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4 June 2024 STEP Roundtable Q. 13, 2024-1007851C6- DRT and Section 216-- summary under Paragraph 94(3)(g) Summary Under Tax Topics- Income Tax Act- Section 94- Subsection 94(3)- Paragraph 94(3)(g) although resident tenant required to withhold on rent to s. 94(3), s. 94(3)(g) applies to such withholding Regarding the application of Part XIII to a non-resident trust that is deemed to be resident in Canada pursuant to s. 94 and which owns a Canadian rental property, CRA indicated that such trust is not subject to Part XIII tax on amounts paid or credited to it, but is not considered to be resident in Canada for the purposes of determining the liability of a person other than the trust to withhold and remit under s. 215 – so that there is still a requirement for the Canadian tenant(s) to withhold and remit Part XIII tax on the rent paid by them. ...

Because Gabon and Ivory Coast are civil law jurisdictions, it was considered appropriate to compare the characteristics of such entities to those of partnerships formed under the Civil Code of Quebec. ...

CRA also indicated, if the loan was not bona fide, the application of s. 56(2) should also be considered. ...

CRA indicated: An immovable is normally considered to be a single property unless it is legally subdivided into two or more separate properties. ...

Thus, we are of the view that income arising from the disposition of a flipped property could be considered income from an active business and be eligible for the SBD subject to the limits and requirements set out in the Income Tax Act, in particular, in section 125. ...

Where applicable, the payment of such fees by another person, such as a trustee or beneficiary, could be considered a contribution or transfer made indirectly to the trust by that other person and could, depending on the circumstances, result in the application of subsection 75(2). ...

In brief oral comments regarding Foix when a question about this case was repeated at the 2024 CTF Roundtable, CRA indicated that: the reasons in Foix should be carefully considered in connection with any proposed hybrid sale, with the one exception of transactions identical to those in Geransky; the decision reinforces the broad scope of s. 84(2), and the role of that subsection as an anti-avoidance provision; and that it represents a departure in some respects from the more restrictive view of s. 84(2) evident in some earlier cases. ...

CRA further noted that the meaning of “substantially all” has both qualitative and quantitative components and that neither CRA nor the courts have ever considered 90% to be a strict threshold for “substantially all.” ...

3 December 2024 CTF Roundtable Q. 7, 2024-1038221C6- Post-Mortem Pipeline Bump Planning-- summary under Subclause 88(1)(c)(vi)(B)(I) Summary Under Tax Topics- Income Tax Act- Section 88- Subsection 88(1)- Paragraph 88(1)(c)- Subparagraph 88(1)(c)(vi)- Clause 88(1)(c)(vi)(B)- Subclause 88(1)(c)(vi)(B)(I) estate beneficiary not considered to acquire 10% interest in estate company prior to deemed s. 88(1)(d.2) and (d.3) acquisition The estate of an individual who, on death, wholly-owned Aco, included a charity entitled to 11% of the Estate. ...

However, CRA’s new position was that an amount paid in the circumstances described here, other than the reimbursement of certain out-of-pocket costs (such as, apparently, the travel expenses in Weyerhaeuser), would be considered to be paid for services rendered in Canada that indeed have the character of income in the hands of NRco. ...