Income Tax Severed Letters - 2014-11-12

Technical Interpretation - External

21 October 2014 External T.I. 2014-0550971E5 - Beneficial owner, principal residence

CRA Tags
54, 248(1)

Principal Issues: Determination of the beneficial owner.

Position: Question of fact.

Reasons: See below.

25 September 2014 External T.I. 2013-0500911E5 F - Legal Expense - Pension Benefit

CRA Tags
60(o.1)
legal expenses incurred to dispute proposed pension benefit reduction

Principales Questions: An administrator of a pension plan is seeking the authorisation of the Office of the Superintendent of Financial Institutions ("OSFI") to reduce benefit under the pension plan. Whether the legal expenses paid by the taxpayer to make representation to OSFI against the reduction are incurred to establish a right to an amount of a benefit under the pension plan as required by clause 60(o.1)(i)(A).

Position Adoptée: Generally yes.

Raisons: Words of the Act.

Technical Interpretation - Internal

26 September 2014 Internal T.I. 2014-0525241I7 - 60(l) - Financial Dependence Ward of the Crown

CRA Tags
146(1.1), 146(1) "refund of premiums", 60(l)
Crown ward not financially dependent on deceased

Principal Issues: Whether a ward of the Crown could be considered to have been financially dependent on the child's father?

Position: No.

Reasons: As a ward of the Crown, the child was financially dependent on the Crown.

31 July 2014 Internal T.I. 2014-0536581I7 - Foreign affiliate fresh start rules

CRA Tags
138(11.91)(e), 95(2)(k), 95(2)(k.1), 14(5)
fresh start rule applies even where the indirectly acquired subsidiary (FA2) carried on a passive IP licensing operation in the preceding year
pro rata allocation of expenses required between FAPI and deemed active business income
deductions taken for whole year before carve-out under para. (f.1)

Principal Issues: 1) Whether the fresh start rules apply when a non-resident corporation becomes a foreign affiliate of a taxpayer notwithstanding that business activities of the corporation do not change. 2) Whether paragraph 138(11.91)(e) can give rise to an eligible capital expenditure.

Position: 1) Yes 2) Yes

Reasons: 1) All the requirements of 95(2)(k) are met. 2) Consistent with longstanding view in context of paragraph 149(10)(b).