Income Tax Severed Letters - 2018-10-10


2018 Ruling 2018-0758461R3 F - Deferred Salary Leave Plan (DSLP) -ITR 6801(a)

Unedited CRA Tags
ITR 6801(a)

Principales Questions: Does the proposed plan (a self-funded sabbatical program) qualify as a prescribed plan or arrangement pursuant to paragraph 6801(a) of the Income Tax Regulations?

Position Adoptée: Yes.

Raisons: The legislation and regulations.

Technical Interpretation - External

20 August 2018 External T.I. 2018-0759081E5 - Canada-U.S. Enhanced TIEA

Unedited CRA Tags
s. 264(1)(a), 264(1)(b), paragraphs A of sections II and III of Annex I to the TIEA
account must be reported once it closes over $50,000
a new individual depository account exceeding $50,000 cannot be designated for FATCA exclusion once it falls below $50,000

Principal Issues: Whether a new individual depository account that exceeds the $50,000 threshold provided for in paragraph A of section III of Annex I to the TIEA at the end of a calendar year may be designated under subsection 264(1) of the Act in a subsequent year if the depository account balance drops below $50,000 at the end of that subsequent year.

Position: No.

Reasons: Wording of paragraph A of section III of Annex I to the TIEA.

26 July 2018 External T.I. 2017-0721711E5 - Eligibility: caregiver amount for infirm child

Unedited CRA Tags
118(1)(b.1)(ii); 118(4)(b); 118(4)(b.1). Section 15 of the Interpretation Act.

Principal Issues: Whether shared custody parents can agree to share the Canada caregiver credit for an infirm child under 18 years of age and the eligible dependant credit (EDC) in respect of the same child for the same tax year.

Position: No; the EDC and the Canada caregiver credit for an infirm child under 18 years of age must be claimed by the same parent in respect of the same child.

Reasons: As a result of the general limitation in paragraph 118(4)(b) of the Act, only one parent will ever meet the conditions stated in clause 118(1)(b.1)(ii)(A) of the Act.

27 June 2018 External T.I. 2018-0742881E5 F - Royalties under Canada Petroleum Resources Act

Unedited CRA Tags
9, 18(1)a), 18(1)m) revoked

Principal Issues: Whether royalties paid under the Canada Petroleum Resources Act are considered to be an expense deductible in computing business income.

Position: Yes.

Reasons: Application of the Act.

28 May 2018 External T.I. 2017-0692931E5 - Employee stock options - Bankruptcy

Unedited CRA Tags
7(1), 7(1.1), 50(1), 39(1)
recognizing a s. 50(1)(b) loss on shares does not trigger a s. 7(1.1) benefit

Principal Issues: Whether the deemed disposition rules in subsection 50(1) for shares of bankrupt corporations result in a disposition for purposes of section 7?

Position: No.

Reasons: The preamble to subsection 50(1) restricts its application to the rules for determining capital gains and capital losses in subdivision c. It does not apply for the purposes of the Act as a whole.

Technical Interpretation - Internal

23 August 2018 Internal T.I. 2018-0750591I7 - Application of subsection 207.04(3)

Unedited CRA Tags

Principal Issues: Whether subsection 207.04(3) now applies with respect to RRSP and RRIF investments acquired before March 23, 2011.

Position: Yes. The comments in 2011-042604 are no longer applicable.

Reasons: Subsection 207.04(3) was subsequently amended by S.C. 2013, c. 40, ss. 75(2) with effect from March 23, 2011.