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David Bunn, Mark Dumalski, "Proposed Amendments to Subsection 85.1(4)", International Tax Highlights, Vol. 1, No. 2 November 2022, p. 6-- summary under Subsection 85.1(4) Summary Under Tax Topics- Income Tax Act- Section 85.1- Subsection 85.1(4) Target of current s. 85.1(4) (p. 6) The current version of s. 85.1(4) avoids deferral of the capital gain that would otherwise be realized on the outright sale of a directly held FA (the first affiliate) through transferring it under s. 85.1(3) to a second affiliate, which then sells the first affiliate shares to a subsequent acquiror – where the first affiliate shares are excluded property so that such sale occurs on a deferred basis. ... Providing a carve-out for subsequent FA acquirors only where they are controlled by the taxpayer and other non-arm’s-length Canadian residents represents an abandonment of a “votes and value” test in favour of a test of voting control – which could open up opportunities to transfer the economics associated with the ownership of an FA (but not its de jure control) out from under Canada. ... That said, all or substantially all of the property of the first affiliate might be excluded property at the time of the initial transfer, but the first affiliate shares, or any other shares deriving their value from such shares, could not be excluded property at the time of the subsequent disposition – in which event, the initial transfer would be denied rollover treatment even though the subsequent disposition triggered FAPI. ...

Joint Committee, "Submission regarding proposed audit powers in Budget 2024 included in the August 2024 Draft Legislation", 11 September 2024 Joint Committee Submission-- summary under Subsection 231.9(6) Summary Under Tax Topics- Income Tax Act- Section 231.9- Subsection 231.9(6) Inappropriate scope of s. 231.9 rule (pp. 7-10) Where the taxpayer refuses to provide information on the basis of solicitor-client privilege and the Minister nonetheless issues a notice of non-compliance (NNC), this could pressure the taxpayer into waiving privilege rather than undertaking the onerous NNC dispute process – suggesting that since a compelled waiver is not valid, the production of documents resulting from the NNC’s issuance would likely constitute an unreasonable search or seizure contrary to s. 8 of the Charter. ... This requirement for a review of correctness clashes with s. 231.9(9), which contemplates the Federal Court reviewing whether any CRA decision to reject a privilege claim in relation to a document covered by a NNC was reasonable, a review which generally would be limited to considering that decision in light of the material before the CRA decision maker – which, crucially, would not include the document for which privilege was claimed. In contrast, the Federal Court’s review under s. 231.7 of any compliance order sought by the Minister of a document for which the taxpayer claimed privilege would be applied under a correctness standard (likely including a review of the document) – so that there could be a situation (representing an affront to the rule of law) in which taxpayer was penalized under s. 231.9 for what was subsequently established not to be a failure. ...

A himself, so this condition cannot be met; paragraph 56.4(6)(d) requires the covenant be an undertaking not to compete with the purchaser in the acquisition or with a person related to the purchaser – here, Mr. ... C do not form a related group), so this condition cannot be met either; … Unavailability of s. 56.4(7) safe harbour (p. 1607) Subsection 56.4(7) provides another exception to the section 68 deemed reallocation rule. ... C looks to subsection 56.4(4) – which at first glance appears to align the tax treatment of the restrictive covenant payment between payer and payee. ...

Convention in its application to a U.S. citizen or resident who has a TFSA, they state (at pp. 2-3): The sole remaining question is whether a TFSA is operated "exclusively to provide pension … benefits". ... Retirement is one of the listed objectives – generally a major objective. ...

. … [T]o conclude that any such obligation constitutes a commercial debt obligation, one must conclude that interest would be deductible if it were payable on the obligation. ... Although an argument could be made, depending on the precise facts, that any such interest may be deductible under section 9,…if a taxpayer is seeking to deduct any claims for damages, the CRA will likely argue strenuously that if the deduction of those claims is allowed, then their settlement should also be subject to the application of the debt forgiveness rules. … ...

", Tax For The Owner Manager, Vol. 16, No. 4, October 2016, p. 3-- summary under Subsection 152(9) Summary Under Tax Topics- Income Tax Act- Section 152- Subsection 152(9) S. 152(9) targets Last The court's finding in Last and in the earlier cases on which Last was based – that the prohibition of an increased assessment on appeal is to be applied on a source-by-source basis – is arguably inconsistent with other case law concerning what an assessment is (the assertion of the amount of tax owing). ...

. … An election under subsection 107(2.002) may thus ensure that the beneficiary acquires the distributed property at a higher adjusted cost base, with the result that capital gains or income accrued by the non-resident trust before the distribution is not subject to tax in Canada on a subsequent disposition of the distributed property by a Canadian-resident beneficiary. ... [fn 93: See… 2015-0582701E5 …and… 2004-0062121E5] Accordingly, in many circumstances it may be more efficient, subject to applicable foreign tax considerations, for a non-resident trust to realize an actual disposition of the property before the distribution. … The sole purpose of the election is to enable the beneficiary to acquire the distributed property at a cost equal to its fair market value,…[T]his purpose can be achieved in a variety of other ways, such as an actual disposition of the property (for example, a transfer to a wholly owned subsidiary of the trust) before the distribution, or even a sale of the property to the beneficiary in consideration for a promissory note, which is subsequently set off against a capital distribution made by the trust to the beneficiary. ...

If the UWA has the UWs acquire the FTS and then sell them to the intended subscribers, … the initial subscriber is the UW and the intended subscribers are subsequent purchasers who are not technically entitled to any renunciations. ... No need to contractually preclude general common law right to sue (p. 12:23) Most provinces have certain statutory rights of rescission. … All subscription agreements will generally have a covenant that the PBC will indemnify FTS holders if the tax deductions promised are not delivered. ...

Govindadeva Bernier, Tim Scholz, "Income Sprinkling Using Private Corporations", Office of the Parliamentary Budget Officer (with thanks to “Finance Canada officials for their helpful technical discussions”), 8 March 2018-- summary under Subsection 120.4(3) Summary Under Tax Topics- Income Tax Act- Section 120.4- Subsection 120.4(3) 95% of additional federal tax to be collected from families with taxable income over $150,000 The Parliamentary Budget Officer (PBO) … computed possible revenue outcomes for the government based on three different scenarios. ... This is our preferred scenario. … Under scenario 1, PBO’s preferred scenario, the new policy changes would result in an estimated $589-million increase in taxation revenues [for 2018-19], $356 million or 60 per cent of which would go to the federal government. ...

It might seem that subsection 55(2) will not apply because the dividends are less than the safe income ($250 < $300), but this is not the case. For the old shares, Holdco has $200 of safe income (100 x ($1 + $1)) and $125 of dividends (100 x $1.25). ...