Income Tax Severed Letters - 2008-06-13


2008 Ruling 2007-0231581R3 - Luxembourg fonds commun de placement

Unedited CRA Tags

Principal Issues: Whether a fonds commun de placement ("FCP") organized in Luxembourg is a co-ownership arrangement rather than a trust, corporation or partnership to the new investors?

Position: Yes.

Reasons: The attributes of an FCP more closely resemble those of a co-ownership arrangement than those of a trust, corporation or partnership. These attributes are very similar to those of an Irish CCF that was previously determined to be a co-ownership arrangement.

Technical Interpretation - External

5 June 2008 External T.I. 2008-0267401E5 - Shareholder Benefit - Imputed Rent

Unedited CRA Tags

Principal Issues: Whether an imputed rental benefit conferred on a shareholder may be reduced by an interest-free loan by the shareholder to the corporation?

Position: Yes, in certain circumstances.

Reasons: Consistent with our position in paragraph 11 of IT432R2.

5 June 2008 External T.I. 2008-0268251E5 - Taxation of Research Grants

Unedited CRA Tags

Principal Issues: Taxation of a particular research grant - is amount received by the researcher or the institution.

Position: The amount is received by the researcher and as such is taxable under paragraph 56(1)(o) to the extent that the amount received exceeds the allowable research expenses.

Reasons: The law.

5 June 2008 External T.I. 2008-0270191E5 - Motor Vehicle Expenses

Unedited CRA Tags
8(1)(h.1) 8(1)(h)

Principal Issues: In light of the Tax Court of Canada (TCC) decisions in Campbell v. The Queen (2003 DTC 420); Toutov v. The Queen (2006 DTC 2928); and Emmons v. The Queen (2006 DTC 2885), are employees entitled to deduct parking and motor vehicle expenses for travel between a home office and their employer’s business office under paragraphs 8(1)(h) and (h.1), respectively, of the Act.

Position: No.

Reasons: Those decisions are informal and very fact specific and therefore, we have not adopted any change in our general policy that travel between a home office and an employer’s place of business would be personal travel.

3 June 2008 External T.I. 2007-0226401E5 - Article 4(1)(b)(ii) of the Canada-UAE Treaty

Unedited CRA Tags

Principal Issues: Various interpretative issues relating to residency in the United Arab Emirates for the purpose of the Convention

Position: See letter

Reasons: See letter

Technical Interpretation - Internal

29 May 2008 Internal T.I. 2007-0235211I7 - Capital Cost Allowance-Bankruptcy-Debt Forgiveness

Unedited CRA Tags
80 111(8) 128(2)

Principal Issues: (1). Whether a bankrupt individual can continue to claim CCA on assets under his control while bankrupt.
(2). If the individual ceases operations at a later date, whether he or she can claim a terminal loss.
(3). Whether the UCC be adjusted by the forgiven debts that specifically relate to a specific asset or any asset.
(4). Whether forgiven credit card debt, used to purchase depreciable assets, fall under the debt forgiveness rules.

Position: (1). Yes.
(2). Yes.
(3). No.
(4) No.

Reasons: A bankrupt individual, in possession of assets under his or her control, may claim capital cost allowance or a terminal loss on assets acquired before he or she was adjudged bankrupt. The debt forgiveness rules do not apply to a bankruptcy.