| 3 December 2024 CTF Roundtable Q. 1, 2024-1038181C6 - Safe Income and Preferred Shares |
Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) |
safe income of preferred shares issued on a s. 85 share-for-share exchange matches the safe income of the exchanged shares, and subsequently participates based on its dividend rate |
| 3 December 2024 CTF Roundtable Q. 2, 2024-1038191C6 - Subsection 55(2) and Intra-Corporate Dividends |
Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(b) |
CRA continues to be prepared to issue rulings dealing with the s. 55(2.1)(b) purpose tests |
| 3 December 2024 CTF Roundtable Q. 3, 2024-1038151C6 - Notifiable Transactions |
Income Tax Act - Section 212 - Subsection 212(3.1) |
s. 212(3.1) generally inapplicable where immediate funder receives only common shares financing from ultimate funder |
| Income Tax Act - Section 237.4 - Subsection 237.4(4) - Paragraph 237.4(4)(b) |
B2B reporting engaged where loan from immediate NR parent (funded in turn in part with debt from ultimate parent) bears reduced (10%) withholding |
| 3 December 2024 CTF Roundtable Q. 4, 2024-1038161C6 - EIFEL and the Excluded Entity Exception |
Income Tax Act - Section 18.2 - Subsection 18.2(1) - Excluded Entity - Paragraph (c) - Subparagraph (c)(i) |
90% not applied as a strict threshold for determining “substantially all” |
| 3 December 2024 CTF Roundtable Q. 5, 2024-1038171C6 - EIFEL and ATI Calculation where Taxpayer has Non-Capital Losses |
Income Tax Act - Section 18.2 - Subsection 18.2(1) - Adjusted Taxable Income - A - D - Paragraph D(b) |
not permitting taxable income to be negative in the ATI formula is producing anomalous results |
| 3 December 2024 CTF Roundtable Q. 6, 2024-1038251C6 - EIFEL - Pre-Regime Election and Amalgamations and Liquidations |
Income Tax Act - Section 87 - Subsection 87(2.1) - Paragraph 87(2.1)(a.1) |
continuity treatment extends to the use of pre-regime capacity |
| 3 December 2024 CTF Roundtable Q. 7, 2024-1038221C6 - Post-Mortem Pipeline Bump Planning |
Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(c) - Subparagraph 88(1)(c)(vi) - Clause 88(1)(c)(vi)(B) - Subclause 88(1)(c)(vi)(B)(I) |
estate beneficiary not considered to acquire 10% interest in estate company prior to deemed s. 88(1)(d.2) and (d.3) acquisition |
| Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(d.2) |
an 11% estate beneficiary becomes a specified shareholder of the deceased’s corp. concurrently with its deemed acquisition under ss. 88(1)(d.2) and (d.3) |
| 3 December 2024 CTF Roundtable Q. 8, 2024-1038201C6 - Application of paragraph 55(2)(b) |
Income Tax Act - Section 55 - Subsection 55(2) - Paragraph 55(2)(b) |
s. 55(2)(b) interpreted so as to avoid circularity |
| 3 December 2024 CTF Roundtable Q. 9, 2024-1038271C6 - Regulation 105 |
Income Tax Regulations - Regulation 105 - Subsection 105(1) |
Reg. 105 applies amounts paid to a non-resident for services rendered in Canada even where those services have been subcontracted to a Canadian resident |
| 3 December 2024 CTF Roundtable Q. 10, 2024-1038231C6 - Intergenerational Business Transfers |
Income Tax Act - Section 84.1 - Subsection 84.1(2.31) - Paragraph 84.1(2.31)(a) |
the prohibition against multiple use of the intergenerational transfer rules does not apply to simultaneous transfers |
| 3 December 2024 CTF Roundtable Q. 11, 2024-1038241C6 - Global Minimum Tax Act – Interpretation and Application of OECD Agreed Administrative Guidance |
Other Legislation/Constitution - Federal - Global Minimum Tax Act - Section 17 - Subsection 17(6) |
CRA will administer s. 17(6) to push down taxes paid by indirect owner of reverse hybrid CE on income of the CE allocated to it, to the CE |
| Other Legislation/Constitution - Federal - Global Minimum Tax Act - Section 3 - Subsection 3(1) |
CRA will consult with Finance re potential amendments to catch up to OECD guidance in administering the GMTA |
| 3 December 2024 CTF Roundtable Q. 12, 2024-1037751C6 - Property flipping rules and corporate property transfers |
Income Tax Act - Section 12 - Subsection 12(13) - Paragraph 12(13)(b) |
s. 12(13)(b) has no continuity rules for common reorganization transactions |
| 3 December 2024 CTF Roundtable Q. 13, 2024-1038261C6 - Standard Convertible Debentures and Part XIII Tax |
Income Tax Act - Section 212 - Subsection 212(3) - Participating debt interest |
s. 214(7) excess received on the conversion of a standard convertible debenture generally is not participating interest |
| Income Tax Act - Section 214 - Subsection 214(7) |
FMV excess on conversion of a convertible debenture is deemed interest under s. 214(7) |
| 3 December 2024 CTF Roundtable Q. 14, 2024-1037761C6 - Availability of the Small Business Deduction |
Income Tax Act - Section 129 - Subsection 129(4) - Income or Loss |
active business income includes income from property that (having regard to Ensite) is held principally for the purpose of producing active business income |
| 3 December 2024 CTF Roundtable Q. 15, 2024-1030561C6 - The Foix decision and hybrid sales |
Income Tax Act - Section 84 - Subsection 84(2) |
Foix overruled a more restrictive approach to s. 84(2) in some earlier cases (and restricts Geransky) |
| 3 December 2024 CTF Roundtable Q. 16, 2024-1038281C6 - Indian Act Tax Exemption for Employment Income and Employees of a Limited Partnership |
Other Legislation/Constitution - Federal - Indian Act - Section 87 |
a partly owned LP of a 1st Nations band did not generate significant economic benefits to the reserve, its Indian employees were not exempted on off-reserve income |
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