Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2023-02-22 17 November 2022 External T.I. 2021-0919001E5 F - Eligible Dividends and Non-Capital Loss Carry-Back Income Tax Act - Section 152 - Subsection 152(6) - Paragraph 152(6)(c) s. 152(6)(c) permitted amending carryback request, if made within s. 152(6)(c) deadline and normal reassessment period, and implicitly authorized consequential Part III.1 reassessment
Income Tax Act - Section 152 - Subsection 152(3) s. 152(3) (and, consequentially, s. 185.2(2)) requires filing of amended return to reflect missing excessive dividend
Income Tax Act - Section 185.1 - Subsection 185.1(2) s. 185.1(2) election can be made before the incremental Part III.1 assessment that is being avoided
2022 Ruling 2022-0933261R3 F - Subsection 104(4) and pipeline transaction Income Tax Act - Section 84 - Subsection 84(2) pipeline transaction for a trust realizing a s. 104(4)(b) gain and using a non-controlled Newco
2023-02-08 2021 Ruling 2021-0887301R3 F - Post-mortem pipeline transaction Income Tax Act - Section 84 - Subsection 84(2) double pipeline entailing the application of s. 84.1 and s. 88(1)(d) bump
Income Tax Act - Section 84.1 - Subsection 84.1(2) - Paragraph 84.1(2)(a.1) - Subparagraph 84.1(2)(a.1)(ii) application of ss. 84.1(1) and (2)(a.1)(ii) to transfer of shares by spousal trust that had received such shares from the testator who had stepped such shares up under s. 110.6(2.1)
Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(d.3) application of s. 88(1)(d.3) to pipeline involving shares that had been stepped up under s. 104(4)
2021 Ruling 2021-0904311R3 F - Butterfly Reorganization Income Tax Act - Section 55 - Subsection 55(1) - Distribution butterfly transaction for a farming corp (DC) of two brothers coupled with an immediate gift of shares of DC and TC to their respective sons under s. 73(4.1)
Income Tax Act - Section 191 - Subsection 191(5) specified amount included in shares issued on butterfly distribution
Income Tax Act - Section 186 - Subsection 186(1) - Paragraph 186(1)(b) circularity avoided through intervening taxation year end of transferee corp
2023-01-25 2022 Ruling 2020-0858451R3 F - Trust to trust transfer Income Tax Act - Section 108 - Subsection 108(1) - Trust - Paragraph (g) deemed disposition under s. 104(4) avoided through irrevocable vesting of interests in successor trust
Income Tax Act - Section 248 - Subsection 248(1) - Disposition - Paragraph (f) no disposition on transfer of assets of Trust 1 to Trust 2 with essentially the same terms other than a clause facilitating irrevocable-vesting designations
7 October 2022 APFF Financial Strategies and Instruments Roundtable Q. 1, 2022-0936241C6 F - T1135 and situs of cryptocurrencies Income Tax Act - Section 233.3 - Subsection 233.3(1) - Specified Foreign Property - Paragraph (a) expanded crypto disclosure may be required
7 October 2022 APFF Financial Strategies and Instruments Roundtable Q. 2, 2022-0936281C6 F - police d'assurance-vie & avantage Income Tax Act - Section 246 - Subsection 246(1) taxable benefit where 2 Holdcos pay premiums on life insurance policies of which their jointly-owned sub is beneficiary unless s. 246(2) applies
Income Tax Act - Section 9 - Expense Reimbursement premiums paid by parent on a sub’s life insurance policies are non-deductible even if reimbursed on income account
Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Financing Expenditures premiums paid by Holdcos on policies of which their jointly-owned company (Opco) is the beneficiary are non-deductible capital expenditures even if reimbursed by the Opcos
7 October 2022 APFF Financial Strategies and Instruments Roundtable Q. 3, 2022-0943261C6 F - Average Exchange Rate Income Tax Act - Section 261 - Subsection 261(1) - Relevant Spot Rate circumscribed acceptance of using average exchange rates
Income Tax Act - Section 40 - Subsection 40(1) - Paragraph 40(1)(a) - Subparagraph 40(1)(a)(i) use of average exchange rates for capital property dispositions not generally accommodated
Income Tax Act - Section 39 - Subsection 39(1.1) use of average exchange rate under s. 39(1.1) is permitted
7 October 2022 APFF Financial Strategies and Instruments Roundtable Q. 4, 2022-0940941C6 - Stop-loss Rules Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(f) superficial loss allocated on a pooled basis to shares held at the end of the 61-day period by affiliated persons
