Income Tax Severed Letters - 2014-12-17

Technical Interpretation - External

21 November 2014 External T.I. 2014-0553081E5 - Paragraph 67.1(2)(a)

CRA Tags
67.1(3), 67.1(2), 149(1)(l), 67.1(1)
Summary Under
Tax Topics - Income Tax Act - Section 67.1 - Subsection 67.1(2) - Paragraph 67.1(2)(a)
extension of Pink Elephant to trade expositions

Principal Issues: Whether meals and entertainment are excluded from the 50% limitation imposed by subsection 67.1(1) pursuant to paragraph 67.1(2)(a)

Position: Question of fact.

Reasons: See below.

7 November 2014 External T.I. 2014-0549571E5 F - Attribution rule

CRA Tags
74.4(4), 74.4(2)
Summary Under
Tax Topics - Income Tax Act - Section 74.4 - Subsection 74.4(4)
disqualification by interests held through a 2nd corporation

Principales Questions: In two scenarios where a trust has an indirect interest in a corporation, whether the condition provided in paragraph 74.4(4)(a) is met?

Position Adoptée: No in both scenarios.

Raisons: Wording of paragraph 74.4(4)(a).

15 October 2014 External T.I. 2014-0539731E5 - Section 207.31

CRA Tags
207.31
Summary Under
Tax Topics - Income Tax Act - Section 207.31
part change in use can trigger tax

Principal Issues: 1. Is the tax under section 207.31 applied based on the FMV of the property at the time the gift was made or at the time of change in use? 2. Does the tax apply on all parcels of land that formed part of a gift or does it apply only to those parcels that had a change in use? 3. Can the tax be applied more than once?

Position: 1. The tax is applied based on the FMV of the property at the time of the change in use. 2. It depends, question of fact and law. 3. Potentially, yes.

Reasons: Legislation

10 July 2014 External T.I. 2014-0529791E5 - Pension income arising in Hong Kong

CRA Tags
Canada-Hong Kong tax agreement, 81(1)(e), 81(1)(d)
Summary Under
Tax Topics - Income Tax Act - Section 81 - Subsection 81(1) - Paragraph 81(1)(e)
Hong Kong an ally of Canada

Principal Issues: Whether pension benefits arising in Hong Kong Special Administrative Region and received by a resident of Canada are exempt from tax in Canada in whole or in part because of the Canada Hong Kong tax agreement

Position: No.

Technical Interpretation - Internal

18 March 2014 Internal T.I. 2013-0515081I7 - Pension income splitting - RCAs

CRA Tags
207.6(6), ITR 6802.1(2), 60.03(1)
Summary Under
Tax Topics - Income Tax Act - Section 60.03 - Subsection 60.03(1) - Eligible Pension Income
income splitting where RCA payments

Principal Issues: 1. What are the necessary conditions for payments received from a retirement compensation arrangement ("RCA"), established by Retirement Compensation Arrangements Regulations, No.1 pursuant to the Special Retirement Arrangements Act, to be eligible for pension income splitting under section 60.03 of the Income Tax Act (the "Act")?
2. What is the amount eligible for pension income splitting for purposes of section 60.03 of the Act under the two scenarios provided?

Position: The amount of eligible payments out of or under the RCA is limited to the lessor of:
o the total of all payments out of or under the RCA made in the year to the individual, and
o an amount which is calculated as 35 times the "defined benefit limit" for the year, as defined in subsection 8500(1) of the Income Tax Regulations, (for 2013: 35 x $2,696.67 = $94,383), less the individual's other eligible pension income as determined under subsection 118(7).

Reasons: See below.