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4 June 2024 STEP Roundtable Q. 5, 2024-1003541C6- Post-Mortem Planning and GAAR-- summary under Subsection 245(4) Summary Under Tax Topics- Income Tax Act- Section 245- Subsection 245(4) no GAAR issues re conventional pipelines and s. 164(6) loss carrybacks When asked to comment on post-mortem pipelines and s. 164(6) loss carryback plans in light of the amended version of GAAR, CRA referred to its statement in 2023-0987941I7 that it “does not consider the use of a pipeline transaction as a means to preserve the capital gain arising on the death of a shareholder while limiting double taxation on the subsequent distribution of Opco’s assets to be a … [GAAR] abuse” and went on to state: As for the s. 164(6) loss carrybacks, the Directorate is not aware of any specific concerns relating to the potential application of the amended GAAR in circumstances involving the carryback of losses under s. 164(6), and has not provided any general guidance in this respect. ...

CRA responded: … ITR subsection 2601(1) provides that if an individual resides in a particular province on the last day of a taxation year and has no income for the taxation year from a business with a permanent establishment outside the province, the individual’s income earned in the taxation year in the particular province is the individual’s income for the taxation year. ...

. … The question would therefore be whether, depending on the facts and circumstances of a particular situation, shares of different classes have exactly the same rights and restrictions. ...

CRA stated: Where there is a conversion of a traditional convertible debenture by its original holder for common shares of the issuer, … in general there would be no Excess under subsection 214(7)…. ...

CRA stated: Where there is a conversion of a traditional convertible debenture by its original holder for common shares of the issuer, … in general there would be no Excess under subsection 214(7)…. ...

In that regard … the scope of the deemed trust cannot be limited by the fact that a secured creditor could in certain circumstances be equated with a third party purchaser. ...

. … [T]he CRA does not intend to provide any administrative relief to the non-resident surviving spouse who does not hold or cannot obtain a SIN so as to effect a tax-free transfer to an RRSP or a RRIF, as described above. ...

. … As for FMV, it generally represents the highest price obtainable for a property on a sale in a free and open market between two willing, informed and prudent persons acting independently. ...

. … As for FMV, it generally represents the highest price obtainable for a property on a sale in a free and open market between two willing, informed and prudent persons acting independently. ...

. … [T]he fact that a person advises a trustee should not in itself generally alter the location of central management and control of the trust at the trustee level. ...