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CRA responded: [T]he deposit balances of the non-resident pool participants would be considered “intermediary debts” for the purposes of subparagraphs 18(6)(c)(i) and 212(3.1)(c)(i), with the result that the back-to-back loan rules would be engaged, provided its other conditions are met. ...

Ruling ForCo will not be considered to carry on business through a permanent establishment, as defined in Article V of the Treaty, situated in Canada, solely as a consequence of the [described] activities of Employee performed in Canada…. ...

Thus… a Canadian corporate shareholder that receives such [ECP] property from its wholly-owned foreign affiliate on a return of capital should be considered to have “made or incurred” an “outlay or expense” in an amount equal to the FMV of the property at the time of the distribution. ...

In finding that the LLC3 and US LP2 units were not identical property, so that s. 40(3.3) did not apply to deny the loss, CRA stated: These differences in inherent qualities and elements could result in a prospective buyer to have a preference of one property over the other, which would then result in the membership units in DLLC and the partnership units in DLP not being considered identical properties. ...

CRA ruled that Canco1 and Canco2 (at the top of the Canadian stack) will each be considered to be a QSC. ...

. … Given that it is our view that Weston should not have any effect on Rulings’ policy regarding interest rate derivatives, Rulings’ policy regarding interest rate derivatives would continue to apply and therefore the Bond Locks should be considered to be on income account. … ...

Would the income arising from such sales be considered to be earned or realized before the safe-income determination time? ...

In finding that this amount is subject to Part IV tax, CRA stated (TaxInterpretations translation): [T]he amount designated in respect of the beneficiary (taxpayer) in accordance with subsection 104(19) should be considered to be deemed to be received as a dividend by the beneficiary of the trust at the end of the trust’s taxation year in which the trust received the dividend. ...

CRA confirmed that the new PLOI loan will not cause the old loan to be considered to have been “repaid…otherwise than as part of a series of loans or other transactions and repayments” as per s. 90(8)(a), so that a $10M income inclusion to Canco under the upstream loan rules will be avoided. ...

26 May 2016 IFA Roundtable Q. 7, 2016-0642121C6- 93(2.01) & Capital Contribution-- summary under Subsection 93(2.01) Summary Under Tax Topics- Income Tax Act- Section 93- Subsection 93(2.01) contribution of shares to a subsidiary caused the subsidiary shares to be substituted property CRA considered that the s. 93(2.01) stop loss rule applied where Canco made a contribution of capital to a foreign subsidiary (FA2) of its shares of a non-resident Finco subsidiary (FA1) which had paid dividends out of its deemed active business income to Canco – so that s. 93(2.01) denied a subsequent capital loss realized on an arm’s length sale of the FA2 shares to the extent of such dividends. ...