Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2021-06-02 14 April 2021 External T.I. 2018-0785921E5 F - alinéa 87(1)a) Income Tax Act - Section 87 - Subsection 87(1) - Paragraph 87(1)(a) a statutory amalgamation satisfied s. 87(1)(a) notwithstanding a distribution of cash on the amalgamation
2021-05-26 2021 Ruling 2020-0868661R3 F - Section 84.1 – Leveraged Buyout Income Tax Act - Section 84.1 - Subsection 84.1(1) s. 84.1 did not apply to a leveraged buyout financed by the target
Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) ruling that buyout was an arm’s length transaction
2021-04-14 7 October 2020 APFF Roundtable Q. 15, 2020-0852271C6 F - Corporate attribution rules Income Tax Act - Section 74.4 - Subsection 74.4(2) s. 74.4(2) could apply to a s. 51 estate freeze-style reorganization by two spouses in favour of two discretionary trusts for them and their spouse
7 October 2020 APFF Roundtable Q. 16, 2020-0867071C6 F - APFF Q.16 - Withholding tax on swap payment Income Tax Act - Section 16 - Subsection 16(1) interest is no longer imputed on mismatched cross-border swap payments
Income Tax Act - Section 9 - Capital Gain vs. Profit - Swaps all amounts payable or receivable under a swap are on income account
7 October 2020 APFF Roundtable Q. 17, 2020-0845821C6 F - Part IV tax and trust Income Tax Act - 101-110 - Section 104 - Subsection 104(19) various applications of proposition that an s. 104(19) designation is not effective until the trust’s year end
Income Tax Act - Section 186 - Subsection 186(2) s. 104(13), unlike s. 104(19), can apply contemporaneously with a trust dividend distribution, and ss. 186(2) and 251(1)(b) can apply synergistically
Income Tax Act - 101-110 - Section 104 - Subsection 104(24) under the ordinary meaning of payable, an amount is payable at a time if it is paid then
2021-04-07 27 August 2020 Internal T.I. 2016-0675801I7 F - Prestations de maternité complémentaires Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) Quebec supplementary maternity benefits subsidized childcare centres are taxable, but may not be subject to EI deductions
4 February 2021 External T.I. 2020-0875231E5 F - Revenu d’emploi d’un Indien en travail à domicile Other Legislation/Constitution - Federal - Indian Act - Section 87 an Indian who is now working at a home office on the reserve for COVID reasons has become exempt from the resulting employment earnings
7 October 2020 APFF Roundtable Q. 1, 2020-0852131C6 F - Meaning of reasonable error Income Tax Act - Section 204.1 - Subsection 204.1(4) meaning of "reasonable error"
Income Tax Act - Section 207.06 - Subsection 207.06(1) examples of what CRA has accepted as a “reasonable error” in making an RRSP or TFSA over-contribution
7 October 2020 APFF Roundtable Q. 2, 2020-0852141C6 F - APFF 2020 Roundtable Q2 - Request for Information Income Tax Act - Section 231.1 - Subsection 231.1(1) CRA may request personal bank statements when conducting indirect reviews
7 October 2020 APFF Roundtable Q. 3, 2020-0852151C6 F - Safe income Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) repayment of loan, that had funded a dividend creating a safe income deficit, out of subsequent earnings reduced SIOH
7 October 2020 APFF Roundtable Q. 4, 2020-0852161C6 F - Election Income Tax Act - Section 164 - Subsection 164(6) CRA will not follow the ARQ in allowing a s. 164(6) loss carryback claim on a terminal return before the GRE’s T3 return is assessed
7 October 2020 APFF Roundtable Q. 5, 2020-0852171C6 F - Usufruct of a principal residence Income Tax Act - Section 54 - Principal Residence - Paragraph (c.1) a deemed s. 248(3) testamentary usufruct trust might access the principal residence exemption on the spousal usufructuary’s death or on her surrendering her interest
Income Tax Act - 101-110 - Section 107 - Subsection 107(4) application of s. 107(4) to termination of deemed s. 248(3)(a) spousal trust
Income Tax Act - Section 70 - Subsection 70(6) - Paragraph 70(6)(b) - Subparagraph 70(6)(b)(ii) s. 70(6)(b)(ii) not satisfied where residence of deceased passes to a usufruct for his surviving spouse for a fixed term of years
Income Tax Act - Section 248 - Subsection 248(3) application of s. 248(3) to usufruct created by will and terminated by death of usufructuary or surrender by her, or assignment or death by bare owner
7 October 2020 APFF Roundtable Q. 6, 2020-0852181C6 F - Par. 5(2)(b) of the Employment Insurance Act Other Legislation/Constitution - Federal - Employment Insurance Act - Section 5 - Subsection 5(2) - Paragraph 5(2)(b) CRA now applies a “proportionate attribution approach” in applying the s. 5(2)(b) test of “control … of … voting shares”
