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The amount described in paragraph (a) is the provisional PSPA otherwise determined under subsection 8303(3) or 8304(5), calculated on the assumption that the provisional PSPA under that other subsection is not reduced by any qualifying transfers made in connection with the past service event. ... Variable B is the amount of the individual’s qualifying transfers made in connection with the past service event. An individual’s qualifying transfers made in connection with a past service event are determined under subsection 8303(6). ...

Subsequently, on October 25, 2017 the Department of Finance released revised legislative proposals, followed on October 27 by Bill C-63 (“Bill C-63”), which expanded the scope of the tax-deferral mechanism of subsections 87(8.4) and (8.5) to also include joint elections made in connection with dispositions of certain taxable Canadian property (that is not treaty-protected property) that are interests in partnerships and interests in trusts. ... Pursuant to the October 25, 2017 draft proposals and Bill C-63, the above response would also apply for section 116 purposes in connection with valid joint elections that are filed in connection with partnership and trust interests. ...

Subsequently, on October 25, 2017 the Department of Finance released revised legislative proposals, followed on October 27 by Bill C-63 (“Bill C-63”), which expanded the scope of the tax-deferral mechanism of subsections 87(8.4) and (8.5) to also include joint elections made in connection with dispositions of certain TCP (that is not treaty-protected property) that are interests in partnerships and interests in trusts. ... Pursuant to the October 25, 2017 draft proposals and Bill C-63, the above response would also apply for section 116 purposes in connection with valid joint elections that are filed in connection with partnership and trust interests. ...

Frequently, in a group of related corporations, an entity (the "Borrower") borrows money from an unrelated lender and incurs expenses in connection with the loan on behalf of all the corporations in the group. ... An expense is incurred in the course of a borrowing of money if it is in connection with, incidental to or arising from the process of carrying out or the things which must be undertaken to carry out the borrowing. ... For example, if the Borrower incurred the expenses as an agent of the Related Entities in connection with the money borrowed by the latter, the Borrower cannot deduct the expenses at issue pursuant to subparagraph 20(1)(e)(ii) I.T.A. ...

RESPONSE As stated in paragraph 6 of IT99R4, it is the Department's practice to allow a taxpayer to deduct amounts expended in connection with legal and accounting fees incurred for advice and assistance in making representations after having been informed that the taxpayer's income or tax for a taxation year is to be revised, whether or not a formal notice of objection or appeal is subsequently filed. ...

Paragraph 8(1)(f) governs the expenses of individuals employed in connection with the selling of property or negotiating of contracts. ...

The author of the question claims that the individuals would not be considered a group of persons in the absence of sufficient common connection between them, and that the individuals would not act in concert to control the corporations. ... In this type of situation, the CRA would question the validity of the assumption that the individuals would not have sufficient connection between them and would not act in concert to control the corporations. ...

CRA Response: Paragraph 3 of Article XXIX A of the Treaty provides as follows: Where a person is a resident of a Contracting State and is not a qualifying person, and that person, or a person related thereto, is engaged in the active conduct of a trade or business in that State (other than the business of making or managing investments, unless those activities are carried on with customers in the ordinary course of business by a bank, an insurance company, a registered securities dealer or a deposit-taking financial institution), the benefits of this Convention shall apply to that resident person with respect to income derived from the other Contracting State in connection with or incidental to that trade or business (including any such income derived directly or indirectly by that resident person through one or more other persons that are residents of that other State), but only if that trade or business is substantial in relation to the activity carried on in that other State giving rise to the income in respect of which benefits provided under this Convention by that other State are claimed. The Technical Explanation ("TE") to the Fifth Protocol provides as follows (emphasis added): As described above, income that is derived in connection with, or is incidental to, an active trade or business in a Contracting State, must pass the substantiality requirement to qualify for benefits under the Convention. ...

Answer: Paragraph 6 of the Diplomatic Note, Annex B reads as follows: For purposes of applying Article XV (Income from Employment) and Article XXIV (Elimination of Double Taxation) of the Convention to income of an individual in connection with the exercise or other disposal (including a deemed exercise or disposal) of an option that was granted to the individual as an employee of a corporation or mutual fund trust to acquire shares or units ("securities") of the employer (which is considered, for the purposes of this Note, to include any related entity) in respect of services rendered or to be rendered by such individual, or in connection with the disposal (including a deemed disposal) of a security acquired under such an option, the following principles shall apply: (a) Subject to subparagraph 6(b) of this Note, the individual shall be deemed to have derived, in respect of employment exercised in a Contracting State, the same proportion of such income that the number of days in the period that begins on he day the option was granted, and that ends on the day the option was exercised or disposed of, on which the individual's principal place of employment for the mployer was situated in that Contracting State is of the total number of days in the period on which the individual was employed by the employer; and (b) Notwithstanding subparagraph 6(a) of this Note, if the competent authorities of both Contracting States agree that the terms of the option were such that the grant of the option will be appropriately treated as transfer of ownership of the securities (e.g., because the options were in-the-money or not subject to a substantial vesting period), then they may agree to attribute income accordingly. ...

See Q&A Reasons: See Q&A CALU- Conference for Advanced Life Underwriting (2005) Question 6 Indexed Side Account In connection with a universal life insurance product, an insurer offers a side account facility. ... The reporting obligations of the insurer in respect of the side account will also flow from the determination of the nature of the return earned in connection with the side account. ...