Income Tax Severed Letters - 2022-02-23

Ruling

2021 Ruling 2020-0874931R3 F - Post-mortem Pipeline

Unedited CRA Tags
84(2), 84.1, 245(2)
Summary Under
Tax Topics - Income Tax Act - Section 84 - Subsection 84(2)
pipeline using a joint Newco of children and estate
Summary Under
Tax Topics - Income Tax Act - Section 251.2 - Subsection 251.2(2) - Paragraph 251.2(2)(a)
replacement of an executor resulted in an acquisition of control of subsidiaries

Principales Questions: 1) Whether section 84.1 will apply to deem the heirs to have received a dividend upon the disposition of shares to the new company. 2) Whether section 84.1 will apply to reduce the PUC on the shares of the new company received as consideration for the disposition of the shares. 3) Whether subsection 84(2) will apply to the proposed transactions. 4) Whether subsection 245(2) will apply to the proposed transactions.

Position Adoptée: 1) No. Favorable ruling given. 2) No. Favorable ruling given. 3) No. Favorable ruling given. 4) No. Favorable ruling given.

Raisons: In accordance with the provisions of the Act and our previous positions.

Ministerial Correspondence

15 February 2021 Ministerial Correspondence 2021-0878041M4 F - Donation / Gift

Unedited CRA Tags
3

Principales Questions: L’ARC doit-elle être informée d’une donation d’une somme d’argent au moyen d’un formulaire ou autrement? / Whether CRA need to be notified of a gift of money by form or otherwise of a gift of money?

Position Adoptée: Dans la mesure où une transaction est une donation d’une somme d’argent qui ne peut pas être attribuée à une source productive de revenus, le seul fait de faire cette donation n’a pas à être divulgué à l’ARC au moyen d’un formulaire ou autrement. / To the extent that a transaction is a gift of money that cannot be attributed to a productive source of income, the mere fact of making that gift does not have to be disclosed to the CRA by means of a form or otherwise.

Technical Interpretation - External

5 November 2021 External T.I. 2019-0812631E5 F - Allocation canadienne pour enfants et garde partagée

Unedited CRA Tags
122.6
Summary Under
Tax Topics - Income Tax Act - Section 122.6 - Shared-Custody Parent - Paragraph (b)
Lavrinenko interpretation regarding a shared-custody parent was legislatively overruled retroactively

Principales Questions: Est-il toujours possible de partager l'allocation canadienne pour enfants entre des parents ayant une garde partagée 4jours/3jours? // Is it still possible to share the Canada child benefits between parents who have shared-costody 4 days/3 days?

Position Adoptée: Oui // Yes.

Raisons: Modification rétroactive au 1er juillet 2011 de l'alinéa b) de la définition de "parent ayant une garde partagée" à l'article 122.6 de la Loi de l'impôt sur le revenu - voir L.C., ch.23, art. 21. // Retroactive modification to July 1st 2011 to paragraph b) of the definition of "shared-custody parent" in section 122.6 of the Income Tax Act - see S.C. 2021, c. 23, section 21.

Technical Interpretation - Internal

15 February 2022 Internal T.I. 2020-0870731I7 - CEWS-qualifying rev in respect of a joint venture

Unedited CRA Tags
125.7
Summary Under
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(4) - Paragraph 125.7(4)(c)
para. (d) of qualifying revenue definition effectively indicates that s. 125.7(4)(c) is not available for revenue derived from JV participants who are NAL
Summary Under
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(4) - Paragraph 125.7(4)(d)
election available to servicesco that derived all its revenues from two JV participants who were related to it

Principal Issues: Whether Opco can use the special rules provided under paragraphs 125.7(4)(c) or (d) of the Act to determine its qualifying revenue for a particular qualifying period in a given situation.

Position: Question of fact. If all the conditions are met, yes.

Reasons: Opco would have to ensure, among other things, that all or substantially all of its qualifying revenue is in respect of the joint venture to be eligible for the special rules under paragraph 125.7(4)(c). If all the participants of the joint venture are not dealing at arm’s length with Opco, Opco may be able to use the election under paragraph 125.7(4)(d).