Income Tax Severed Letters - 2016-04-06

Ruling

2015 Ruling 2014-0532201R3 - Corporate reorganization

CRA Tags
38(a.1), 89(1), 74.4(2), 74.5(5), 85(1), 87(4), 88(1)(a), 88(1)(b), 89(1) "capital dividend account", 110.1, 245(2), 251(1), 251(6)
donation of pubco shares to foundation and immediate cash sale to affiliate
cancellation of upstream shareholding on s. 88(1) wind-up
donation and sale-back of public company shares

Principal Issues: (1) Whether the provisions of subsection 85(1) will apply to the transfers of property to be undertaken under the Proposed Transactions; (2) Whether subsection 74.4(2) will apply to the individual transferors having transferred property to the XXXXXXXXXX; (3) Whether subsection 84(3) will apply to the cancellation of the Newco XXXXXXXXXX Non-Voting Preference Shares in the course of the Wind-Up; (4) Whether the GAAR will apply to the Donation to deny the application of paragraph 38(a.1) and limit the inclusion to Holdco 3’s CDA.

Position: (1) Yes (2) No (3) No (4) No

Reasons: (1) The transferred property in each of the proposed transactions, which qualifies as an eligible property as that term is defined in paragraph 85(1.1)(a), was transferred to a taxable Canadian corporation; (2) None of the proposed transfers of property reduce the income of the individual transferor or benefit a designated person in respect of the individual; (3) No amount has been paid by Newco to Amalco XXXXXXXXXX to cancel the Newco XXXXXXXXXX Non-Voting Preference Shares.

2015 Ruling 2015-0582101R3 - loss utilization

CRA Tags
20(1)(c), 55(2), 112(1), 245
non-triangular partly-completed loss shift from lossco parent to profitco sub

Principal Issues: Whether a loss utilization transaction is acceptable.

Position: Yes.

Reasons: Long-standing administrative position.

2015 Ruling 2015-0604071R3 - Loss Consolidation Arrangement

CRA Tags
20(1)(c), 111(5)
loss shift entailing Profitco subscribing for prefs of its Lossco parent, with dividends paid pursuant to support agreement/prefs redeemed wih note

Principal Issues: Whether the LCA among the related and affiliated group is acceptable

Position: Yes

Reasons: The transactions fall within CRA's positions on LCAs

2015 Ruling 2015-0604851R3 - 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 previous positions.

2015 Ruling 2015-0606721R3 - Post Mortem Hybrid/Partial 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 previous positions.