Income Tax Severed Letters

This Week's Release

Ruling

2018 Ruling 2017-0683941R3 - Split-up transactions

Unedited CRA Tags
Subsection 55(2), paragraph 55(3)(a)

Principal Issues: Whether the proposed split-up transactions meet legislative and administrative requirements?

Position: Transactions meet requirements.

Reasons: Consistent with law and administrative requirements.

Technical Interpretation - External

17 July 2018 External T.I. 2018-0753051E5 - Treatment of losses and investment income

Unedited CRA Tags
9, 12(1)(i), 20(1)(p), 38(c), 39(1)(b), 39(1)(c), 40(2)(g)(ii), 50(1), 111(1)(a), 111(1)(b), 54 capital property, 111(8) non-capital loss, 125(7) Canadian-controlled private corporation.

Principal Issues: Tax implications of losses incurred as a result of a fraudulent investment scheme.

Position: Various implications discussed.

Reasons: See below.

25 May 2018 External T.I. 2018-0761601E5 - Correspondence with XXXXXXXXXX re Tax on Split Income

Unedited CRA Tags
Proposed Amendments to Section 120.4
no excluded share exception where interposition of family trust or holdco
where spouse works in only one of two businesses, excluded amount determination requires “separate accounting for each business and a tracing of funds”
keeping time logs will “ensure that businesses are able to comply with the new rules”

Principal Issues: How the proposed changes to the tax on split income under section 120.4 apply in certain circumstances.

Position: General comments provided on certain issues related to the definition of excluded shares and excluded business.

Reasons: Wording of proposed legislation.

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