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After noting that the instructions provided by CRA both on the application for the CEWS or CRHP benefit and the CRA website indicated that a separate application must be filed for each RP account, the Directorate indicated that such separate applications aggregating to an overall deemed overpayment for a qualifying period should be considered to constitute an application for the qualifying period in the prescribed form and manner as required by para. ...

8 November 2022 Internal T.I. 2022-0941391I7- (Re)determination of section 125.7 applications-- summary under Paragraph (a) Summary Under Tax Topics- Income Tax Act- Section 125.7- Subsection 125.7(1)- Qualifying Entity- Paragraph (a) application for the benefit could be made on an RP by RP account basis After noting that the instructions provided by CRA both on the application for the CEWS or CRHP benefit and the CRA website indicated that a separate application must be filed for each RP account, the Directorate indicated that such separate applications aggregating to an overall deemed overpayment for a qualifying period should be considered to constitute an application for the qualifying period in the prescribed form and manner as required by para. ...

In rejecting this argument, the Directorate indicated that by virtue of s. 87(2)(g.4), Aco was considered following the Winding-up to be a continuation of Amalco, and to own the Subject Shares and, given that under s. 251.1(4)(a), a person is affiliated with itself, Aco as the transferor continued to be affiliated with the person (Aco in its capacity of a continuation of Amalco and Bco) who was the deemed owner of the Subject Shares. ...

CRA rejected Aco’s argument that on the winding-up, Amalco ceased to be affiliated with the transferor (Aco) so as to trigger the suspended loss pursuant to s. 40(3.4)(b)(i): by virtue of s. 87(2)(g.4), Aco was considered following the winding-up to be a continuation of Amalco, and to own the Subject Shares and, given that under s. 251.1(4)(a), a person is affiliated with itself, Aco as the transferor continued to be affiliated with the person (Aco as the continuation of Amalco) who was the deemed owner of the Subject Shares. ...

Consequently, the amount of Part XIII tax paid by Canco on behalf of Sisterco would not be included in computing the income of Sisterco under subsections 15(1) or (2) because, respectively, on the one hand, Sisterco is not a shareholder of Canco and, on the other hand, Sisterco would not be considered to a have received a loan from or become indebted to Canco. ...

However: [T]he amount of Part XIII tax paid by Canco on behalf of Sisterco would not be included in computing the income of Sisterco under subsections 15(1) or (2) because, respectively, on the one hand, Sisterco is not a shareholder of Canco and, on the other hand, Sisterco would not be considered to a have received a loan from or become indebted to Canco. ...

The Canadian Corp took the position that, as US Corp was a non-resident corporation which was not liable for tax in Canada, it was not a “taxpayer” under the Act in light of Oceanspan, so that it could not be considered to have a “capital property” (whose definition references a taxpayer), as required for the application of s. 13(7)(e)(ii). ...

Canco took the position that, as US Corp was a non-resident corporation which was not liable for tax in Canada, it was not a “taxpayer” under the Act in light of Oceanspan, so that it could not be considered to have a “capital property” (whose definition references a taxpayer), as required for the application of s. 13(7)(e)(ii). ...

In distinguishing between income from property and income from a business, Canadian Marconi considered “the ‘level of activity’ of the taxpayer in earning that income.” ...

After quoting from Nassau Walnut to the effect that a late designation was acceptable where the situation “ does not raise the spectre of retroactive tax planning,” the Directorate stated: [I]f the CRA has the ability to reassess the Taxpayer’s Part I income tax return for year-end #1 pursuant to subparagraph 152(4)(b)(iii) with respect to its disposition of the … US shares … the Taxpayer’s late-filed designation request could be considered. ...