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S. 51.1 will apply to the conversions in 1 and 5 such that Forco and the Partnership will be considered to dispose of the Notes for their ACB and to have reacquired them for the same amount. ...

[T]he term "paid... for the year"...relates to the year for which the taxpayer is liable to pay tax to the foreign jurisdiction for the income which is considered to have been earned under the tax law of the foreign jurisdiction even though the income may not be realized in Canada in the year for which the foreign tax is paid. ...

" The letter then states: For the purposes of subclause 55(3.1)(b)(i)(A)(II), in determining whether XXX% or more of the FMV of the common shares of Foreign Spinco that Foreign Pubco owns was derived from the shares of Canco, TCo, Newco 3, Forco, Foreign Pubco, Newco 4 and New Holdco as described [above], the External Debt of Foreign Spinco…will be considered to reduce the FMV of each property of Foreign Spinco pro rata in proportion to the relative FMV of all property of Foreign Spinco. ...

[and] [f]or this purpose, ACo will not be considered to have been wound up until it has been formally dissolved. ...

" Consequently, a corporation which has neither assets nor liabilities at the end of a taxation year (or, in any event, has no liabilities at that time) cannot generally be considered insolvent for purposes of ITA subparagraph 50(1)(b)(iii). ...

Respecting who are the objects of the test provided in subsection 74.4(2), which refers to where it may reasonably be considered that where one of the main reasons for a transfer or a loan of property to a corporation may be to reduce the income of the transferor and to benefit a designated person in respect of the individual, we are of the view that a designated person in respect of Trust A would include, in this situation, a person under 18 years who would be beneficially interested in Trust A if subsection 248(25) applied without taking into account clauses (b)(iii)(A)(II) to (IV), or a person under 18 years who did not deal at arm's length with a person who would be beneficially interested in Trust A if subsection 248(25) applied without taking into account clauses (b)(iii)(A)(II) to (IV). ...

The entering by the Non-Resident Holders into the Settlement Agreement and their voting in favour of the Plan, in and of themselves, will not result in any of the Non-Resident Holders being considered to not deal at arm's length…with either the Trust or the Trustee. ...

[T]o the extent that it can be established that the amount owing which was assumed by CFA 3 on the absorptive merger was in respect of assets previously acquired by CFA 3 in the course of carrying on an active business, the loan to CFA 3 by the Taxpayer should be considered as having been incurred for the purpose of earning income from an active business. ...

After quoting 9725615 as to the meaning of "significant," CRA noted that an "increase in interest of only a small percentage ["faible pourcentage"] could be considered by the CRA not to be significant. ...

Respecting the second condition, CRA stated "providing a range of municipal-type services or providing a key service traditionally offered by the provinces or territories such as social services, oversight of the environment, health services, and education is generally considered to constitute performing a function of government," and then stated: It is not sufficient to merely state that they are providing several municipal type services. ...