Payment & Receipt

Cases

Kufsky v. Canada, 2022 FCA 66

A shareholder loan balance that was owing by the taxpayer was eliminated through dividend declarations backdated to the three preceding years and...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 160 - Subsection 160(1) per majority, taxpayer estopped from arguing that she had not received a dividend when she had already pocketed at tax benefit from submitting the contrary 552
Tax Topics - General Concepts - Fair Market Value - Other property transfer amount not determined net of income taxes 76
Tax Topics - General Concepts - Estoppel a taxpayer received dividends for s. 160 purposes where she was estopped from arguing otherwise or because the corporate insolvency did not matter 307
Tax Topics - General Concepts - Onus prima facie case requires a balance of probabilities 237
Tax Topics - General Concepts - Illegality dividend declared and paid by insolvent corporation would be valid 301

Canada v. Innovative Installation Inc., 2010 DTC 5175 [at 7317], 2010 FCA 285

In order to ensure payment of a loan owing by the taxpayer ("Innovative") to a bank (RBC) on the death of Innovative's principal (Mr Peacock),...

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Words and Phrases
receive
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account receipt of insurance proceeds through debt repayment 156

Wannan v. Canada, 2003 DTC 5715, 2003 FCA 423

The quantum of the taxpayer's liability under s. 160 turned upon whether a bankruptcy dividend received by the Crown from the trustee in...

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Banner Pharmacaps NRO Ltd. v. Canada, 2003 FCA 367, 2003 DTC 5642 (FCA)

The wholly-owned Canadian subsidiary of the taxpayer declared a dividend, with the resolution stipulating that the dividend was "to be payable by...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(j) dividends recognized on cash basis 117
Tax Topics - Income Tax Act - Section 133 - Subsection 133(8) - Non-Resident-Owned Investment Corporation dividend received when note issued/such note not a money-lenidng business 227

Canada v. Gillette Canada Inc., 2003 DTC 5078, 2003 FCA 22

The replacement of a French-franc note by a Canadian-dollar note with an equivalent principal amount did not give rise to a payment or crediting...

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Hickman Motors Ltd. v. Canada, 97 DTC 5363, [1997] 2 S.C.R. 336, [1998] 1 CTC 213

In connection with finding that the taxpayer had generated revenues, which were not reflected in its financial statements, from holding leasing...

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Piché v. MNR, 93 DTC 5295 (FCA)

Interest owing to the taxpayer as a result of the acceptance by his co-shareholders of his offer to sell his shares in a corporation, was found to...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(c) interest received upon the receipt of cheque 100

Coppley Noyes & Randall Ltd. v. The Queen, 91 DTC 5291 (FCTD), varied on appeal 93 DTC 5196, 5508 (FCA).

The taxpayer's practice, in determining its allowance for doubtful accounts at the end of its taxation year on November 27, 1082, included having...

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Minsham Properties Ltd. v. Price, [1990] BTC 528 (Ch. D.)

Although "there can be no doubt that a book entry can constitute payment" (p. 540), in the case of an informal loan from the taxpayer's parent...

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Cumberland Properties Ltd. v. The Queen, 89 DTC 5333, [1989] 2 CTC 75 (FCA)

On November 24, 1980 the Department of Supply and Services issued a refund cheque to "Cumberland Properties Ltd. c/o John Church", which was the...

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C. & E. Commissioners v. Faith Construction Ltd., [1989] BTC 5121 (C.A.)

In response to the proposed repeal effective 1 June 1984 of the zero rating of building alteration services, four building companies with existing...

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Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Section 341 - Subsection 341(1) 124

Parkside Leasing Ltd. v. Smith, [1985] BTC 25 (HC)

Interest paid by cheque was not received on the date that the cheque was received. Instead, the interest was not received until either the date...

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Narich Pty. Ltd. v. Commissioner of Pay-roll Tax, [1984] BTC 8019 (PC)

An argument was rejected to the effect that fees received by employees of a company were not wages because they were collected directly from...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 5 - Subsection 5(1) 76

Western Union Insurance Co. v. The Queen, 83 DTC 5388, [1983] CTC 363 (FCTD)

The sending of a cheque by the lender to (its) solicitors did not constitute the payment of a sum to the borrower.

The Queen v. Ans, 83 DTC 5038, [1983] CTC 8 (FCTD)

A company's shareholder was held to have received a bonus when the amount of the bonus payable by the company was credited against the balance...

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Mendels v. The Queen, 78 DTC 6267, [1978] CTC 404 (FCTD)

The taxpayer was partner with another dentist in the partnership for their professional practice and tey also jointly owned a corporation (the...

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The Queen v. Canadian-American Loan and Investment Corp. Ltd., 74 DTC 6104, [1974] CTC 101 (FCTD)

The taxpayer, which operated a boat storage business in a storage building, subleased a portion of the leased premises to an affiliate...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 56 - Subsection 56(4) 83

Blauer v. MNR, 71 DTC 5113, [1971] CTC 154 (F.C.T.A.), briefly aff'd 75 DTC 5076, [1975] CTC 112 (SCC)

A post-dated cheque was payable for purposes of ss. 12(1)(l) and 76(1) on its date rather than the date of delivery.

