Income Tax Severed Letters - 2014-11-26

Ruling

2014 Ruling 2011-0415811R3 - Internal reorganization

CRA Tags
246(1), 69(4), 56(2), 85(1)(e.2), 15(1)
Summary Under
Tax Topics - Income Tax Act - Section 84 - Subsection 84(2)
cash distribution to parent of indirect proceeds of internal reorg
Summary Under
Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) - Paragraph 85(1)(e.2)
s. 85(1)(e.2) non-application to transfers at ACB to sisters in order to limit ACB shift

Principal Issues: Whether the transfers by Subco 2 of all of its FA 1 Shares, and by Subco 3 of all of its FA 2 Shares, to Can Holdco, as described below, in each case, would be subject to the application of paragraph 85(1)(e.2)?

Position: No.

Reasons: Based on the specific unique facts of the present situation, it would not be reasonable to regard any part of the excess, as described in paragraph 85(1)(e.2), as a benefit that Subco 2 or Subco 3 desired to have conferred on a person related to Subco 2 or Subco 3. Consequently, paragraph 85(1)(e.2) would not apply. However, in another case, depending on its specific facts, paragraph 85(1)(e.2) could apply.

Technical Interpretation - External

3 November 2014 External T.I. 2014-0537191E5 - Social assistance- gift cards

CRA Tags
56(1)(u), 110(1)(f), ITR 233 (2)

Principal Issues: 1. Request for information on T5007.

Position: 1. No position taken.

Reasons: 1. General information provided.

30 September 2014 External T.I. 2014-0533671E5 - METC-Part of a hip replacement

CRA Tags
ITR 5701, ITR 5700, 118.2(2)

Principal Issues: Does the cost of a ceramic femoral head as part of a hip replacement, qualify as a medical expense for the METC?

Position: Likely in this situation.

Reasons: Legislation and intent

25 September 2014 External T.I. 2014-0545611E5 - Lump-sum support payments

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

Principal Issues: 1. Taxation of a lump-sum payment to a former spouse or common-law partner.

Position: 1. No position taken. General information provided.

Reasons: See below.

15 September 2014 External T.I. 2014-0540961E5 - Taxability of Support Payments

CRA Tags
60(b)

Principal Issues: Taxability of support payments and the difference between the two as it relates to the taxpayers file.

Position: General information provided

Reasons: Not a new interpretative query

27 August 2014 External T.I. 2014-0527411E5 F - Crédit d'impôt pour volontaires - 118.07

CRA Tags
118.07

Principales Questions: 1. Est-ce que XXXXXXXXXX est un « organisme admissible de recherche et sauvetage » au sens du paragraphe 118.07(1)? Is the XXXXXXXXXX an "eligible search and rescue organization" within the meaning of subsection 118.07(1)?
2. Qui peut attester du nombre d'heures de services admissibles? Who can attest to the number of hours of eligible services?
3. Quelles activités constituent des services admissibles aux fins du crédit d'impôt? What activities constitute eligible services for the tax credit purposes?

Position Adoptée: 1. C'est à l'organisme de faire cette détermination. This determination must be made by the organization.
2. Le dirigeant d'équipe de l'organisme admissible auquel le volontaire a fourni des services admissibles, ou un autre particulier qui remplit un rôle semblable à celui du dirigeant d'équipe. The team president of the eligible organization to which the volunteer individual provided eligible services, or other individual who fulfils a similar role to that of the team president.
3. Tous services (sauf les services admissibles de pompier volontaire) que le particulier fournit à titre de volontaire auprès d'un organisme admissible de recherche et sauvetage, à condition que ces services consistent principalement à intervenir et à être de permanence en cas de situations de recherche et sauvetage ou de situations d'urgence connexes, à assister à des réunions de l'organisme et à participer aux formations indispensables liées à la prestation de services de recherche et sauvetage. All services (other than eligible volunteer firefighting services) provided by an individual as a volunteer to an eligible search and rescue organization, provided that those services consist primarily of responding to and being on call for search and rescue and related emergency calls, attending meetings held by the organization and participating in required training related to search and rescue services.

Raisons: La Loi. The Law.

21 August 2014 External T.I. 2014-0531421E5 - Employment Income Earned by an Indian

CRA Tags
81(1)(a), Indian Act 87(1)(b), 153(1)

Principal Issues: Does the employment income of an Indian qualify for an exemption from income tax where the duties of employment are performed on certain locations including traditional lands?

