Income Tax Severed Letters - 2021-06-02

Ruling

2021 Ruling 2020-0852601R3 - Butterfly reorganization

Unedited CRA Tags
12(10.2); 12(10.3); 12(10.4); 55(1); 55(2); 55(3)(b); 55(3.1)(a); 186(2); 186(4), 187.1(1); 191(2)

Principal Issues: Whether the dividends deemed to be received by the distributing corporation and the transferee corporation as part of the Proposed Transactions will be exempted from the application of subsection 55(2) pursuant to paragraph 55(3)(b).

Position: Yes

Reasons: The proposed butterfly reorganisation satisfies all the requirements stated in paragraph 55(3)(b), and is not subject to any of the butterfly exemption denial rules found in subsection 55(3.1).

Technical Interpretation - External

14 April 2021 External T.I. 2018-0785921E5 F - alinéa 87(1)a)

Unedited CRA Tags
87(1)a)
Summary Under
Tax Topics - Income Tax Act - Section 87 - Subsection 87(1) - Paragraph 87(1)(a)
a statutory amalgamation satisfied s. 87(1)(a) notwithstanding a distribution of cash on the amalgamation

Principal Issues: Whether paragraph 87(1)(a) applies in the hypothetical situation described in the technical interpretation 2017-0696821E5.

Position: Generally yes.

Reasons: Prior positions and Envision case.

Technical Interpretation - Internal

25 February 2021 Internal T.I. 2020-0871951I7 - Deduction of annual union dues

Unedited CRA Tags
8(1)(i)(iv), 8(5),153(1), 200(1) of the Income Tax Regulations

Principal Issues: Whether the amount or percentage of annual union dues which relate to activities such as political and support for general social causes or issues and the non-payment of which does not affect a member’s status in the trade union, are deductible under subparagraph 8(1)(i)(iv)

Reasons: Subparagraph 8(1)(i)(iv), Paragraph 8(5)(c)
CRA PUBLICATIONS: RC4120 Employers' Guide - Filing the T4 slip and summary, IT-103R - Dues Paid to a Union or to a Party or Advisory Committee, 2007-0261121E5, 2009-0346331E5 - association dues, 2016-0681161E5 - deductibility of annual membership dues

24 February 2021 Internal T.I. 2020-0870401I7 - Application of Part XII.6 tax re Draft legislation

Unedited CRA Tags
66(12.66), 164(3), 211.91(1), 211.91(2), 211.91(2.1), 66(12.6001), 66(12.731)
Summary Under
Tax Topics - Income Tax Act - Section 211.91 - Subsection 211.91(2.1)
illustration of draft s. 211.91(2.1) reducing Part XII.6 tax from delayed CEE under the look-back rule

Principal Issues: How the proposed measures apply to a hypothetical situation

Position: See Interpretation

Reasons: Application of the new legislative proposals