Income Tax Severed Letters - 2018-04-25

Ruling

2018 Ruling 2017-0720901R3 - Use of a Surety Bond by RCA

Unedited CRA Tags
Definition of RCA in subsection 248(1); subsection 207.5(1); paragraph 20(1)(r); paragraph 153(1)(p)
Summary Under
Tax Topics - Income Tax Act - Section 207.5 - Subsection 207.5(1) - Refundable Tax - Paragraph (a)
use of surety bonds rather than LCs to secure SERP benefits
Summary Under
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(r)
contributions (including re Pt XI.3 tax) for funding surety bond fees, currently deductible

Principal Issues: Whether an RCA can secure its obligations with a surety bond.

Position: Yes.

Reasons: Substantially the same considerations apply as for an RCA securing its obligations with a letter of credit.

Technical Interpretation - External

23 March 2018 External T.I. 2018-0739741E5 - Disposition of Freehold Mineral Rights in Canada

Unedited CRA Tags
Sections 66.2, 66.4, Subsections 66(5), 70(5.2), 59(3.2) and Subparagraph 39(1)(a)(ii)
Summary Under
Tax Topics - Income Tax Act - Section 66.2 - Subsection 66.2(1)
example of computation where individual inherited and disposed of CRP

Principal Issues: What are the income tax consequences to a taxpayer of (i) an inheritance of freehold mineral rights in Canada, and (ii) a disposition of freehold mineral rights in Canada?

Position: (i) If the property is a Canadian resource property that is acquired by the taxpayer as a consequence of the death of another taxpayer, the taxpayer is deemed to have acquired the property at cost equal to its fair market at the time of the death and such cost would be added to the CCOGPE of the taxpayer if it is an oil and gas property or the CCDE of the taxpayer if it is a mineral property. (ii)Proceeds of disposition receivable by the taxpayer (less any selling expenses) on a disposition of a Canadian resource property will reduce the taxpayer's CCOGPE if the property is an oil and gas property or CCDE if the property is a mineral property. If the taxpayer's CCOGPE is negative at the end of the taxation year, the taxpayer's CCDE will be reduced by the negative amount. If the taxpayer's CCDE is negative at the end of the taxation year, the negative amount will be included in computing the income of the taxpayer.

Reasons: The provisions of the Income Tax Act (Canada).

Conference

5 December 2017 Roundtable, 2017-0734831C6 - 2017 TEI – Question B5

Summary Under
Tax Topics - Income Tax Act - Section 152 - Subsection 152(1)
incomplete applications rejected/meeting within 4 weeks/90 business-day service standard made more flexible

Principal Issues: Update on Rulings Consultations

Position: See response below

Reasons: See response below

5 December 2017 Roundtable, 2017-0734841C6 - 2017 TEI – Question E3

Unedited CRA Tags
87(8.4), (8.5), 116

Principal Issues: Joint election under proposed paragraph 87(8.4)(e) and its interaction with section 116.

Position: See responses below.

Reasons: Administrative position.

5 December 2017 Roundtable, 2017-0723491C6 - 2017 TEI – Question B6 - 55(2) guidance

Unedited CRA Tags
55(2)

Principal Issues: Rulings issued under 55(2)

Position: See document

Reasons: See document

Technical Interpretation - Internal

12 June 2017 Internal T.I. 2016-0679291I7 F - Régime d’assurance décès et mutilation accidentels

Unedited CRA Tags
6(1)e.1)
Summary Under
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(e.1)
the payment of group accident plan premiums by an employer for its benefit gave rise to taxable benefits
Words and Phrases
group plan

Principales Questions: Quel est le traitement fiscal à accorder aux primes payées par un employeur pour un régime d’assurance décès et mutilation accidentels en faveur de certains de ses employés ?
What is the tax treatment of premiums paid by an employer for an accidental death and dismemberment insurance plan in favor of some of its employees?

Position Adoptée: Avantage imposable depuis 2013 en vertu de 6(1)e.1). Taxable benefit since 2013 under 6(1)(e.1).

Raisons: L’alinéa 6(1)e.1) prévoit essentiellement qu’un employé doit, depuis 2013, inclure dans le calcul du son revenu tiré d’une charge ou d’emploi le total des sommes que son employeur a versées à son égard au cours de l’année à un régime d’assurance collective contre la maladie ou les accidents. Subsection 6(1)(e.1) essentially provides that an employee must, since 2013, include in computing his or her income from an office or employment the total of all amounts contributed in his or her respect by his or her employer in the year to a group sickness or accident insurance plan.