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Should the safe income attributable to the Subco shares at time of transfer be considered in computing the safe income attributable to the Class B preferred shares in Holdco of X? ... We are of the view that any increase in Holdco's safe income on hand resulting from such dividend or capital gain that would arise from Subco's income previously allocated to the preferred shares of the capital stock of Holdco should be considered to form part of the safe income on hand of such preferred shares and should not be added to the safe income on hand in respect of the common shares of the capital stock of Holdco. ...

Do contingent liabilities and reserves, such as for pensions obligations reduce the safe income that can reasonably be considered to contribute to the capital gain on a share given that Kruco held that safe income should be reduced by cash outflows? ... The audit practices…include…a verification of the portion of the safe income that can reasonably be considered to contribute to the capital gain on each share of the corporation in any given year. ...

Which parties would be considered NR1 and NR2, respectively, and what are their reporting obligations under subsection 237.4(4)? ... Foreign Parent would be required to report pursuant to s. 237.4(4)(a) because it would be considered to be a person to whom a tax benefit results; and Canco and Foreign Opco would be required to report under s. 237.4(4)(b) because they entered into the transaction for the benefit of Foreign Parent. ...

6 December 2011 TEI-CRA Liason Meeting Roundtable Q. 10, 2011-0427291C6- 2011 TEI-CRA Liaison Meeting: Qu. 10-- summary under Subsection 247(2) Summary Under Tax Topics- Income Tax Act- Section 247- New- Subsection 247(2) As part of a response to a query that noted that CRA auditors often raise potential transfer pricing adjustments simply because it is easy to do so and proposed that CRA develop a coordinated approach to transfer pricing audits with the IRS, CRA stated: The fact that a multinational enterprise (MNE) has documented its analysis of arm's length prices and has not attempted to reduce its overall tax liability is not proper assurance that all facts and circumstances have been considered and that income has been adequately allocated between jurisdictions. ...

CRA stated: [T]he CRA intends to continue to challenge surplus stripping situations that are considered abusive, including those in the form of "tuck under" transactions, in particular by reviewing the potential application of subsections 84(2) and 245(2) in the particular situations.... ...

The Directorate indicated that in a recent tax ruling request, the CRA had concluded in light of the foreign law applicable to such a partnership, the provisions of the partnership agreement and the terms and conditions of the loan agreement between the partnership and the U.S. lender that the partners of the partnership were considered to be the payers of the interest on the loan, with the result that such interest was not exempt from withholding tax as the loan did not qualify under s. 212(1)(b)(vii). ...

CRA responded: [A]lthough an amount paid in favour of a Canadian estate as a capital dividend is used for the payment of estate taxes, the question of determining if a subsequent distribution in favour of non-resident beneficiaries can reasonably be considered to be a distribution of an amount received by the estate, or derived from such an amount, as a dividend is a question of fact. … Where applicable, the distribution would be subject to a withholding tax pursuant to subsection 212(11) and paragraph 212(1)(c)…. ...

CRA responded: [A]lthough an amount paid in favour of a Canadian estate as a capital dividend is used for the payment of estate taxes, the question of determining if a subsequent distribution in favour of non-resident beneficiaries can reasonably be considered to be a distribution of an amount received by the estate, or derived from such an amount, as a dividend is a question of fact. … Where applicable, the distribution would be subject to a withholding tax pursuant to subsection 212(11) and paragraph 212(1)(c)…. ...

7 October 2011 APFF Roundtable Q. 17, 2011-0412171C6 F- 112(7)- Share-for-Share Exchange- 85(1)-- summary under Subsection 112(3) Summary Under Tax Topics- Income Tax Act- Section 112- Subsection 112(3) s. 112(3) could still apply if "old" dividend-bearing shares "exchanged" under purported s. 85(1) exchange for "new" but identical shares Where there is an exchange of 100 common shares in the capital of a corporation for 100 "new" common shares in its capital, there could be considered to be no disposition of the old common shares (given that the share rights are identical), so that the s. 85(1) election is unavailable. ...

It was noted that in respect of the adult children, one of the requirements under subsection 104(21) is that the amount designated can reasonably be considered to have been included in computing their respective incomes for the year pursuant to paragraph 104(13)(a) or section 105. ...