Income Tax Severed Letters - 2011-04-08


2011 Ruling 2009-0343371R3 F - Public Foundation

Unedited CRA Tags
149.1(1), 149.1(3)

Principales Questions: 1. Whether the loan will be a debt incurred for the purchase of an investment under 149.1(3)(d)? 2. Whether a business will be carried on by the foundation for paragraph 149.1(3)(a)? 3. Whether the foundation will continue to be operated exclusively for charitable purposes for the definition of charitable foundation in subsection 149.1(1)?

Position Adoptée: 1. Yes. 2. No. 3. Yes.

Raisons: 1. The arrangement may be considered to be a form of investment in the particular circumstances. 2. No business based on the facts. 3. Confirmation obtained from Charities Directorate.

2010 Ruling 2009-0330901R3 - Reorganization of XXXXXXXXXX

Unedited CRA Tags
107(2.1); XXXXXXXXXX ; 104(6); 104(21); 245
no ACB reduction for capital gain distributed to Trust parent on repurchase of most Trust units notwithstanding parent amalgamation before Trust year end
recognition of capital loss on distribution of capital gain through redemption of most of trust units by corporate unitholder
no forgiven amount on transfer by unit trust to its parent of debt owing by parent

Principal Issues: 1. Will subsection 107(2.1) apply to the distribution of property by Subco to Trust, resulting in a capital loss to Subco? 2. Will the GAAR apply?

Position: 1. Yes. 2. No.

Reasons: 1. The application of subsection 107(2.1) on the final distribution is not subject to challenge in these circumstances. 2. This is not the type of transaction to which the GAAR would apply, no avoidance transaction.

2010 Ruling 2010-0377601R3 F - Post Mortem Planning

Unedited CRA Tags
84(2); 84.1; 245(2)

Principales Questions: Post Mortem Planning

Position Adoptée: Favourable rulings provided

Raisons: Meets the requirements of the law.

Technical Interpretation - External

30 March 2011 External T.I. 2010-0390591E5 F - Cotisation spéciale

Unedited CRA Tags
amounts paid by set-off are both paid even though no movement of funds
amounts assessed against the taxpayer by co-owners not deductible until expended on or in the business

Principales Questions: Dans une situation donnée, est-ce qu'une cotisation spéciale peut être déductible dans le calcul du revenu d'un contribuable?

Position Adoptée: Peut être déduite ou capitalisée, selon les faits, seulement lorsque la dépense a été engagée par le syndicat des copropriétaires.

Raisons: Analyse législative.

29 March 2011 External T.I. 2011-0397121E5 - Payments in Relation to Inventions and Designs

Unedited CRA Tags

Principal Issues: Whether payments made to a taxpayer in respect to inventions and designs created while the taxpayer was employed by an employer would be considered income from employment, or whether they would be considered income from a business, when the payments continue after the employment has ceased.

Position: In our view, where rights to an invention or a design vest with the employer, and where a taxpayer continues to receive payments for that invention or design after employment ceases, section 6(3) would apply.

Reasons: Previous interpretations given.

29 March 2011 External T.I. 2011-0395041E5 - Municipal Councillors' Automobile Expenses

Unedited CRA Tags
6(1)(b); 8(1)(h.1); 81(3)

Principal Issues: Explanation of rules pertaining to municipal officers' allowances.

Position: General information provided.

18 March 2011 External T.I. 2010-0376821E5 - retroactive spousal support

Unedited CRA Tags
56.1(4), 60(b), 56(1)(b)

Principal Issues: Can a lump sum amount paid for retroactive spousal support in respect of periods prior to the date of a written agreement qualify as a "support amount" in subsection 56.1(4) of the Income Tax Act (the "Act")?

Position: No.

Reasons: A lump sum payment for retroactive spousal support is not for amounts that were payable on a periodic basis that were due after the date of a written agreement that had fallen into arrears and therefore the amount paid does not meet the definition of support amount in subsection 56.1(4) of the Act.

15 March 2011 External T.I. 2010-0361371E5 - Student Loans

Unedited CRA Tags
56(1)(n), 56(1)(o), 56(3)

Principal Issues: Whether a student loan is included in income.

