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. … In Girard, the presumption of validity of notices of assessment under subsection 152(8) I.T.A. was not at issue. … In the event that a trustee contests the CRA's proof of claim, the legal effects of the notice of assessment, including the procedure for contesting the assessment and the time limits associated with it, are suspended until the CRA obtains the lifting of the suspension of proceedings under section 69.4 B.I.A., pursuant to the Girard decision. ...

CRA rejected a suggestion that a PAC could be held in a non-listed trust in reliance on Reg. 304(3)(a), which deems the annuitant under an annuity contract to be the holder of the contract where the contract is held by another person in trust for the annuitant (defined in Reg. 304(4) as a person who is entitled to receive annuity payments under the contract) – so that (it was suggested) the holding of the mooted PAC by a non-listed trust could be deemed to be its holding by an individual beneficiary of the trust. ... CRA concluded that “the expression ‘in trust’ in paragraph 304(3)(a) … is more akin to a nominee [arrangement]” and is not meant to accommodate non-listed trusts. ...

4 June 2024 STEP Roundtable Q. 11, 2024-1003491C6- Foreign Tax Credit for US Estate Tax-- summary under Article 29B Summary Under Tax Topics- Treaties- Income Tax Conventions- Article 29B application of Art XXIX-B(6)(a) of the Canada-US treaty where s. 70(5) gain realized on US public company shares and US realty A Canadian resident who was not a U.S. citizen was subject on death to U.S. estate tax on U.S. situs property, namely, US real property and shares of a U.S. public corporation that were not “U.S. real property interests” – and also realized a gain pursuant to ITA s. 70(5). ... In particular, Art XXIX-B(6)(a)(i) referenced any income, profits or gains arising in the U.S. within the meaning of Article XXIV(3) of the Treaty – and pursuant to the combined operation of Art. ...

10 October 2024 APFF Roundtable Q. 6, 2024-1028881C6 F- Revenu protégé-- summary under Paragraph 55(3)(a) Summary Under Tax Topics- 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 CRA, when asked to comment on the application of s. 55(3)(a) to the redemption in Example 12 of the “ CRA Update on Subsection 55(2) and Safe Income: Where are we Now?” ... In this regard, see Example 5 in the Update …. Example 5 may be summarized as follows: Parent, which owns shares of Subco with an ACB of $0 and FMV of $1,000 and no safe income, wishes to increase its cost in the shares of Subco or other property held in Subco, so that shares of Subco are redeemed for a note and the note is either held by Parent or subsequently reinvested back in the shares of Subco held by Parent. ...

. … The CRA does not consider that the use of post mortem transactions to eliminate the capital gain arising on the death of the beneficiary spouse in order to limit double taxation at the trust level results in a situation of [GAAR] abuse …. ...

CRA responded (TaxInterpretations translation): … (a) As indicated in response to question 7 at the Corporate Management Tax Conference Roundtable of the Canadian Tax Foundation in 1992, there is no hard and fast rule for determining what, in a particular situation, is considered reasonable respecting the choice of a currency in which the surplus accounts of a foreign affiliate are to be maintained for purposes of ITR subsection 5907(6). ... If an examination of these criteria, as well as others considered to be appropriate, permits a determination that use of the Canadian dollar presents a fair picture ["image juste"] of the surplus account balances of the foreign affiliate, we will consider that such use is reasonable in the circumstances. … (b) Provided that the use of the Canadian dollar is reasonable in the circumstances and that there is no retroactive tax planning involved, we will accept that the surplus account balances of a foreign affiliate for its taxation years terminating before the entry into force of the amendments effected by the 2012 Act [on 26 June 2013] are to be converted into Canadian dollars using the "relevant spot rate," as that expression is defined in subsection 261(1), at the first day of the first taxation year of the foreign affiliate commencing after 18 December 2009…. ...

Under s. 248(35)(b)(i), the FMV of the policy for gift receipting purposes was the lesser of its FMV ($100,000) and its ACB ($50,000) – except that under s. 248(36), for s. 248(35) purposes, the cost or adjusted cost base, of the property to ACo immediately before the gift could be deemed to equal the lower of its cost and adjusted cost base to Mr. ... Notwithstanding that proposed subsection 248(36) was not similarly amended, it remains our view that the ACB of an interest in a life insurance policy, as defined in subsection 148(9), is generally a reasonable proxy for the "cost" of an interest in a life insurance policy for purposes of subsection 248(36). … [S]ince ACo acquired the life insurance policy less than three years before it intends to donate the policy, the proposed gift would meet the condition in subparagraph 248(35)(b)(i) and be subject to the deemed FMV rule in subsection 248(35). ...

…[T]he fact that, in situation (a), the payment received by the taxpayer in 2017 is more than the payment required to extinguish the tax under Part X.1 … [and] in situation (b), the taxpayer is not subject to tax under Part X.1 before receiving the payment would not in and of itself preclude the application of subsection 146(8.2). …[U]nder [s. 146(8.2)(e)], if undeducted premiums have resulted in an overcontribution then, subject to paragraph 146(8.2)(f), the deduction will only be possible if such excess contribution was in fact made inadvertently. … [I]n Situation (a), the $26,010 amount paid by the taxpayer to his or her RRSP after receiving the $30,000 amount would generally be deductible under subsection 146(5). ...

Example 2 Same as example 1, except that the transferor had no unclaimed CGE at the year end – resulting in the CGE deemed to have been claimed only re $50,000 of the capital gains. Example 3 Same as Example 1, except that the transferor had $10,000 of unclaimed CGE at the year end – resulting in the CGE deemed to have been claimed only re $70,000 of the capital gains. ...

Subco used $2,000 borrowed from a third party to acquire assets with a cost amount of $3,000 – which subsequently lost all their value. ... Parentco would essentially have taken two deductions for the same loss of $1000 – first the $1000 loss on the Subco shares under 50(1), and an additional loss of $1000 on the assets of Subco. ...