Income Tax Severed Letters - 2019-04-24

Technical Interpretation - External

28 March 2019 External T.I. 2018-0770521E5 - Expenses of an office

Unedited CRA Tags
8(1); 8(10); 8(13); 81(2); 81(3); 248(1) “office”, “officer”, “employee”, “employer”, “employment”

Principal Issues: Whether members of a legislative assembly and certain elected municipal officers are permitted to deduct expenses under section 8 of the Income Tax Act?

Position: Yes.

Reasons: See response.

12 February 2019 External T.I. 2018-0778121E5 - Summer camp fees - adults with disabilities

Unedited CRA Tags
118.2(2)(b); 118.2(2)(b.1); 118.2(2)(e); 118.2(2)(l.9); 118.2(2)(l.92).

Principal Issues: Whether fees paid for recreational activities, namely for a particular residential summer camp in respect of an adult with an intellectual disability would qualify as eligible medical expenses for the purpose of the medical expense tax credit.

Position: Generally no.

Reasons: There is no provision in the Act that allows for fees paid for recreational activities, or assistance with such activities, as an eligible medical expense.

9 January 2019 External T.I. 2018-0753891E5 - METC – list of fertility related procedures

Unedited CRA Tags
ITA: 118.2, 118.2(2)(a), (n), and (o), and 118.2(2.2))

Principal Issues: Whether there is a list of fertility-related procedures that are considered to be eligible medical expenses for the purposes of the METC.

Position: No, see response.

Reasons: See response.

Technical Interpretation - Internal

8 June 2018 Internal T.I. 2017-0683021I7 - Assignment of capital interest in a trust

Unedited CRA Tags
85(1), 104(4), 104(13), 104(19), 107(2.1), 107(5)
Summary Under
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(13)
purported drop-down of trust interests to an excluded beneficiary resulted in s. 104(13) inclusions to transferors
Summary Under
Tax Topics - Income Tax Act - 101-110 - Section 107 - Subsection 107(5)
purported drop down of trust interests by non-resident beneficiaries to ULC was ineffective so that s. 107(2.1) applied to subsequent purported asset distribution to ULC
Summary Under
Tax Topics - Income Tax Act - Section 56 - Subsection 56(2)
potential application of s. 56(2) to income distribution to non-qualifying transferee of trust interest
Summary Under
Tax Topics - Income Tax Act - 101-110 - Section 105 - Subsection 105(1)
potential application of s. 105(1) to income distribution to non-qualifying transferee of trust interest
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(25) - Paragraph 248(25)(a)
para. (a) refers to beneficiary in ordinary sense - and does not include assignee

Principal Issues: Whether the trust may designate pursuant to subsection 104(19) its taxable dividend income deemed received in the year to a corporation to which the beneficiaries’ capital interests in the trust had been assigned.

Position: No.

Reasons: In this case the assignee corporation is not a beneficiary of the trust.