Search - considered

However, in the opening sentence of the letter we stated as follows: Pursuant to the definition of "excluded property" in subsection 95(1) of the Act, a partnership interest held by a foreign affiliate of a taxpayer will be considered to be excluded property, provided that all or substantially all of the property of the partnership is used or held by the partnership principally for the purpose of gaining or producing income from an active business. As discussed, that sentence should read as follows: Pursuant to the definition of "excluded property" in subsection 95(1) of the Act, a partnership interest held by a foreign affiliate of a taxpayer (in the circumstances described in your letter) will be considered to be excluded property provided that the fair market value of the partnership interest held by the foreign affiliate is not less than 10% of the fair market value of all interests in the partnership and all or substantially all of the property of the partnership is used or held by the partnership principally for the purpose of gaining or producing income from an active business. We would also note, as discussed with you, that where a foreign affiliate of a Canadian resident immigrates to Canada, the implications of paragraph 128.1(1)(d) of the Act must be considered. ...

That subsection provides that, if the arrangement is one in which the trust can reasonably be considered to act as agent for all the beneficiaries under the trust with respect to all dealings with all of the trust's property and the trust is not a trust described in paragraphs (a) to (e.1) of the definition of trust in subsection 108(1) of the Act, the arrangement is deemed not to be a trust for the purposes of the Act. A trustee can reasonably be considered to act as agent for a beneficiary when the trustee has no significant powers or responsibilities, the trustee can take no action without instructions from that beneficiary and the trustee's only function is to hold legal title to the property. In order for the trustee to be considered as the agent for all the beneficiaries of a trust, it would generally be necessary for the trust to consult and take instructions from each and every beneficiary with respect to all dealings with all of the trust property. ...

Reasons: The wording in the Regulations is clear. 2007-022759 XXXXXXXXXX Bruce Hartt (613) 946-3558 July 16, 2007 Dear XXXXXXXXXX: Re: Request for technical interpretation- Treatment of subscription receipts under paragraph 4900(1)(e.01) of the Income Tax Regulations This is in reply to your letter of March 15, 2007,wherein you asked for our views on whether or not subscription receipts would be considered a qualified investment as defined in paragraph 4900(1)(e.01) of the Income Tax Regulations (the "Regulations"). ... Whether or not a subscription receipt is considered to be a qualified investment would be a question of fact. ... Therefore, in order for a subscription receipt to be considered a qualified investment, it would need to be listed on a prescribed stock exchange and the underlying property to which the subscription receipt entitles the holder to receive would need to be a qualified investment. ...

11 October 2007 Roundtable, 2007-0251981C6- 2007 TEI Question RRSP Qualified Investment Unedited CRA Tags 204(d) Principal Issues: Will the CRA provide further guidance with respect to specific security investments that would be considered a qualified investment for purposes of the amended definition of "qualified investment" in paragraph (d) of section 204 of the Act? ... The amended definition of "qualified investment" in paragraph (d) of section 204 of the Act uses the broad term "securities", this term should be interpreted using the ordinary meaning of the term as used in the financial community. 2007-025198 TEI dated October 11, 2007 Question from page 6- 2007 Budget measures regarding qualified investments for RRSP Will the CRA be providing further guidance on specific investments that will now be considered a qualified investment for purposes of the amended definition of "qualified investment" in paragraph (d) of section 204 of the Income Tax Act (the "Act")? CRA Response The CRA will not be providing a list of securities that may now be considered qualified for purposes of amended paragraph (d) of the definition of "qualified investment" in section 204 of the Act. ...

Position: No Reasons: Generally, if the criteria upon which an amount is paid to shareholders is solely on the basis of their shareholdings, the amount is not considered incurred by the corporation of the purpose of earning business income. ... In general terms, if the criteria upon which an amount is paid to shareholders is solely on the basis of their shareholdings, the amount is not considered incurred by the corporation for the purpose of earning business income and therefore, not deductible to the corporation. ... An amount included in a shareholder's income under subsection 15(1) of the Act is not subject to withholdings for CPP and EI, and is not considered "earned income" for RRSP purposes. ...

Principal Issues: is the icome from the sale of spare parts to be considered as the selling and servicing of property of the same type as that of products sold and leased? ... You note that the spare parts are required for the servicing of the product and is considered to be an essential part of the business of selling and leasing. In particular you have asked whether for the purposes of subparagraph 1100(16)(a)(ii) of the Regulations, income from the sale of spare parts can be considered as "the selling and servicing of property of the same type and general description". ...

Principal Issues: Whether an individual would be considered a spouse under 242(4) when the couple had lived together for more than a year, separated for more than 90 days and started to live together again for 4 months? ... After meeting this criteria, if they do not live together due to a breakdown in the conjugal relationship, after a period of 90 days of not living together the person is no longer considered the taxpayer's spouse. Should they reconcile after this 90 day period and again start living together in a conjugal relationship they are considered spouses at the point in time where they start cohabiting again. ...

Reasons: The fair market value can only be determined after all of the facts are considered. ... In addition, you ask whether the fair market value of the shares is considered to be the closing value immediately before the "stop trading order" or the opening price after the "stop trading order". ... However, all of the information that is available to the public up until and including the particular time will be considered in determining the fair market value of the shares of the corporation. ...

Principal Issues: Is a "fee" which is calculated by reference to notional interest considered to be subject to withholding under paragraph 212(1)(b)(vii)? Position: No Reasons: Not considered to be "interest" or "in lieu" thereof as there is no borrowing by the payor. ... Also, in the present situation, in that the fee is not related to a borrowing by the Canadian resident corporation, the amount would not be considered to be a payment of, or in lieu of, interest within the meaning of paragraph 212(1)(b) of the Act. ...

Principal Issues: Whether custom grain drying can be considered a "farming" activity? ... It is a question of fact whether a particular activity can be considered to be "farming" for purposes of the definition in subsection 248(1) of the Act. ... It follows that the custom grain drying business would not, in such a situation, be considered a farming business. ...