Income Tax Severed Letters - 2025-12-24

Technical Interpretation - External

27 August 2025 External T.I. 2025-1057461E5 - Trust Reporting, 149(5) Deemed Trust, 150(1.2)(e)

Principal Issues: 1) Does paragraph 150(1.2)(e) apply to a trust which is deemed to be created pursuant to subsection 149(5)? 2) Who are the trustee, settlor and beneficiaries under a trust deemed to be created pursuant to subsection 149(5)?

Position: 1) No. 2) subsection 149(5) does not deem the trust to have a settlor or beneficiaries under the trust. Trustee(s) are deemed pursuant to paragraphs 149(5)(b) and (c).

Reasons: 1) A trust deemed to be created pursuant to subsection 149(5) is not a club, society, or association described in paragraph 149(1)(l). 2) Words of the Act.

6 September 2024 External T.I. 2019-0796831E5 - Part XIII Tax on Dividend Paid to a Partnership

Unedited CRA Tags
212(2); 212(13.1)(b); 256(6.1); Article X of the Canada-US Tax Treaty; Article 10 of the Canada-Germany Tax Treaty

Principal Issues: Whether a dividend paid by a Canadian corporation to a partnership with a 20% US resident corporate partner and an 80% German resident corporate partner would be eligible for the reduced 5% Part XIII withholding tax under the applicable tax treaties.

Position: Yes, The withholding tax rate would be 5% pursuant to both the Canada-US Tax Treaty and the Canada-Germany Tax Treaty.

Reasons: The conditions for the lower 5% withholding tax in Article X(2)(a) of the Canada-US Tax Treaty would be met as the US corporate partner would be considered to own 20% of the shares of the Canadian corporation. The conditions for the lower 5% withholding tax in Article 10(2)(a) of the Canada-Germany Tax Treaty would be met as the German corporate partner would be considered to control at least 10% of the voting power of the shares of the Canadian corporation.

14 July 2023 External T.I. 2022-0948061E5 - Beneficial ownership and principal residence

Unedited CRA Tags
40(2)(b); 54; “disposition” in subsection 248(1)

Principal Issues: Whether a taxpayer was the beneficial owner of a property held jointly with the taxpayer's children.

Position: Question of fact, but the taxpayer is likely the beneficial owner of the property.

Reasons: The attributes of "beneficial ownership" are evidenced by the conduct of the parties and supporting documents.

Technical Interpretation - Internal

14 December 2023 Internal T.I. 2023-0966971I7 - Subparagraph 110(1)(f)(v) deduction

Unedited CRA Tags
110(1)(f)(v)

Principal Issues: Whether a deduction under paragraph 110(1)(f)(v) would be available to a Canadian Forces member in various scenarios.

Position: See analysis.

Reasons: The law.

28 June 2023 Internal T.I. 2022-0951401I7 - Subsection 156.1(1) "net tax owing"

Unedited CRA Tags
156.1(1), (1.2), (1.3), 248(1) "taxes payable", "specified future tax consequences"

Principal Issues: Whether the CRB repayment or EI repayment is to be considered when determining the amount of net tax owing defined in subsection 156.1(1)?

Position: No.

Reasons: Based on our review of the Act, the Benefits Act and the EI Act, a CRB Repayment or EI Repayment are not considered a tax payable or a tax withheld under the Act. Therefore, the CRB Repayment and EI Repayment are not to be considered when determining a value for “net tax owing” as defined under subsection 156.1(1) of the Act.