Income Tax Severed Letters - 2016-09-07

Ruling

2015 Ruling 2014-0552871R3 - Split-Up Butterfly

CRA Tags
55(2), 55(3)(b), 55(3.1)
post-butterfly sale of distributed shares by TC1 to TC2/disproportionate split of CDA/assumption of prepaid rent (for which a 20(24) election) treated as boot
post-butterfly sale of distributed shares by one TC to the other
deferred revenue treated as boot

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

Position: Yes

Reasons: See below.

Technical Interpretation - External

13 July 2016 External T.I. 2013-0478961E5 F - Interest in a family farm or fishing partnership

CRA Tags
110.6
qualification of partnership units as interests in a family farm or fishing partnership can be based on a previous period of farming use of its assets

Principal Issues: 1. The sole asset of a partnership was land that was used principally by a corporation, a share of the capital stock of which was a share of the capital stock of a family farm or fishing corporation on the individual. For the purposes of qualifying an interest in a partnership as an interest in a family farm or fishing partnership, whether the land should be used by the corporation at the time of the disposition of the interest in a partnership.
2. Whether a share of the capital stock of the corporation that used the land (owned by the partnership) in its farming business should comply with the conditions provided in the definition of a share of the capital stock of a family farm or fishing corporation during 48 months in order to comply with the 24-month period of use by the corporation test in paragraph (a) of the definition of interest in a family farm or fishing partnership.
3. Whether the 90% test in the definition of share of the capital stock of a family farm or fishing corporation should be complied with during the entire period that the land has to be used by the corporation to satisfy paragraph (b) of the definition of interest in a family farm or fishing partnership.

Position: 1. No.
2. No. It would be only during a 24-month period.
3. No. Just at the end of the period.

Reasons: 1. Wording of the Act.
2. Textual, contextual and purposive approach in the interpretation of the two definitions.
3. Textual, contextual and purposive approach in the interpretation of the two definitions.

13 July 2016 External T.I. 2013-0513701E5 F - Montant pour enfant

CRA Tags
118(1)b), 118(1)b.1), 118(5), 252
child accepted as ordinarily residing with parent with joint custody

Principales Questions: Avant 2015, est-ce que l’alinéa 118(1)b.1) s’appliquait à Monsieur A et Madame B lorsqu’ils étaient des ex-conjoints vivant dans des établissements domestiques autonomes distincts en raison de la rupture de leur union, qu’ils avaient la garde partagée égale de leur enfant, que Monsieur A payait une pension alimentaire relativement à son enfant et que seulement Madame B avait un nouveau conjoint ?
Before 2015, whether paragraph 118(1)(b.1) applied to Mr. A and Ms. B in a situation where they were ex-spouses living in separate self-contained domestic establishments by reason of the breakdown of the marriage or common-law partnership, they had equal shared custody of their child, Mr. A paid a support amount in respect of his child and only Ms. B had a new spouse?

Position Adoptée: Il n'y aurait que le sous-alinéa 118(1)b.1)(i) qui s’appliquerait à Madame B. Only subparagraph 118(1)(b.1)(i) would apply to Ms. B.

Raisons: Dans une telle situation, l’Agence du revenu du Canada accepterait, pour les fins de l'alinéa 118(1)b.1) et ce, par position administrative, que l’enfant soit considéré résider habituellement, tout au long de l’année, avec le conjoint qui ne paie pas la pension alimentaire et réside avec un nouveau conjoint.
In such a situation, Canada Revenue Agency would accept to take an administrative position for the purpose of paragraph 118(1)(b.1) to the effect that the child would be considered to ordinarily reside throughout the taxation year, with the spouse who did not pay the support amount and resided with her new spouse.

7 June 2016 External T.I. 2014-0532451E5 F - Crédit pour la création d’emplois pour apprentis

CRA Tags
127(9)
apprenticeship contracts include collective agreements/24-month period runs from issuance of apprentice competency certificate

Principal Issues: Précisions sur la signification de l’exigence «au cours des vingt-quatre premiers mois de son contrat d’apprenti lequel contrat est enregistré auprès de la province» à la définition d’«apprenti admissible» au paragraphe 127(9). / Clarification of the meaning of the requirement "during the first twenty-four months of the individual's apprenticeship contract registered with the province" of the definition "eligible apprentice" in subsection 127(9).

Position: Au Québec, le début de la période des vingt-quatre premiers mois du contrat d’apprenti devrait être la date de délivrance du premier certificat de compétence apprenti. / In Quebec, the beginning of the period of the first twenty-four months of the apprenticeship contract should be the date on which the first competency certificate-apprentice is issued.

Reasons: Le particulier commence le programme d’apprentissage au moment où le contrat d’apprenti entre lui et son employeur commence. / The individual begins the apprenticeship program at the time the apprenticeship contract between him/her and his/her employer begins.

Technical Interpretation - Internal

24 June 2016 Internal T.I. 2014-0555611I7 F - Allocation raisonnable

CRA Tags
6(1)(b)(vii.1), 6(1)b)(x), 8(1)(h.1)
kilometer-based minimum allowance must be intended to compensate for actual expenses

Principal Issues: La position énoncée dans le document 2007-0228521I7 a-t-elle changée suite à la publication du document 2012-0460481E5? Was the position stated in document 2007-0228521I7 modified by the publication of the document 2012-0460481E5?

Position: Non /No

Reasons: Question de fait/ Question of fact