Income Tax Severed Letters - 2021-09-01

Technical Interpretation - External

21 June 2021 External T.I. 2019-0815871E5 F - 83(2)b) and cost

Unedited CRA Tags
52(1), 53(1)(e)(ii), 54 definition of adjusted cost base, 83(2)
Summary Under
Tax Topics - Income Tax Act - Section 54 - Adjusted Cost Base
promissory note issued in satisfaction of a capital dividend has full cost
Summary Under
Tax Topics - Income Tax Act - Section 52 - Subsection 52(1)
s. 52(1) is unnecessary to establishing full cost for a note transferred in satisfaction of a capital dividend

Principal Issues: What would be the cost amount of a promissory note received by a Canadian taxpayer from a private corporation for the payment of a capital dividend?

Position: The cost amount would be an amount equal to the principal amount of such promissory note.

Reasons: Based on a textual, contextual and purposive interpretation of the Act the cost amount of a promissory note received by a Canadian taxpayer for the payment of a capital dividend would be equal to the principal amount of such promissory note, which provides for a result

10 June 2021 External T.I. 2017-0696041E5 - Automobile Taxable Benefits

Unedited CRA Tags
6(1)(e); 6(1)(k); 8(1)(h.1)
Summary Under
Tax Topics - Income Tax Act - Section 6 - Subsection 6(2) - Element E
employer covering collision damage to leased car not included in standby charge calculation
Summary Under
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(k)
reasonable per-kilometer charge could be used to infer electric vehicle charging costs
Summary Under
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(h.1)
reasonable per-kilometre charge can be used to determine electric-vehicle cost of travelling

Principal Issues: 1. Whether there is an alternate operating expense benefit calculation for electric automobiles. 2. Whether compensation paid to a lessor by an employer for the total loss of a self-insured leased automobile is included in the standby charge calculation in subsection 6(2).

Position: 1. No. 2. No.

Reasons: 1. The operating expense benefit for an electric vehicle is determined under paragraph 6(1)(k) of the Act, in the same manner as other employer-provided automobiles. 2. A payment of this nature is not an amount payable by the employer to a lessor for the purpose of leasing the automobile and is therefore not included in the standby charge calculation in subsection 6(2) of the Act.

3 May 2021 External T.I. 2019-0831981E5 - CDE and Pre-Production Revenues

Unedited CRA Tags
Paragraphs 66.2(5)(c.2), 66.1(6)(g), (g.3) and (g.4).
Summary Under
Tax Topics - Income Tax Act - Section 66.2 - Subsection 66.2(5) - Canadian development expense - Paragraph (c.2)
pre-production revenues cannot be netted against costs of bringing a new mine into production
Summary Under
Tax Topics - Income Tax Act - Section 66.2 - Subsection 66.2(5) - Canadian development expense - Paragraph (a)
para. (a) does not contemplate netting pre-production revenues

Principal Issues: Are taxpayers entitled to net pre-production revenues against expenses that fall within paragraph (c.2) of the definition of "Canadian development expenses" in subsection 66.2(5)?

Position: No

Reasons: Such netting is not supported by a textual, contextual and purposive analysis of that provision.