Income Tax Severed Letters - 2025-04-23

Technical Interpretation - External

28 March 2025 External T.I. 2016-0662951E5 F - Alinéa b) de la définition d’action admissible de

Unedited CRA Tags
110.6(1)b), 110.6(14)c(ii), 251(2)a), 251(6)a)
Summary Under
Tax Topics - Income Tax Act - Section 110.6 - Subsection 110.6(1) - Qualified Small Business Corporation Share - Paragraph (b)
settling QSBCS shares on a personal trust with related beneficiaries before a sale of those shares 6 months’ later would not cause QSBCS status to be lost
Summary Under
Tax Topics - Income Tax Act - Section 110.6 - Subsection 110.6(14) - Paragraph 110.6(14)(f)
settling QSBCS shares on a personal trust whose beneficiaries were related as required by s. 110.6(14)(c)(ii) permitted a sale thereafter without loss of QSBCS status

Principales Questions: Est-ce que le seul fait qu’une fiducie personnelle n’ait pas été constituée depuis 24 mois au moment où elle dispose des actions du capital-actions d’une société empêche ces actions de se qualifier à titre d’AAPE au sens du paragraphe 110.6(1)? / Whether the mere fact that a personal trust has not been in existence for 24 months at the time it disposes of shares of the capital stock of a corporation prevents those shares from qualifying as a QSBCS within the meaning of subsection 110.6(1).

Position Adoptée: Non, si les actions remplissent par ailleurs toutes les conditions pour se qualifier à titre d’AAPE. / No, if the shares otherwise meet all the conditions for qualifying as a QSBCS.

Raisons: Libellé de la Loi / Wording of the Act.

12 March 2025 External T.I. 2025-1053231E5 - Effects of a Power of Attorney on TOSI

Unedited CRA Tags
120.4(1) "excluded shares"
Summary Under
Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (b)
granting of power of attorney over shares would not change the shares’ ownership
Summary Under
Tax Topics - General Concepts - Ownership
CRA responded: Although Father may exercise the rights attached to the shares, it is our understanding that the POA would not involve a transfer of the legal or beneficial ownership of such shares to Father. Therefore, as a matter of law, and for the purposes of paragraph (b) of the definition of “excluded shares” in subsection 120.4(1), Adult Child would own the shares. granting power of attorney over shares did not divest the grantor of their ownership

Principal Issues: Whether a Power of Attorney would affect the ownership of shares with respect to the definition of "excluded shares" in subsection 120.4(1).

Position: A Power of Attorney acts as an agent for the owner of the shares, but does not change who owns them or who is beneficially interested.

7 February 2025 External T.I. 2024-1034651E5 - Indian Act Tax Exemption - Retroactive salary

Unedited CRA Tags
ITA para. 81(1)(a); IA s. 87
  • Principal Issues: Whether a lump-sum payment for retroactive salary increases received is exempt under section 87 of the Indian Act and paragraph 81(1)(a) of the Act.

Position: It depends. Where the retroactive payment relates to previous employment income that was tax exempt under paragraph 81(1)(a) of the Act and section 87 of the Indian Act, the portion of the retroactive payment that relates to that employment income would similarly be exempt from income tax.

Reasons: For Section 87 Exemption purposes, a lump-sum retroactive salary payment, attributable to past work, should be taxed in the same manner as income earned during that past work period, irrespective of current employment situation.

4 January 2022 External T.I. 2016-0644861E5 F - Travail de nature temporaire

Unedited CRA Tags
6(1)b), 6(6).
Summary Under
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) - Subparagraph 6(1)(a)(i)
the "duties … of a temporary nature" condition is tested on a site-by-site basis
Words and Phrases
duties of a temporary nature

Principales Questions: Est-ce que la condition de « travail de nature temporaire » prévue au sous-alinéa 6(6)a)(i) est remplie dans certaines situations? / Whether the requirement "work of a temporary nature" in subparagraph 6(6)(a)(i) is satisfied in particulars situations?

Position Adoptée: Commentaires généraux. / Generals comments.

Raisons: Question de faits. / Question of facts.