Income Tax Severed Letters - 2016-02-24

Technical Interpretation - External

7 January 2016 External T.I. 2015-0610201E5 F - HBP-Acquisition of a condominium unit

Summary Under
Tax Topics - Income Tax Act - Section 146.01 - Subsection 146.01(2) - Paragraph 146.01(2)(b)
meaning of vacant possession
Words and Phrases
vacant possession
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Self-Contained Domestic Establishment
elf-contained domestic establishment has restricted access and a kitchen, bathroom and sleeping space

Principales Questions: For the purpose of paragraph (d) of the definition of "regular eligible amount” in subsection 146.01(1), when does an individual acquire a qualifying home that is a condominium unit?

Position Adoptée: The day the individual is entitled to immediate vacant possession of it.

Raisons: For the purpose of section 146.01, paragraph 146.01(2)(b) contains a special rule that deems, an individual to have acquired a condominium unit on the day the individual is entitled to immediate vacant possession of it.

Technical Interpretation - Internal

4 February 2016 Internal T.I. 2015-0620821I7 F - Withholding of income tax at source

CRA Tags
153(1)(a)
Summary Under
Tax Topics - Income Tax Regulations - Regulation 102 - Subsection 102(1)
actual establishment if it requires 20% of the employee’s time

Principal Issues: Meaning of "reports for work" in the context of withholding of income tax at source in respect of remuneration that is salary, wages or commissions.

Position: General comments provided, but generally requires a recurring physical presence at an establishment of the employer. A home office does not generally constitute an establishment of the employer.

Reasons: Question of fact.

22 January 2016 Internal T.I. 2015-0586673I7 - Self-governing First Nations in the Yukon and BC

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

PDF with tables (118 K).

Principal Issues: Whether taxpayers would be exempt from tax under section 87 of the

Indian Act, (i) if they are members of a Yukon First Nation with or without a final land claim agreement, (ii) if they are members of Yukon First Nation and their income is situated on a reserve in the Yukon or outside the Yukon, (iii) if they are members of a Yukon First Nation and are resident or not resident in the Yukon, and (iv) if they are not a member of a Yukon First Nation and their income is earned in the Yukon, and if they are citizens of self-governing First Nations in British Columbia.

Position: See the response.

Reasons: Final Agreements of the First Nations

26 November 2015 Internal T.I. 2015-0601081I7 - Indian Income - Pension Transferred on Divorce

CRA Tags
Indian Act 87, 81(1)(a), 56(1)(a)

Principal Issues: Whether benefits of a pension plan transferred on divorce remain exempt from tax.

Position: Yes, in this situation.

Reasons: See below.

16 November 2015 Internal T.I. 2015-0598491I7 - 91(5) & FAPI included per “old” 94(1)(c)(i)(C)

CRA Tags
94(3)
Summary Under
Tax Topics - Income Tax Act - Section 91 - Subsection 91(5)
upward ACB adjustment to the CFA occurring as a result of recognized FAPI under the old s. 94(1) rules represented basis that could be distributed while the trust was subject to the new s. 94(3) trust rules

Principal Issues: Can a non-resident trust that is subject to "new" subsection 94(3) deduct an amount under subsection 91(5) in respect of a FAPI inclusion resulting from the application of "old" clause 94(1)(c)(i)(C)?

Position: Yes.

Reasons: Application of the Act.

9 November 2015 Internal T.I. 2015-0596731I7 - Forgiveness of employee debt - amount deemed nil

CRA Tags
6(15), 6(1)(a)

Principal Issues: Is an amount owed by an employee to an employer included in income if that amount is deemed to be nil under section 155.2 of the Financial Administration Act?

Position: See response

Reasons: See response

3 November 2015 Internal T.I. 2015-0606511I7 - 104(4) and improvements made to a capital property

CRA Tags
54 "adjusted cost base", 104(4), 107(1), 107(2), 108(1), 108(7), 248(1) "personal trust"

Principal Issues: Whether the cost of capital improvements made to a real property that is held by an inter vivos trust is included in the ACB of the property and in the ACB of the capital interest of the beneficiaries that have borne the cost of the improvements.

Position: The ACB of the property should include the cost of the improvements made to the property that are capital expenditures. The cost of improvements is also generally included in the ACB of the capital interest of the beneficiaries, pursuant to subsection 107(1), at the time of the disposition of their interest in the trust.

Reasons: Based on our interpretation of the pertinent sections of the Act and consistent with previous positions.