Income Tax Severed Letters - 2019-10-09

Ruling

2018 Ruling 2018-0768161R3 F - Supp Ruling-amendments-advanced income tax ruling

Principales Questions: Whether amendments to an advanced tax ruling relating to a loss consolidation transaction should be accepted by the CRA.

Position Adoptée: Yes.

Raisons: Wording of the Act and previous positions.

2016 Ruling 2016-0671701R3 F - Loss consolidation arrangement

Unedited CRA Tags
20(1)(c); 55(2); 112(1); 245(2): Part IV.1; Part VI.1

Principal Issues: Whether the proposed transactions fall within CRA's positions on loss consolidation arrangement.

Position: Yes.

Reasons: Wording of the Act and previous positions.

Technical Interpretation - External

12 September 2019 External T.I. 2017-0732681E5 - Payment of pension surplus to US resident beneficiary

Unedited CRA Tags
212(1)(h); definition “periodic pension payment” in section 5 of the ITCIA; Article XVIII of Canada-U.S. Tax Convention
Summary Under
Tax Topics - Treaties - Income Tax Conventions - Article 18
Reg. 8503(26) minimum amount payments or commutation payments are lump sums ineligible for reduction under Canada-U.S. Treaty
Summary Under
Tax Topics - Other Legislation/Constitution - Federal - Income Tax Conventions Interpretation Act - Section 5 - Periodic Pension Payment
winding-up IPP payment or commutation or minimum amount payments are not periodic

Principal Issues: Is a payment to a U.S. resident beneficiary of the funds remaining in an Individual Pension Plan on plan wind-up considered to be a periodic pension payment for the purpose of the reduced withholding tax rate in subparagraph 2(b) of Article XVIII of the Canada-U.S. Tax Convention?

Position: No.

Reasons: The payment is a lump sum distribution of surplus.

Technical Interpretation - Internal

8 June 2018 Internal T.I. 2018-0744881I7 - Regulation 403 – allocation of income

Unedited CRA Tags
138, 248 (definition of insurance corporation), Regulations 400 and 403
Summary Under
Tax Topics - Income Tax Regulations - Regulation 403 - Subsection 403(3)
PE for 403(3) purposes includes any PE of any partnership of which insurer is member
Summary Under
Tax Topics - Income Tax Regulations - Regulation 400 - Subsection 400(1)
a partner is attributed each PE of a partnership for Reg. 400(1) purposes

Principal Issues: For the purposes of taxable income allocation under Regulation 403, should the taxpayer ignore the PEs of the partnerships in which the taxpayer is a partner?

Position: No.

Reasons: Any PE of the partnerships of which the taxpayer is a partner is a PE of the taxpayer. In addition, Regulation 403 does not restrict corporations to only use PEs related to the insurance business. Since the taxpayer is a member of a partnership that has a PE in XXXXXXXXXX, the taxpayer must make an allocation of taxable income to XXXXXXXXXX in accordance with Regulation 403.