7 October 2020 APFF Roundtable Q. 7, 2020-0852191C6 F - Capital dividend and series of shares Income Tax Act - Section 83 - Subsection 83(2) capital dividends can be paid on one series and not the other
Income Tax Act - Section 83 - Subsection 83(2.1) s. 83(2.1) “should be considered” where one of the main purposes of a reorganization is to stream capital dividends
7 October 2020 APFF Roundtable Q. 8, 2020-0852201C6 F - Acheminement du CDC / CDA Streaming Income Tax Act - Section 83 - Subsection 83(2.1) s. 83(2.1) does not generally apply to the streaming of capital dividends to one of the original shareholders
7 October 2020 APFF Roundtable Q. 9, 2020-0852211C6 - Capital dividend Income Tax Act - Section 83 - Subsection 83(2) a s. 83(2) dividend election cannot be made on a formula amount
7 October 2020 APFF Roundtable Q. 10, 2020-0852221C6 F - Interest-free loan to a related foreign company Income Tax Act - Section 247 - New - Subsection 247(2) - Paragraph 247(2)(a) s. 247 would apply to an interest-free loan made by a Canadian individual to a non-arm’s length non-resident corporation
Income Tax Act - Section 17 - Subsection 17(1.1) s. 17 generally does not apply to loans made by individuals, but s. 247 can apply
7 October 2020 APFF Roundtable Q. 11, 2020-0852231C6 F - Designation under subsection 89(14) Income Tax Act - Section 185.1 - Subsection 185.1(2) an eligible dividend designation must state a dollar amount, and GRIP variances are addressable under s. 185.1(2)
Income Tax Act - Section 89 - Subsection 89(14) dividend designation cannot state it is the GRIP, if less
7 October 2020 APFF Roundtable Q. 12, 2020-0852241C6 F - CRA role in the interprovincial arbitration process Income Tax Regulations - Regulation 400 a taxpayer can make representations at the first level of the process for resolving inter-provincial income allocation issues
7 October 2020 APFF Roundtable Q. 13, 2020-0852251C6 F - Small Business Deduction Income Tax Act - Section 125 - Subsection 125(7) - Adjusted Aggregate Investment Income s. 55(2) gain from a share can qualify as a gain from an active asset for AAII purposes
Income Tax Act - Section 125 - Subsection 125(5.1) s. 55(2) gain from active-asset shares do not grind business limit
7 October 2020 APFF Roundtable Q. 14, 2020-0852261C6 F - Section 128 E.T.A. Excise Tax Act - Section 128 - Subsection 128(4) a USA stripped away voting control of a parent over its wholly-owned subs so that it was not closely related to them for ETA purposes
2021-03-31 7 October 2020 APFF Financial Strategies and Instruments Roundtable Q. 1, 2020-0852761C6 F - Taxable capital gain designation
7 October 2020 APFF Financial Strategies and Instruments Roundtable Q. 3, 2020-0848761C6 F - Réorganisations de sociétés étrangères avec dérivation admissibles Income Tax Act - Section 86.1 - Subsection 86.1(2) - Paragraph 86.1(2)(f) CRA is now disclosing the transaction date for eligible distributions
Income Tax Act - Section 220 - Subsection 220(3.1) CRA may consider the delays until its approval of a s. 86.1 spin-off re s. 220(3.5) penalties
7 October 2020 APFF Financial Strategies and Instruments Roundtable Q. 3, 2020-0851991C6 F - Shares Donation to a tax exempt entity & dividend Income Tax Act - Section 129 - Subsection 129(1.2) on an excepted gift of 10% of the shares of a CCPC to a public foundation and the shares’ redemption, s. 129(1.2) could deny the CCPC’s dividend refund
7 October 2020 APFF Financial Strategies and Instruments Roundtable Q. 4, 2020-0851621C6 F - RRSP or RRIF on death – Joint election Income Tax Act - Section 146 - Subsection 146(8.1) a specific bequest of a RRSP proceeds to a surviving spouse cannot be treated as a refund of premiums
Income Tax Act - Section 146.3 - Subsection 146.3(6.1) specific bequest of RRIF is treated as passing through the estate’s hands, so that a s. 146.3(6.1) election is necessary
7 October 2020 APFF Financial Strategies and Instruments Roundtable Q. 5, 2020-0851601C6 F - TFSA Exempt Contribution - Spousal Trust Income Tax Act - Section 207.01 - Subsection 207.01(1) - Exempt Contribution - Paragraph (b) bequest of TFSA to spousal trust which, in turn, distributed the TFSA proceeds per the will to the surviving spouse would qualify as an indirect transfer as a consequence of death

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