Income Tax Severed Letters - 2022-11-02

Ruling

2022 Ruling 2022-0925601R3 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 accomplished through the Newco purchaser issuing 8 instalment notes to the estate as a PUC reduction

Principal Issues: 1) Whether section 84.1 will apply to reduce the PUC on the shares of the new corporation received as consideration for the disposition of the shares. 2) Whether subsection 84(2) will apply to the proposed transactions. 3) Whether subsection 245(2) will apply to the proposed transactions.

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

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

Technical Interpretation - External

28 June 2022 External T.I. 2022-0933661E5 - Meaning of Disposition

Unedited CRA Tags
Subsection 248(1): definition of "disposition"
Summary Under
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition
dematerialization of a corporation’s shares would not cause their disposition

Principal Issues: Whether the replacement of a share certificate with a notice of shareholder interest, the replacement of a notice of shareholder interest with a share certificate, or the replacement of a share certificate with another share certificate (or notice of shareholder interest) would result in a disposition for purposes of the Act.

Position: No.

Reasons: See below.

2 June 2022 External T.I. 2022-0935631E5 - Taxation and Reporting of OFCAF Farming Payments

Unedited CRA Tags
9(1), 12(1)(x), 13(7.1), 28(1), 53(2)(k) of the Income Tax Act; 234(1) and 234(2) of the Income Tax Regulations

Principal Issues: 1. Whether payments made to farmers under the Agricultural Climate Solutions - On-Farm Climate Action Fund Program (“OFCAF Program”) are taxable.
2. Whether payments under the OFCAF Program are considered “farm support payments” within the meaning of subsection 234(2) of the Income Tax Regulations (“Regulations”) such that payers are required to file an information return (AGR-1) in respect of such assistance pursuant to subsection 234(1) of the Regulations.

Position: Yes to both questions.

Reasons: 1. The payments to farmers under the OFCAF Program would have to be reported by the recipients either as income, pursuant to section 9 of the Income Tax Act (“Act”), paragraph 12(1)(x) of the Act or as a reduction of expenses or other costs, depending on the circumstances.
2. The payments under the OFCAF Program are considered “farm support payments” within the meaning assigned by subsection 234(2) of the Regulations since they are received in respect of a recipients farming business. Therefore, the payer has a requirement to file an information return (AGR-1) to report these payments.