Income Tax Severed Letters - 2018-08-29


2018 Ruling 2018-0749691R3 - Structured settlement

Unedited CRA Tags

Principal Issues: Will the payments to be received pursuant to the structured settlement be taxable in the claimant's hands in the circumstances described?

Position: No.

Reasons: The terms of the structured settlement are consistent with the CRA's position as set out in paragraph 5 of IT-365R2.

2017 Ruling 2017-0720591R3 - Re-org of a stapled commercial trust structure

Unedited CRA Tags
107.4(1); 107.4(3) and 245(2)
double transfer from stapled MFT to REIT to new stapled MFT

Principal Issues: 1) Whether each of the two dispositions which are part of the re-organization of the structure to replace the existing Finance Trust with a new trust will be a "qualifying disposition" as described in subsection 107.4(1) of the Act? 2) Whether GAAR will apply to re-determine the tax consequences of those two dispositions?

Position: 1) Yes. 2) No.

Reasons: 1) All of the requirements in 107.4(1) are met. 2) The use of such qualifying dispositions to re-organize this structure is analogous to rulings given on many occasions and the motivation for the change is for US tax purposes.

Technical Interpretation - External

30 July 2018 External T.I. 2018-0761111E5 - Treatment of investment income

Unedited CRA Tags
9, 12(1)(i), 20(1)(p)

Principal Issues: Whether interest income received and reported in income in a particular tax year can be reversed.

Position: No, however, paragraph 20(1)(p) of the Act may apply.

Reasons: See below.

10 July 2018 External T.I. 2018-0753021E5 - Treatment of losses

Unedited CRA Tags
9, 12(1)(i), 20(1)(p), 38(c), 39(1)(b), 39(1)(c), 40(2)(g)(ii), 50(1), 111(1)(a), 111(1)(b), 54 capital property, 111(8) non-capital loss, 125(7) Canadian-controlled private corporation.

Principal Issues: Tax implications of losses incurred as a result of a fraudulent investment scheme.

Position: Various implications discussed.

Reasons: See below.