Income Tax Severed Letters - 2022-05-25

Technical Interpretation - External

28 March 2022 External T.I. 2021-0909731E5 - Hong Kong Mandatory Provident Fund

Unedited CRA Tags
6(1)(g); 248(1) "employee benefit plan", "salary deferral arrangement"

Principal Issues: In a described situation, what would be the tax treatment of contributions to and withdrawals from a registered scheme (the "Plan") established under Hong Kong’s Mandatory Provident Fund system?

Position: The tax treatment would be determined on the basis that the Plan is an EBP, except to the extent (if any) that the RCA rules apply to the Plan.

Reasons: The legislation.

22 December 2020 External T.I. 2020-0869451E5 - CEWS 81(1)(c) and treaty exempt entities

Unedited CRA Tags
125.7(1), 81(1)(c), 250(6)

Principal Issues: Whether an international shipping corporation who carries on business in Canada, who is deemed by subsection 250(6) to not be a resident in Canada, and a part or all of whose income is not included in income under Part I by way of the operation of paragraph 81(1)(c) may qualify as an “eligible entity” under subsection 125.7(1).

Position: Such an international shipping corporation may qualify as an “eligible entity”

Reasons: Such an international shipping corporation is not a corporation that is exempt from tax under Part I as contemplated in paragraph (a) of the definition of “eligible entity” under subsection 125.7(1).

Technical Interpretation - Internal

9 May 2022 Internal T.I. 2018-0790251I7 - 45(2) election and beneficial ownership

Unedited CRA Tags
45(1); 45(2); 74.1(1); 74.2(1)
Summary Under
Tax Topics - Income Tax Act - Section 45 - Subsection 45(2)
spouse could be a beneficial co-owner of the converted home (even though her husband funded its purchase) so that both must elect
Words and Phrases
beneficial ownership
Summary Under
Tax Topics - General Concepts - Ownership
a spouse could be the beneficial owner even though she did not contribute to the property's purchase / owner means beneficial owner

Principal Issues: Question 1: Whether both spouses are required to file a subsection 45(2) election in a scenario where only one spouse has beneficial ownership of the property.
Question 2: Does filing a subsection 45(2) election for a property require the taxpayer to designate the property as their principal residence?

Position: 1) No, however, additional factors should be considered in determining whether or not the spouse holds beneficial ownership in the property. 2) No.

Reasons: The law.