Position: Question of fact.

Reasons: Whether an amount is included in the recipient's income depends on the facts and documentation of a particular assistance program, including the eligibility requirements for the loan or award, and whether the loan or award is granted as a result of the parent's or student's employment.

10 March 2011 External T.I. 2010-0390061E5 - Pakistani withholding tax - 126(2)

Unedited CRA Tags
126(2); Art. VII, XII and XXII Conv. Can-Pakistan

Principal Issues: Whether Article XXII of the Convention entitles a Canadian taxpayer to claim a foreign tax credit for an amount of taxes withheld by a resident of Pakistan in a given case?

Position: Question of fact.

Reasons: Interpretation of the Act and the Convention

10 March 2011 External T.I. 2010-0357171E5 - HRTC - change in marital status

Unedited CRA Tags

Principal Issues: What are the maximum amounts of qualifying expenditures that two individuals can claim for the HRTC when the individuals marry in the eligible period?

Position: Depends on the facts.

Reasons: The definitions of qualifying renovation and qualifying expenditure are relevant to the determination, as is subsection 118.04(5) of the Act regarding the apportionment of credit.


8 October 2010 Roundtable, 2010-0373501C6 F - Al. 212(9)d) proposé - remboursement

Unedited CRA Tags
need for alteration of 2-year limitation in s. 227(5) in order to recover tax back to 2000

Principales Questions: Considérant que l'adjonction du nouvel alinéa 212(9)d) a une portée rétroactive, comment une société pourra récupérer les montants d'impôt de la Partie XIII payés en trop en application de l'alinéa 212(1)c) ?

Position Adoptée: Aucune position adoptée.

Raisons: Question actuellement sous étude par l'ARC.

8 October 2010 Roundtable, 2010-0373661C6 F - Calcul de surplus et NIIF

Unedited CRA Tags
5907(2.1) RIR
IFRS statements can only be used if prepared in accordance with local laws

Principales Questions: Est-ce que les états financiers d'une filiale d'une société publique canadienne préparés selon les NIIF pourraient être utilisés à l'égard du choix prévu au paragraphe 5907(2.1) R.I.R. ?

Position Adoptée: Seulement s'il s'agit d'états financiers préparés selon la loi du pays où cette société réside.

Raisons: Libellé du règlement.

8 October 2010 Roundtable, 2010-0373651C6 F - Monnaie fonctionnelle - PCGR et NIIF

Unedited CRA Tags
3 differences between GAAP and s. 261 determination of functional currency

Principales Questions: Est-ce que les normes comptables (PCGR ou NIIF) adoptées par une société peuvent servir d'autorités afin d'interpréter l'expression " aux fins de présentation de l'information financière " contenue à la définition de "monnaie fonctionnelle" de l'article 261 L.I.R.?

Position Adoptée: Non.

Raisons: Libellé de la L.I.R.

8 October 2010 Roundtable, 2010-0373531C6 F - Qualification de bien exclu - 95(1)

Unedited CRA Tags
95(1)"bien exclu"
factors relevant to degree of use of licence in active business

Principal Issues: Comment déterminer si une licence se qualifie de "bien exclu" au sens donné à cette expression au paragraphe 95(1) ?

Position: Question de fait.

Reasons: Application de la LIR.

Technical Interpretation - Internal

2 November 2010 Internal T.I. 2010-0366301I7 - Attribution of Trust Income and Gain

Unedited CRA Tags
75(2), 248(5)

Principal Issues: 1) Was there a transfer of property so as to engage the attribution provisions in subsection 75(2)? 2) Would the PAC assist Son? 3) Would the attribution provisions in subsection 75(2) apply?

Position: 1) Yes 2) No 3) Yes

Reasons: 1) The property transferred is an ownership interest in either XCo or #Co 2) The PAC was never triggered and it is too late to do so 3) As a capital beneficiary of Trust, the growth shares could revert back to Son pursuant to 75(2)(a)(i) and moreover, as sole trustee until XXXXXXXXXX , Son has sole control of the growth shares pursuant to 75(2)(a)(ii) and (b).