Income Tax Severed Letters - 2019-07-24


2019 Ruling 2018-0779221R3 F - Dissolution d'une association ouvrière

Unedited CRA Tags
8(1)(i); 39(1); 149(1)(k); 248(1) "disposition"
winding-up distribution paid to union members treated as proceeds of disposition rather than as dues reimbursement
winding-up of a labour union gives rise to capital gains to the union members

Principales Questions: Est-ce que les sommes reçues par les membres d'une association ouvrière lors de la distribution des fonds dans le cadre de la liquidation de l'association ouvrière sont imposables?

Position Adoptée: Oui. Ces sommes seront traitées comme une distribution de capital représentant le produit de disposition de leur droit de membre et donneront lieu à un gain en capital.

Raisons: Les statuts de l'association ouvrière prévoient la distribution de son reliquat à ses membres lors de sa liquidation. Dans la présente, il ne s'agit pas d'un remboursement de leurs cotisations syndicales, mais bien d'une disposition de leur droit de membre.

2018 Ruling 2018-0752531R3 - Public corporation election 89(1)(c)(i)

Unedited CRA Tags
84(4.1), 89(1)(c)(i), 87(2)(ii), Reg 4800(2)(a), 4800(3)
Reg. 4800(2)(a)(i) considered to be satisfied when, in fact, none of the shares held by the insiders had ever been listed since the Pubco’s formation by amalgamation
election could be made even though no shares had been listed/qualifed for distribution

Principal Issues: If a public corporation wishes to elect not to be a public corporation and, at the time of the election, its insiders do not own shares of a class that was publicly listed at any time after the corporation last became a public corporation, can it satisfy Regulation 4800(2)(a)?

Position: Yes, in the circumstances considered in this ruling.

Reasons: The circumstances of this corporation are substantially similar to those in respect of which a favorable ruling was given in Document 2015-0577141R3, following the liberal interpretation first taken in Document 2000-0004783.

Technical Interpretation - External

25 June 2019 External T.I. 2017-0732391E5 - Income on TFSA over-contributions

Unedited CRA Tags
207.01(1) definitions of “advantage”, “deliberate over-contribution”, “excess TFSA amount”; 207.02; 207.06(1); 207.061

Principal Issues: Whether income earned on a TFSA over-contribution that is not a “deliberate over-contribution” must be withdrawn from the TFSA?

Position: No, unless the Minister agrees to waive the 1% over-contribution tax.

Reasons: The Act does not impose any other tax consequences on regular TFSA over-contributions beyond the 1% over-contribution tax. However, as a condition for the Minister to grant a waiver of the tax, any associated income or capital gains must be withdrawn and included in income.

Technical Interpretation - Internal

23 April 2019 Internal T.I. 2018-0750821I7 F - Revenu d’emploi d’un Indien

Unedited CRA Tags
81(1)a); Article 87 de la Loi sur les Indiens
employee lease-out servicing activity does not give rise to exempt income if only connection to reserve is employer residence
employee leasing-out generally considered to be a separate business

Principales Questions: Le revenu d’emploi d’un Indien est-il exonéré de l’impôt en vertu de l’alinéa 81(1)a) lorsqu’une partie des activités de la société qui l’emploie sont des activités de louage de services? / Is an Indian’s employment income exempt from income tax under paragraph 81(1)(a) where a part of the employer’s business is from employee leasing activities?

Position Adoptée: Aucune. / None.

Raisons: Question de fait. / Question of fact.