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(g)(ii): In a situation where the individual has not assumed any risk, whether an arm’s length rate of interest charged is a reasonable return is a mixed question of fact and law …. ...

25 November 2021 CTF Roundtable Q. 16, 2021-0911911C6- Convertible Debentures-- summary under Participating debt interest Summary Under Tax Topics- Income Tax Act- Section 212- Subsection 212(3)- Participating debt interest following Agnico-Eagle, CRA is reviewing whether the conversion of conventional convertible debentures gives rise to s. 214(7) interest When asked to provide an update on its views expressed in 2013-0509061C6 on whether convertible debentures give rise to participating debt interest that is subject to Part XIII tax, CRA indicated: Since then, CRA has only issued 2014-0532411R3 (making amendments and adding an opinion regarding 2011-0418721R3) and 2013-0514551R3. 2014-0532411R3 provided that any amount deemed by s. 214(7) to be interest on the note conversion would not be participating debt interest, and would not be subject to Part XIII withholding tax (assuming the arm’s length test was satisfied) – and provided an opinion that in the event of a disposition of the convertible note by a non-resident to a resident (other than the issuer) for cash proceeds, the amount deemed to be a payment of interest under s. 214(7) would not constitute participating debt interest. 2013-0514551R3 provided similar rulings, which were also applicable to make-whole amounts. ...

However, if the interest at 5% was not a “reasonable return,” the split income amount would not be the total interest amount but, rather, only the excess over the reasonable return – so that, for example, if the reasonable return was 3%, the split income inclusion would be 2%. ...

CRA noted that no dividend refund arises to Opco on the $1,000,000 eligible dividend, so that there is no Part IV tax payable by Holdco thereon under s. 186(1)(b) – and that such dividend also is not subject to s. 55(2) as it does not exceed the $1,000,000 of safe income. ...

X’s will – which provided the same terms as described above. Here, since the shares held in the trust were not acquired by it as a consequence of Mr. ...

Consequently … it is possible that the conditions of subsection 104(18) could be satisfied in respect of the child or children of the deceased who are beneficiaries of the estate and who have not attained 21 years of age at the end of a particular taxation year. ...

It would make no difference if the house was co-owned by the two spouses (or if they were common-law partners) – rather than owned only by Mr. ...

The application of subsection 245(2) could be considered if the Pipeline Planning is structured to avoid the application of section 84.1 …. ...

. … What constitutes appropriate documentation depends on the specific facts and circumstances, but may include: non-consolidated financial statements of the foreign affiliate, trial balance of the foreign affiliate, complete minute books of the foreign affiliate, income tax returns and all relevant supporting schedules for the income tax returns of the foreign affiliate, support for income tax paid by the foreign affiliate, and relevant supporting documentation: describing the business(es) of the foreign affiliate, related to the nature of the income earned by the foreign affiliate, related to transactions involving the foreign affiliate, and related to dividends paid or received by the foreign affiliate. ...

CRA indicated that any income or loss from the portfolio X investments, or property substituted therefor, would be deemed to be the income or loss of Spouse A, and any taxable capital gain or allowable capital loss from the disposition of such investments or property substituted therefor will be deemed to be the taxable capital gain or allowable capital loss of Spouse A – for so long as such property continues to be held by the trust, and while Spouse A is resident. ...