Income Tax Act - Section 40 - Subsection 40(3.3) suspended loss rules engaged by shareholder, and shareholder’s RRSP acquiring and then holding identical shares during the 61-day period
Income Tax Act - Section 54 - Superficial Loss formula for prorating superficial loss is inapplicable where the number of shares held by affiliated persons has increased at the end of the 61-day period
7 October 2022 APFF Financial Strategies and Instruments Roundtable Q. 5, 2022-0936301C6 F - Guarantee fee Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(e.1) one-time fee to subsidiary for mortgaging its property as security for a bank loan to the shareholder would not qualify under s. 20(1)(e.1)
Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(e) one-time fee to subsidiary for mortgaging its property as security for a bank loan to the shareholder could qualify under s. 20(1)(e)
Income Tax Act - Section 248 - Subsection 248(1) - Business guarantee or pledge fee is from a service and, therefore, is from an undertaking of any kind whatever
Income Tax Act - Section 15 - Subsection 15(1) no shareholder benefit where corporation receives a reasonable pledge (or “guarantee”) fee from its shareholder
7 October 2022 APFF Financial Strategies and Instruments Roundtable Q. 6, 2022-0936311C6 F - Illness insurance policy used as collateral Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(e.1) critical illness insurance policy premiums on policy assigned to lender cannot be deducted under s. 20(1)(e.1)
7 October 2022 APFF Financial Strategies and Instruments Roundtable Q. 7, 2022-0938221C6 F - Régime d'accession à la propriété (RAP) - rembours Income Tax Act - Section 146.01 - Subsection 146.01(1) - Regular Eligible Amount - Paragraph (i) an HBP balance is not reduced at the beginning of the year of a contribution repayment by the repayment amount until the repayment is made
Income Tax Act - Section 146.01 - Subsection 146.01(1) - HBP Balance HBP balance not reduced until s. 146.01(3) repayment is made and prescribed form filed
7 October 2022 APFF Financial Strategies and Instruments Roundtable Q. 8, 2022-0940961C6 F - RRIF - successive deaths Income Tax Act - Section 146.3 - Subsection 146.3(1) - Designated Benefit spouse of a deceased RRIF annuitant must be still alive at the time of a payment out of the RRIF in order for the designated benefit rules to apply
Income Tax Act - Section 146.3 - Subsection 146.3(6.2) s. 146.3(6.2) reduction unavailable where surviving spouse dies before payment made out of deceased's RRIF
7 October 2022 APFF Financial Strategies and Instruments Roundtable Q. 9, 2022-0940951C6 F - FRB créée par testament après 2015 Income Tax Act - Section 118.1 - Subsection 118.1(5.1) a gift by will of a capital interest in a charitable remainder trust can be claimed only by the GRE, not the deceased
Income Tax Act - Section 118.1 - Subsection 118.1(5) - Paragraph 118.1(5)(b) gift of capital interest in charitable remainder trust is considered to be made by GRE when such interest vests in the charity
7 October 2022 APFF Financial Strategies and Instruments Roundtable Q. 10, 2022-0938301C6 F - Rebate on purchase of GIC Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(x) broker’s waiver of commission could be an inducement payment
Income Tax Act - Section 54 - Adjusted Cost Base broker-waived commission included in cost of GIC
2023-01-18 7 October 2022 APFF Roundtable Q. 1, 2022-0942081C6 F - Safe Income Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) contingent liabilities that reduce shares’ FMV should also reduce safe income on hand
7 October 2022 APFF Roundtable Q. 2, 2022-0942091C6 F - Taxable preferred shares and shareholders’ agreement Income Tax Act - Section 248 - Subsection 248(1) - Taxable Preferred Share - Paragraph (f) - Subparagraph (f)(ii) whether a right to a top-up in the event of an IPO is inconsistent with receiving FMV proceeds
7 October 2022 APFF Roundtable Q. 3, 2022-0942121C6 F - THRP- PRTA – Versement de dividendes imposables Income Tax Act - Section 125.7 - Subsection 125.7(2.01) parent could pay a dividend in, say, Period 27, without adverse CEWS impact on Canadian sub
Income Tax Act - Section 125.7 - Subsection 125.7(14.1) there is no adverse CEWS impact of a non-resident parent paying dividends to individuals
7 October 2022 APFF Roundtable Q. 4, 2022-0942131C6 F Income Tax Regulations - Regulation 1101 - Subsection 1101(5b.1) CRA is willing to adapt a prescribed requirement, that an election be made by letter attached to the return, to internet filings

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