Income Tax Severed Letters - 2015-06-17

Ruling

2015 Ruling 2014-0527961R3 - Deemed dividend under subsection 90(2)

CRA Tags
90(5), 90(2)
€ and US$-denominated shares viewed as separate classes

Principal Issues: 1. Do two groups of shares denominated in different currencies represent different classes of shares for purposes of subsection 90(2)? 2. Is a distribution in respect of the two groups of shares made in proportion to the capital contributed in respect of the shares deemed to be a dividend under subsection 90(2)?

Position: 1. Yes; 2. Yes.

Reasons: 1. The two groups of shares will be considered to be two classes of shares because they have different rights attached to them. 2. The distribution will be in respect of two classes of shares and will be a pro-rata distribution in respect of all shares of each class.

2015 Ruling 2014-0536661R3 - Disposition of property by a foreign partnership

CRA Tags
95(1)
still dormant mine as excluded property
reliance on excluded property exclusion on dissolution of Foreign LP as a result of the wind-up of its FA partners

Principal Issues: Whether disposition of excluded property by Foreign LP results in FAPI.

Position: No

Reasons: FAPI definition in subsection 95(1).

2014 Ruling 2013-0514581R3 - XXXXXXXXXX assistance grant

CRA Tags
ITR 233(1), 6(1)(a), 56(1)(u), 5(1), ITR 200(2)(g), ITR 200(1), 153(1)(a)

Principal Issues: Whether XXXXXXXXXX assistance grant given due to XXXXXXXXXX, is included under 5(1), 6(1)(a) or 56(1)(u).

Position: No

Reasons: See below

Technical Interpretation - External

14 May 2015 External T.I. 2013-0498841E5 - 149(1.2)(b) - Meaning of Distributor

CRA Tags
149(1)(d.6), 149(1.2)(b), 149(1)(d.5), 149(1)(c)

Principal Issues: Is an electricity transmitter a "distributor" within the meaning of "distributor" in paragraph 149(1.2)(b) of the Income Tax Act?

Position: No.

Reasons: Industry specific terms are the intended in that provision. See analysis.

20 January 2015 External T.I. 2014-0541941E5 - Disposition of a life insurance policy

CRA Tags
148

Principal Issues: Policyholder requested we verify the computation of the taxable policy gain on the disposition of his life insurance policy. More specifically, we were asked whether the policy premiums and policy dividends were correctly accounted for.

Position: Question of fact. Provided general comments.

Reasons: General comments based on section 148 of the Act. Specific concerns as to amounts reported must be referred to the insurer. Disputes between policyholders and their insurers may be referred to the OmbudService for Life and Health Insurance or Financial Services Commission of Ontario.

Technical Interpretation - Internal

10 March 2015 Internal T.I. 2015-0574291I7 - XXXXXXXXXX Termination Payment

CRA Tags
212(1)(d)
lease termination payment received by lessor in lieu of rent

Principal Issues: Will paragraph 212(1)(d) of the Act apply to the payment by Canco to Forco as the result of their Mutual Termination Agreement?

Position: Yes

Reasons: The payment will be made in lieu of payment of rent for the right to use in Canada, a property.

24 December 2014 Internal T.I. 2013-0495791I7 - Community Relocation Program

CRA Tags
44(5), 40(2)c), 54, 40(2)(b), 62(1)(d), 13(4.1)

Principal Issues: What would be the income tax implications of the payments for a voluntary relocation in a remote community?

Position: Question of fact.

Reasons: See letter below.

18 November 2014 Internal T.I. 2014-0534351I7 - Non-Profit Organization - Lottery Revenue

CRA Tags
149(1)(l)

Principal Issues: Whether the lottery income received by the Association is subject to taxation in the hands of the Association.

Position: Likely yes.

Reasons: It does not appear that this income is incidental or arises from activities directly connected to its not-for-profit objectives, which is to support physical and recreational activities as a way of life in XXXXXXXXXX.