CRA has released the final version of the 2024 APFF Roundtable

16 January 2025 - 11:10pm
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CRA has published the final versions of the 17 questions and answers of the (regular) 10 October 2024 APFF Roundtable. (The finalized 2024 APFF Financial Strategies and Instruments Roundtable severed letters have already been published.) There were only minor changes from the versions that were made available at the time (including a minor expansion of CRA's discussion of the Foix decision at Q.3 of the Roundtable - which for some reason was renumbered as Q.18 in the severed letter). The discussion of Foix in the written version of the 2024 CTF Annual Roundtable, Q.15 was shorter and blander.

For your convenience, the table below sets out the descriptors and links to the summaries, and translated questions and answers, which we prepared in October.

Topic Descriptor
10 October 2024 APFF Roundtable Q. 1, 2024-1028361C6 F - Règles de revente précipitée Income Tax Act - Section 12 - Subsection 12(13) - Paragraph 12(13)(b) there are no reorganization continuity rules to avoid triggering a flipped property gain from a disposition upon completion of a reorganization/ meaning of housing unit
Income Tax Act - Section 125 - Subsection 125(7) - Active Business Carried On by a Corporation gain from flipped property qualified for SBD
10 October 2024 APFF Roundtable Q. 2, 2024-1028371C6 - Transfert intergénérationnel d’entreprise – nouvelles règles Income Tax Act - Section 84.1 - Subsection 84.1(2.32) - Paragraph 84.1(2.32)(f) - Subparagraph 84.1(2.32)(f)(ii) s. 84.1(2.32)(f)(ii) not satisfied if substantial unpaid purchase price at end of 10 years
Income Tax Act - Section 84.1 - Subsection 84.1(2.32) - Paragraph 84.1(2.32)(a) s. 84.1(2)(e) exception is available only for the 1st disposition if the subject corporation shares are sold in tranches
Income Tax Act - Section 84.1 - Subsection 84.1(2.3) - Paragraph 84.1(2.3)(i) parent remaining as director of the subject corporation would entail a retention of management
Income Tax Act - Section 84.1 - Subsection 84.1(2.32) - Paragraph 84.1(2.32)(c) - Subparagraph 84.1(2.32)(c)(i) retention of special voting shares by parent would preclude access to s. 84.1(2)(e) exception
10 October 2024 APFF Roundtable Q. 4, 2024-1028431C6 F - Production d’une déclaration de renseignements T1134 dans une situation donnée Income Tax Act - Section 233.4 - Subsection 233.4(4) example of a designated related-group entity filing a single T1134 for the group
10 October 2024 APFF Roundtable Q. 5, 2024-1028681C6 F - Précisions sur les instructions au formulaire T1134 Income Tax Act - Section 233.4 - Subsection 233.4(4) a reporting-entity partnership with a partner related to other group members can qualify as a member of a related group for T1134-reduced reporting purposes
10 October 2024 APFF Roundtable Q. 6, 2024-1028881C6 F - Revenu protégé Income Tax Act - Section 55 - Subsection 55(3) - Paragraph 55(3)(a) GAAR may apply where the purpose of a s. 55(3)(a) redemption for a note is increasing outside basis, but not where freeze shares are redeemed for personal cash needs
Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) safe income was not allocable to preferred share issued on s. 85(1) roll-in of goodwill
10 October 2024 APFF Roundtable Q. 7, 2024-1027361C6 F - Impôt en main remboursable au titre de dividendes déterminés et impôt en main remboursable au titre de dividendes non déterminés Income Tax Act - Section 129 - Subsection 129(4) - Non-Eligible Refundable Dividend Tax on Hand potential conversion of ERDTOH to NERDTOH through inter-corporate dividends
10 October 2024 APFF Roundtable Q. 8, 2024-1028891C6 F - Définition du terme « automobile » Income Tax Act - Section 248 - Subsection 248(1) - Automobile - Paragraph (e) the exclusions under (e), in the case of a leased vehicle, are to be applied in the year of lease signing
