Income Tax Severed Letters - 2016-03-16


2015 Ruling 2014-0540881R3 - Multi-wing split-up butterfly

CRA Tags
85(1), 55(3)(b), 55(3.1), 55(3.2)

Principal Issues: Whether the proposed transactions qualify for the butterfly exemption found in paragraph 55(3)(b).

Position: Yes

Reasons: The proposed transactions meet the requirements found in paragraph 55(3)(b), and are not subject to any of the butterfly exemption denial rules found in 55(3.1).

2015 Ruling 2014-0545531R3 - Post-Mortem Pipeline Planning

CRA Tags
84.1, 84(2)

Principal Issues: Whether section 84.1 or subsection 84(2) apply to the proposed transactions.

Position: Favourable rulings provided.

Reasons: In accordance with the provisions of the Act and our previously published positions.

2015 Ruling 2015-0592251R3 - Supplemental ruling

CRA Tags
55(3)(b), 55(3.1), 55(3.2)

Principal Issues: Amendments to ruling number 2014-054088

Position: Ruling modified

Reasons: Amendment to Ruling F of the original ruling no. 2014-054088 and confirmation that, subject to this amendment and to the conditions, limitations, qualifications, and comments set out therein, the original ruling no. 2014-054088 will continue to be binding on the CRA

2015 Ruling 2015-0605901R3 F - Présomption de gain en capital

CRA Tags
55(2), 55(3)(a), 55(3.01)(g), 248(10)
separation of real estate assets beneath new holdco formed by unrelated shareholders
spin-off of real estate beneath new common holdoc of unrelated shareholders
taxation year end changed to immediately before building spin-off
year end selection to avoid Pt. IV circularity

Principales Questions: Selon les étapes proposées de la réorganisation, est-ce que l'alinéa 55(3.01)g) s'appliquera pour exclure des événements décrits aux sous-alinéa 55(3)a)(ii) faisant partie des opérations projetées? Based on the proposed transactions of the reorganization, will paragraph 55(3.01)(g) apply to exclude an event described in subparagraph 55(3)(a)(ii) that is part of the proposed transactions?

Position Adoptée: Oui. Yes.

Raisons: Libéllé de la Loi et positions antérieures. Wording of the Act and previous positions.

Technical Interpretation - External

20 November 2015 External T.I. 2014-0539951E5 - Foreign Currency Denominated Dividends

CRA Tags
89(1), 89(14), 82(1), 261(1), 261(2)
U.S.-dollar dividends are translated on a cash rather than accrual basis
U.S.-dollar dividends translated at spot rate on payment date

Principal Issues: Whether a corporation may designate a U.S. dollar dividend as an eligible dividend such that the dividend will qualify for the enhanced dividend tax credit.

Position: Yes.

Reasons: See analysis below.

Technical Interpretation - Internal

1 March 2016 Internal T.I. 2016-0631181I7 - Specified foreign property - mineral rights

CRA Tags
mineral right is real property which is intangible property

Principal Issues: Whether a mineral right situated outside Canada is a specified foreign property.

Position: Yes, a mineral right situated outside Canada is a specified foreign property pursuant to paragraph (a) of that defined term in subsection 233.3(1). Please note that this view replaces the views expressed in document 2014-052224, which opined that a mineral right was a specified foreign property pursuant to paragraph (b) of that defined term in subsection 233.3(1).

Reasons: A mineral right is generally considered an intangible property.