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After stating the general principle that “the determination of whether an obligation has been disposed of for Canadian income tax purposes depends on whether these events are considered to result in the discharge of the obligation and the substitution of a new obligation under the law governing the former obligation,” CRA indicated that where the governing law is Canadian, such an amendment “in and of itself, would generally not constitute a disposition of the IBOR Instrument,” and then stated: Where foreign law governs an obligation … the legal effect of these events on such an obligation under the relevant foreign law must be considered in order to determine if the obligation has been disposed of …. ...

9 June 2021- 11:06pm CRA indicates that a COVID lockdown closing in-store shopping or seated restaurant dining can be a “public health restriction” notwithstanding curbside pickups or deliveries/take-out Email this Content Regarding whether the “public health restriction” definition would apply to retail stores or food court restaurants in a shopping mall subject to a COVID lockdown, the Directorate stated: [W]here a particular order or decision prohibits customers from physically entering a Store to shop, then “in-person shopping” activities could be considered restricted activities. ... Similarly, where a particular order or decision requires public seating areas of a shopping mall available to customers of the Restaurants in the food court to close, such that customers of the Restaurants are no longer permitted access to the seating area of the food court, the Restaurants’ “sit-down dining” activities could be considered restricted activities. ...

CRA indicated that it was appropriate to apply the Ensite test that “[i]f the withdrawal of the property would have a decidedly destabilizing effect on the corporate operations, the property would generally be considered to be used in the course of carrying on a business.” Accordingly: regarding a situation where the seller (BCo) transferred the “Division Assets” to ACo and retained other assets (the “Other Assets”): [W]here the Other Assets were employed and risked in BCo’s business such that their withdrawal would have a decidedly destabilizing effect on BCo’s operations, such assets must be considered when ascertaining whether, immediately prior to the acquisition by ACo, the fair market value of the Division Assets constituted all or substantially all of the fair market value of the property of BCo used in the course of carrying on business under subparagraph 125.7(4.1)(b)(i). ...

After noting its general position that “where a trust distributes assets in satisfaction of a non-resident beneficiary's capital interest in the trust, the beneficiary is considered to have disposed of that interest,” CRA indicated that, unlike the taxable Canadian property definition, the test under Art. ... Furthermore, a notice was not required to be given by the daughter beneficiary under s. 116(6.1)(b) because the estate of her parent (of which she was the sole executor) was not considered to be related to her. ...

(a taxpayer in this case) or Fyled (a UK corporate limited partner of the Cayman LP) who was liable for UK corporate income tax on carry profits allocated to the Cayman LP turned, in part, on whether Fyled was to be considered as a member of the UK LLP. In finding that Fyled could not be considered to be carrying on business in common with the named partners of the UK LLP and, thus, was not a member of the UK LLP, Whipple LJ stated: Cayman LP's business was carried on by its general partner (Cayman Ltd) and … the limited partners (including Fyled) were prohibited by Cayman law from taking part in Cayman LP's business …. ...

., hovering their hands over the body to guide energy throughout it) would not qualify as medical expenses under s. 118.4(2)(a) given the absence of any apparent “legislation that authorizes the practice of reiki in any of the Canadian jurisdictions” so that “reiki practitioners are not considered to be medical practitioners under paragraph 118.4(2)(a).” However, the College of Massage Therapists of Ontario seemed to allow registered massage therapists to integrate “First Degree Reiki” into massage therapy treatment plans, in which case, their services would still be considered to be registered massage therapy, with the associated fees being eligible as medical expenses. ...

Regarding the application of the safe-harbour rule as to the limited partners being considered to carry on business in Canada through the Manager, CRA indicated that the making of loans by the Manager on behalf of Foreign LP would generally qualify as “designated investment services” given that “there is no indication that an acquisition, holding and disposition of a debt acquired on original issue through the services of a Canadian service provider are meant to be excluded from the application of subsection 115.2(2).” Although the definition of “designated investment service” relevantly excluded only investment management and advice, CRA indicated that mere administrative services performed by the Manager would not by themselves cause the limited partners to be considered to be carrying on business in Canada (and similarly regarding any administrative services of the GP.) ...

5 May 2024- 10:58pm CRA indicates that it will follow Gardner (re deducting a sales person’s expenses of occasional travel between her home office and her employer) only on similar facts Email this Content Regarding the deductibility of automobile expense incurred by an employee, with a fully remote work arrangement, in connection with an occasional visit to the employer’s office from the home office, CRA stated: [T]raveling between an employee’s home, including a home office, and a regular place of employment (RPE) is generally considered personal travel …. … In this case, “regular” means there is some degree of frequency or repetition in the employee’s reporting to that particular location in a given pay period, month, or year. … For example, a work location may be considered to be a RPE of an employee even though the employee may only report to work at that particular location on a periodic basis (e.g., once or twice a month) during the year. ...

CRA ruled that the taxpayers will be considered to be carrying on business in Canada while such employees are providing such services, but that they will not be considered to be carrying on business in Canada through a permanent establishment, as defined in Article 5 or V of the applicable treaty, solely as a consequence of such services being so provided. ...

A disposition of the taxpayer’s claim would instead be considered to have occurred in the year of receipt of the Early Lump-Sum Repayment. Amounts received from the estate in the form of crypto-assets (i.e., the Bitcoin Cash) would be considered to have been “received” by the taxpayer as creditor when the Bitcoin Cash was credited to the taxpayer’s account with a cryptocurrency exchange. ...