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In particular, its FX exposure on the loan would be crystallized if a wholly-owned sub of Canco 1 agreed to undertake to repay the loan on maturity in consideration for issuing an equivalent Canadian-dollar note to Canco 1. ...

As it also noted that it had previously taken the position that Bitcoins do not come within the items specifically listed in the ETA definition of “money,” namely currencies and credit instruments or devices such as cheques, promissory notes, letters of credit and bills of exchange or “other similar instrument,” its consideration of whether payment using crypto-currencies is an exempt financial service likely is focusing on whether crypto-currencies are “money” within the undefined meaning of that word. ...

This approach might inform a consideration of the minimum standards in the MLI that specifically condemn double non-taxation and treaty shopping and provide a principal purpose general anti-abuse test (“PPT”). ...

22 October 2018- 12:36am CRA indicates that more gain will be realized if an appreciated life insurance policy is distributed as redemption proceeds rather than a dividend-in-kind Email this Content 2017-0690331C6 found that a dividend-in-kind by a subsidiary to its parent of a life insurance policy would result in proceeds of disposition to it equal to the greater of the policy’s cash surrender value (CSV) and its adjusted cost basis (ACB), rather than equaling the policy’s higher fair market value (FMV), given that the dividend would not result in consideration being given for the policy. ...

1 November 2018- 1:04am CRA found that the covenant of the assuming debtor to pay accrued interest on a debt assumption was a payment in kind subject to Part XIII tax Email this Content As part of the consideration for the drop-down of the assets of a Canadian partnership (whose partners were Canco and its wholly-owned Canadian subsidiary) to a wholly-owned U.S. subsidiary (“Debtor Affiliate”), Debtor Affiliate assumed the loan including accrued interest thereon that had been owing by Partnership to another Partnership subsidiary (“Creditor Affiliate”), and Creditor Affiliate released the Partnership from its obligations under the Loan. ...

Alexandra MacLean indicated that Univar signifies that, in the context of a consideration of the general anti-avoidance rule, there can be an examination of what the taxpayer could have done versus what the taxpayer did do – but CRA is examining what limitations should be placed on this approach. ...

19 December 2018- 12:14am CRA provides a s. 84(2) ruling for a resource property spin-off by a public resource company Email this Content A public resource company effected a spin-off of one its properties by transferring it on a taxable basis to a wholly-owned Newco in consideration for Newco shares, and then distributing its Newco shares to its shareholders as a stated capital distribution. ...

The estate transferred its stepped-up preferred shares of an investments holding company (Holdco) to a Newco in consideration for shares of Newco – then one year after this, Newco will effect a reduction in the paid-up capital of such shares through the issuance of 8 promissory notes payable to the estate. ...

However, CRA stated that there likely will be an SDA where the plan also provides that members can elect to reduce or forego future bonus entitlements and accrued vacation pay entitlements for additional allocations (of equal amounts) to the member’s account (to be paid out at the earliest of termination of employment, retirement or death) – stating that these additional features “appear to be primarily motivated by tax deferral considerations.” ...

12 March 2019- 11:59pm CRA provides numerical speed limits on a pipeline for a company with a marketable securities “business” Email this Content CRA has provided the usual rulings for a pipeline transaction in which the estate sells a company with a “business” of investing and trading in marketable securities to a Newco for consideration comprising mostly a note, followed by an amalgamation of the two companies and the repayment by Amalco to the estate of the note over time. ...