104(4)(a)(ii.1) |
| Income Tax Act - 101-110 - Section 104 - Subsection 104(13.4) - Paragraph 104(13.4)(a) |
no deemed year end under s. 104(13.4)(a) on settlor’s death if trust has elected under s. 104(4)(a)(ii.1) |
| 15 June 2021 STEP Roundtable Q. 14, 2021-0883041C6 - Extending the GRE 36-month period |
Income Tax Act - 101-110 - Section 104 - Subsection 104(27) |
s. 104(27) designation could not be made for a pension amount received after a trust ceased to be a GRE |
| Income Tax Act - 101-110 - Section 104 - Subsection 104(24) |
pension benefit not distributed to beneficiary might nonetheless be payable in the year |
| Income Tax Act - Section 248 - Subsection 248(1) - Graduated Rate Estate |
no CRA discretion to extend the 36 month period |
| 15 June 2021 STEP Roundtable Q. 15, 2021-0888731C6 - Online T3 Registration |
Income Tax Act - Section 248 - Subsection 248(1) - Business Number |
immediate on-line registration is available to most trusts |
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