10 October 2024 APFF Roundtable Q. 9, 2024-1028901C6 F - Exercice d’une option d’achat et vente du véhicule Income Tax Act - Section 13 - Subsection 13(5.2) vehicle lease payments converted into recapture on option exercise and vehicle sale
Income Tax Act - Section 49 - Subsection 49(3) portion of lease payments added to ACB of purchase option only to the extent reasonably attributable thereto
10 October 2024 APFF Roundtable Q. 10, 2024-1028911C6 F - Traitement fiscal du montant payé par un particulier en affaires pour mettre fin hâtivement à un contrat de location automobile Income Tax Act - Section 67.3 an early lease termination fee might potentially be an “actual lease charge” for purposes of the s. 67.3 lease-payment deductibility limit
10 October 2024 APFF Roundtable Q. 11, 2024-1028921C6 F - Récupération d’amortissement liée à un bien de la catégorie 10.1 – travailleur autonome Income Tax Regulations - Schedules - Schedule II - Class 10.1 choice between technical and simplified method where mixed business and personal use
Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(d) where a vehicle is used both personally and for business by a self-employed worker, there is a choice between a simplified method, and that under ss. 13(7)(c) and (d)
10 October 2024 APFF Roundtable Q. 12, 2024-1028931C6 - Article 84.1 L.I.R. Income Tax Act - Section 84.1 - Subsection 84.1(2) - Paragraph 84.1(2)(a.1) - Subparagraph 84.1(2)(a.1)(ii) the testing of a NAL relationship regarding the ACB grind under ss. 84.1(2)(a.1) and 84.1(2)(a.1)(ii) occurs when the shares are acquired, rather than when transferred as described in s. 84.1/ non-application in back-to-back sale
10 October 2024 APFF Roundtable Q. 13, 2024-1027371C6 - Planification post mortem à la suite du décès du bénéficiaire d’une fiducie testamentaire exclusive au conjoint Income Tax Act - Section 245 - Subsection 245(4) post-mortem planning to avoid double taxation is generally not abusive
Income Tax Act - Section 129 - Subsection 129(1.2) non-application of s. 129(1.2) where post-mortem planning to prevent double taxation
Income Tax Act - Section 69 - Subsection 69(5) s. 69(5) wind-up of a Newco can be used by trust to realize a capital loss to offset a capital gain realized by it under s. 104(4)(a)
10 October 2024 APFF Roundtable Q. 14, 2024-1028951C6 - Utilisation des pertes autres qu’en capital après acquisition de contrôle et fusion Income Tax Act - Section 111 - Subsection 111(5) - Paragraph 111(5)(a) losses from a business of Holdco providing admin services to Opco likely would disappear following an acquisition of control and their amalgamation
Income Tax Act - Section 87 - Subsection 87(2.1) separate admin services business within Amalco likely would not be respected as the continuation of a predecessor's management business
10 October 2024 APFF Roundtable Q. 15, 2024-1028451C6 F - Paiement d’une dépense d’une fiducie et paragraphe 75(2) L.I.R. Income Tax Act - Section 75 - Subsection 75(2) payment of trust-related professional fees by a trustee or beneficiary prior to (rather than after) trust settlement does not engage s. 75(2)
10 October 2024 APFF Roundtable Q. 16, 2024-1028961C6 F - Modification de la règle générale anti-évitement Income Tax Act - Section 245 - Subsection 245(4) summary of prior positions on the new GAAR with economic substance
10 October 2024 APFF Roundtable Q. 17, 2024-1028981C6 - Acquisition de contrôle Income Tax Act - Section 251.2 - Subsection 251.2(2) - Paragraph 251.2(2)(a) sale by 2 equal shareholders of 1/3 of each’s shares to a 3rd unrelated person might not entail an acquisition of control; similarly where 1 of 4 equal shareholders is redeemed
10 October 2024 APFF Roundtable Q. 18, 2024-1027351C6 F - Arrêt Foix et ventes hybrides Income Tax Act - Section 84 - Subsection 84(2) Foix established that s. 84(2) should be construed broadly