Income Tax Severed Letters - 2021-01-06

Technical Interpretation - External

23 December 2020 External T.I. 2020-0874621E5 - Administration of Draft Legislation-FTS Extension

Unedited CRA Tags
Part XII.6, section 211.91, subsections 66(12.6) and (12.66)
taxpayers can delay flow-through share reporting under the look-back rule in reliance on the CODID-related proposed amendments
filings can be made relying on draft COVID extensions

Principal Issues: Whether the CRA will administer the ITA on the basis of the proposed amendments to the ITA to extend the timelines for corporations that have issued flow-through shares to incur the CEE or CDE renounced under those flow-through shares.

Position: Yes.

Reasons: Consistent with prior published positions.

16 October 2020 External T.I. 2020-0865071E5 - Subsection 164(6) - time limit

Unedited CRA Tags
164(6)
no relief where there are COVID-related delays in meeting the deadline of realizing a loss for s. 164(6) carryback within an estate’s first taxation year

Principal Issues: Will the CRA allow more time for the application of subsection 164(6) for loss carrybacks by an estate?

Position: The CRA is unable to extend the disposition time limit.

Reasons: See below.

Conference

16 December 2019 Roundtable, 2019-0828571C6 - Disposition

Unedited CRA Tags
248(1) "disposition"
amending a foreign-law debt to transition to RFRs is a disposition only if there is discharge and substitution under that law

Principal Issues: Whether a change in benchmark rate from an Interbank Offering Rate (IBOR) to a Risk-Free-Rate (RFR) in a financial instrument could result in a disposition under the Income Tax Act.

Position: The law. Factual determination. Generally, such change, in and of itself, would not result in a disposition. Whether a disposition occurs can be determined only after a review of the facts and circumstances and based on the law that governs a financial instrument.

Reasons: Whether changes to the terms of a financial product result in a disposition depends on the facts and circumstances and the law that governs the financial product.