Income Tax Severed Letters - 2023-05-17

Technical Interpretation - External

6 March 2023 External T.I. 2023-0960671E5 - Carriage house & multigenerational home renos

Unedited CRA Tags
The definition of "qualifying renovation" and "secondary unit" in subsections 122.92(1).

Principal Issues: Whether the multigeneration home renovation tax credit (MGHRTC) can be used toward the new construction of an accessory dwelling unit such as a carriage house or laneway house.

Position: Yes, provided that all the conditions to qualify for the MGHRTC are met, including local requirements and bylaws relating to the construction of an accessory dwelling unit.

Reasons: Given the spirit and intent of the MGHRTC provisions, we have given paragraph (b) of the definition of “qualifying renovation” a broad interpretation as if the phrase “[a secondary unit] within the dwelling” were read “within the eligible dwelling.”

6 March 2023 External T.I. 2023-0960631E5 - MHRTC – Pre renovation

Unedited CRA Tags
ITA: Section 122.92, Subsections 122.92(1), (3) and (4).

Principal Issues: Whether a senior must be living with their daughter in the same dwelling before the renovations begin, in order for the amounts paid to qualify for the Multigenerational Home Renovation Tax Credit (MHRTC).

Position: No, there is no requirement is section 122.92 of the Act.

Reasons: Under subsection 122.92(1), a qualifying renovation is one that creates a secondary unit in the dwelling to permit a qualifying individual to live with a qualifying relation. In addition, in order to be considered an eligible dwelling, the housing unit must be ordinarily inhabited, or intended to be ordinarily inhabited, by the qualifying individual and a qualifying relation of the qualifying individual within 12 months at the end of the renovation period. Therefore, the provisions of the MHRTC do not require a qualifying individual to ordinarily reside with a qualifying relation of the qualifying individual in the eligible dwelling, prior to the start of the qualifying renovation in the eligible dwelling, in order for the qualifying expenditures to qualify for the MHRTC.

15 February 2023 External T.I. 2022-0953991E5 F - Paragraph 84.1(2)(e) and amalgamation

Unedited CRA Tags
84.1(2)(e), 84.1(2.3)
Summary Under
Tax Topics - Income Tax Act - Section 84.1 - Subsection 84.1(2) - Paragraph 84.1(2)(e)
loss of s. 84.1(2)(e) safe harbour on an amalgamation of the purchaser and subject corporation

Principales Questions: Whether the amalgamation of the purchaser corporation and the subject corporation within the 60-month period after the transfer of the shares of the capital stock of the subject corporation to the purchaser corporation would cause the deeming rule at paragraph 84.1(2)(e) not to apply.

Position Adoptée: Yes.

Raisons: According to the law. Arguably, the outcome may raise concerns in terms of tax policy and the matter was referred to the Department of Finance for consideration.