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The exchanges by the Loral shareholders for shares of Telesat Corporation or units of Telesat Partnership were considered to be non-recognition transactions under Code s. 351 or s. 721. ... Telesat Corporation believes that such interpretation is consistent with the rationale expressed by the CRA for its published administrative position in this regard, so that there would be no net income inclusion to the partnership, and it was considered appropriate that there also should be no net inclusion to Telesat Corporation. ...

It is arguable that the acquisition of the … MRPS is not considered part of the ordinary course of business carried on by [Canco 2], but rather the acquisition may be considered an isolated and special transaction that is not part of a course of conduct that involves repeated dealings of a similar nature. … [I]t is also important to consider whether the arrangement in the current case, at its core, more closely resembles a debt financing arrangement or a capital investment. ...

CRA considered that the above agreement had the effect of constituting the Rémillard Brothers as de facto trustees of the trust, contrary to the trust deed and Art. 1275, so that the determinations to make the distributions pursuant to such unlawful agreement were a nullity, with the result that the distribution amounts were not “payable” as required by s. 104(6). Smith J rejected the trust’s argument that the distributions should be considered to have “became payable” for purposes of s. 104(6) solely because they were paid to the beneficiary and irrespective of whether they were unlawful. ...

This term referred inter alia to a transaction that “is not one that may reasonably be considered to have been undertaken or arranged primarily for a bona fide purpose other than for the purpose of obtaining the tax benefit.” ... To use the language of the provisions, the RVO is a transaction that may reasonably be considered to have been undertaken or arranged primarily for a bona fide purpose other than for the purpose of obtaining the tax benefit. ...

In the course of his extended dissenting reasons, Webb JA stated: Just as the scheme of the ETA does not contemplate that 100% of a particular property or service that is acquired can be considered to be used in both a commercial activity and a business of making exempt supplies, Parliament did not intend that 100% of a single payment that is made could be considered to be made in both the course of a commercial activity and in the making of exempt supplies. ...

However, when trade debts are not paid according to the creditor's normal payment terms but they are settled within 12 months of being incurred, bona fide arrangements are considered to have been made at the time the debt arose for purposes of s. 15(2.3). CRA has carried forward most or all of its positions regarding the s. 15(2.6) rule including regarding when there is series of loans or other transactions and repayments, for instance that: repayments are applied on a first-in, first-out basis (i.e., to the oldest loan first) when a shareholder has more than one loan outstanding at the time of repayment, unless the facts clearly indicate otherwise; repayments can be made by applying dividend, salary, or bonus payments against an outstanding loan; and a repayment may be considered to have been made as part of a series of loans or other transactions and repayments where the proceeds of a new loan are used to repay an existing shareholder loan. ...

30 October 2016- 11:30pm CRA indicates whether dividends paid on non-participating prefs engage s. 55(2) is a question of fact Email this Content Respecting the payment of a non-participating dividend to a holding company on preferred shares whose paid-up capital and ACB equals their redemption amount, CRA indicated that “the hypothetical capital gain that would have been realized on a FMV disposition of [the] preferred shares immediately before the dividend…would be nil,” so that the dividend would not be considered to come out of safe income on hand. ...

24 March 2017- 9:56am CRA notes that a s. 94(3) trust can cause a trust of which it is beneficiary to be subject to Part XII.2 tax Email this Content A non-resident trust, which is deemed to be resident for various purposes under s. 94(3)(a), is nonetheless considered to be a “non-resident person” for purposes of the application of Part XII.2 tax to a resident trust of which it is a beneficiary. ...

Scott JA considered this approach to be contrary to s. 261(2)(b). Neal Armstrong. ...

CRA considers that a trade union is “an association whose primary purpose is to collectively negotiate with an employer to further the working conditions of its members” and that “an association does not have to be certified trade union in order to be considered a trade union” including, in this case, an association where management automatically become members of the association when hired by the employer. ...