Income Tax Severed Letters - 2022-03-30

Ruling

2021 Ruling 2020-0874961R3 - 55(3)(a) Internal Reorganization

Unedited CRA Tags
55(3)(a)
Summary Under
Tax Topics - Income Tax Act - Section 55 - Subsection 55(4)
spinoff of a portion of portfolio of DC (controlled by father) to father-controlled TCs for the children
Summary Under
Tax Topics - Income Tax Act - Section 55 - Subsection 55(3) - Paragraph 55(3)(a)
rep that trust shareholder has not added arm's length beneficiaries, and s. 55(3)(a) accessed through father's voting control

Principal Issues: Whether the proposed reorganization meets the requirements of paragraph 55(3)(a).

Position: Yes.

Reasons: Meets legislative requirements.

Technical Interpretation - External

9 February 2022 External T.I. 2020-0873931E5 - CEE - Economic Assessments

Unedited CRA Tags
Definition of CEE in s. 66.1(6)
Summary Under
Tax Topics - Income Tax Act - Section 66.1 - Subsection 66.1(6) - Canadian exploration expense - Paragraph (f)
CEE must relate to determining the natural (e.g., physical, chemical or mechanical) characteristics of the mineral resource
Words and Phrases
quality

Principal Issues: Are expenses for determining the economic feasibility of a deposit, such as expenses for preparing pre-feasibility or feasibility studies (including expenses for determining the cut-off grade of the deposit), market studies or studies for determining the anticipated long-term price of a mineral) eligible for inclusion in the taxpayer's CEE?

Position: No.

Reasons: Textual, contextual and purposive interpretation of the law.

Technical Interpretation - Internal

9 February 2022 Internal T.I. 2020-0873931I7 - Cover Letter - Mining Expenditure Review Table

Unedited CRA Tags
Subsection 66.1(6) "Canadian exploration expense"
Summary Under
Tax Topics - Income Tax Act - Section 66.1 - Subsection 66.1(6) - Canadian exploration expense - Paragraph (f)
listing of various qualifying (and non-qualifying) items
Summary Under
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Current expense vs. capital acquisition
studies made before a decision to bring a mine into production are currently deductible
Summary Under
Tax Topics - Income Tax Act - Section 66.2 - Subsection 66.2(5) - Canadian development expense - Paragraph (e)
mineral claims and exploration permits included

PRINCIPAL ISSUES: What are the types of expenses that would normally qualify as exploration costs under paragraph (f) of the definition "Canadian exploration expense" in subsection 66.1(6) in the context of a mining project?

POSITION: See attached table.

REASONS: See attached table.

9 February 2022 Internal T.I. 2020-0873932I7 F - Cover Letter - Mining Expenditure Review Table

Unedited CRA Tags
Subsection 66.1(6) "Canadian exploration expense"

PRINCIPAL ISSUES: What are the types of expenses that would normally qualify as exploration costs under paragraph (f) of the definition "Canadian exploration expense" in subsection 66.1(6) in the context of a mining project?

POSITION: See attached table.

REASONS: See attached table.