Position: Question of fact, but in the circumstances given no.

Reasons: Whether a piece of land is a "reserve" is a question of fact that would ordinarily be raised with an Indian's local band office or Aboriginal Affairs and Northern Development Canada. Even though the lands on which the employee performs his employment duties are traditional lands, these lands may not necessarily meet the definition of a reserve under the Indian Act.

1 August 2014 External T.I. 2014-0523531E5 - Employment Income Earned by an Indian

CRA Tags
81(1)(a), 153(1)

Principal Issues: 1. Is the employment income earned by an Indian exempt from tax where the Indian is employed by a corporation to perform work in XXXXXXXXXX located on a reserve.
2. What is the responsibility of the employer for withholdings?

Position: 1. Whether employment income is taxable or exempt is a question of fact, but in this situation, the income may be exempt from tax.
2. See document.

Reasons: 1. Guideline 1 may apply because the income is earned on a reserve.
2. Subsection 153(1) of the Income Tax Act.

30 July 2014 External T.I. 2014-0537591E5 - Indian Employment and Pension Income

CRA Tags
81(1)(a)

Principal Issues: Whether additional information from taxpayer's employer will change our previous position in document 2013-050790

Position: No

Reasons: New information from employer does not provide details on why the income should be exempt.

Conference

10 October 2014 APFF Roundtable, 2014-0534841C6 F - Majority-interest beneficiary

CRA Tags
251.1(3), 251.1(4)
Summary Under
Tax Topics - Income Tax Act - Section 251.1 - Subsection 251.1(3) - Majority-interest beneficiary
includes affiliates with no actual beneficial interest in trust

Principal Issues: A person is not a beneficiary of a trust. The person is affiliated to a majority-interest beneficiary. Whether the person would also be a majority-interest beneficiary, as defined in subsection 251.1(3).

Position: The person does not need to be a beneficiary of the trust to be a majority-interest beneficiary of a trust if the person is affiliated with a person who has an interest described in paragraph (a) or (b) of the definition of the expression majority-interest beneficiary in subsection 251.1(3).

Reasons: Wording of the Act.

10 October 2014 APFF Roundtable, 2014-0534811C6 F - Interest deductibility

CRA Tags
20(1)(c)(i)
Summary Under
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i)
no deductibility if permanent policy of not paying dividends

Principal Issues: Is the CRA position in paragraph 31 of Interpretation Bulletin IT-533 still valid after the comments expressed by the court in Swirsky v. The Queen?

Position: Yes.

Reasons: It is a question of fact as to whether a reasonable expectation of income exists.

10 October 2014 APFF Roundtable Q. 20, 2014-0534671C6 F - D&D Livestock

CRA Tags
55(2), 245(2)
Summary Under
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4)
unjustified duplication of fiscal attributes is abusive
Summary Under
Tax Topics - Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(b) - Subparagraph 55(2.1)(b)(i)
CRA is concerned by planining that can result in an unjustified duplication of fiscal attributes including ACB

Principales Questions: What is the CRA's position with respect to the D&D Livestock decision?

Position Adoptée: CRA will apply subsection 245(2) in similar files.

Raisons: The three requirements stated by the Supreme Court of Canada in Canada Trustco v. Canada, 2005 DTC 5523 (S.C.C.) for the GAAR to apply are satisfied.

12 September 2012 Annual CTF Roundtable, 2012-0453381C6 - 2012 CICA Conference

CRA Tags
67.6, 12(1)(x), 18(1)(t), 8, 80, 251(1), 78
Summary Under
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x)
forgiveness of unremitted GST
Summary Under
Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) - Forgiven Amount
tax debt not a commercial debt obligation
Summary Under
Tax Topics - Income Tax Act - Section 9 - Forgiveness of Debt
forgiveness of source deductions on income account

(Redacted.)

Technical Interpretation - Internal

27 August 2014 Internal T.I. 2014-0540461I7 - Indian Tax Exemption - RRSPs, RRIFs

CRA Tags
81(1)(a)
Summary Under
Tax Topics - Other Legislation/Constitution - Federal - Indian Act - Section 87
RRSP withdrawals to Indian

Principal Issues: Whether payments from a RRSP or RRIF are taxable when paid to an individual who is an Indian.

Position: Likely.

Reasons: Would usually be contributed from earned income which does not include exempt income. However, amounts transferred from a RPP to a RRSP or RRIF in respect of exempt employment income and therefore exempt pension income would be treated in same manner as exempt.