Hall v. MNR, 70 DTC 6333, [1970] CTC 510 (Ex Ct), briefly aff'd 71 DTC 5217 (SCC)

An individual following the cash method for the recognition of interest income received interest represented by interest coupons on the due dates....

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(c) sale of matured interest coupons gave rise to interest receipt or amount in lieu 204

Robwaral Ltd. v. MNR, 60 DTC 1025, [1960] CTC 16 (Ex Ct), briefly aff'd 64 DTC 5266 (SCC)

A dividend was "received" by a shareholder in the year in which the cheque was drawn and received by him, rather than in the previous year in...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 90 - Subsection 90(1) 67

Moody v. MNR, 57 DTC 1050 (Ex Ct)

In finding that cheques that a cash-basis farmer had on hand at the beginning of the year were income in the previous year when they had been...

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Flinn v. MNR, 3 DTC 1157, [1948] Ex. C.R. 272 (Ex Ct)

Dividends on preference shares of a corporation, including those held by the taxpayer, were substantially in arrears. The corporation declared a...

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See Also

Clark v HM Revenue and Customs, [2020] EWCA Civ 204

The taxpayer, a retired UK businessman, implemented a scheme to transfer funds (the “Suffolk Life Transfer") from his self-invested personal...

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Black v. The Queen, 2019 TCC 135

The taxpayer (“Black”) controlled both Hollinger Inc. (“Inc.”) and Hollinger International Inc. (“International”). The Delaware Court...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) an ancillary income-earning purpose for making a loan whose terms were never finalized was sufficient to satisfy s. 20(1)(c)(i) 659
Tax Topics - General Concepts - Effective Date loan was effective even though never documented and ultimately repudiated 380

Borealis Geopower Inc. v. The Queen, 2018 TCC 189 (Informal Procedure)

Although all the conditions for the receipt of government assistance had not yet been (and never were) satisfied, Campbell J found that the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 37 - Subsection 37(1) - Paragraph 37(1)(d) taxpayer had “physically” received unearned government assistance because it had authority to deal with the funds 243
Tax Topics - Income Tax Act - Section 162 - Subsection 162(11) loss carryback did not reduce late-filing penalty or interest 278

Blott v. The Queen, 2018 TCC 1 (Informal Procedure)

The taxpayer was a market dealer with a securities dealer (“WCM”), which provided support in the form of an assistant, shared with others and...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 8 - Subsection 8(1) - Paragraph 8(1)(i) - Subparagraph 8(1)(i)(ii) retaining an assistant was not a requirement of employer 121

Markou v. The Queen, 2016 TCC 137

A Quistclose trust (as described by C. Miller J ) provides an equitable remedy to a lender where it has lent to a borrower for a specific purpose...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(1) TCC had jurisdiction to determine that no lender equitable remedy (under Quistclose trust doctrine) attached to leveraged donation advances 425
Tax Topics - Statutory Interpretation - Interpretation Act - Section 8.1 TCC has jurisdiction to determine existence of equitable remedy 96

M. Soutar Decor 2000 Ltd. v. The Queen, 2016 TCC 62 (Informal Procedure)

Bocock J found that when a bank seized the security (a GIC) provided by a tax debtor to secure his guarantee of a bank loan to his son’s...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 160 - Subsection 160(1) transfer from guarantor by virtue of seizure of security by tax debtor’s bank 308

Blank v. Commissioner of Taxation, [2015] FCAFC 154, aff'd [2016] HCA 42

In 1994, a non-resident executive was granted units which entitled him, on retirement, to receive payments calculated by reference to the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(a) phantom profit participation unit amounts not income until paid by employer rather than when due 737
Tax Topics - Income Tax Act - Section 115 - Subsection 115(1) - Paragraph 115(1)(a) - Subparagraph 115(1)(a)(i) no apportionment possible between resident and non-resident services 286

Great-West Life Assurance Company v. The Queen, 2015 TCC 225

The appellant ("Great-West") provided prescription drug plans to the employees of various employers. The claims were processed by a third party...

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Locations of other summaries Wordcount
Tax Topics - Excise Tax Act - Regulations - Financial Services (GST/HST) Regulations - Subsection 4(2) electronic drug plan adjudication and processing was "quintessentially administrative in nature" 279
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (f.1) essential character of drug claim processing service was providing payment to the claimant 306
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (r.4) services described in (r.4) did not represent the essential character of drug claim processing service 269
Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Financial Service - Paragraph (r.5) essential character of drug claim processing service was providing payment to the claimant 186

Dimane Enterprises Ltd. v. The Queen, 2015 DTC 1013 [at 64], 2014 TCC 334

Purported distributions out of a purported EPSP to children employees of the taxpayer were to a bank account controlled by the father, so that the...

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Locations of other summaries Wordcount
Tax Topics - General Concepts - Sham purported recipients of trust distributions had no control over funds 242
Tax Topics - Income Tax Act - Section 144 - Subsection 144(1) - Employee Profit Sharing Plan purported recipients of trust distributions had no control over funds 242

Transalta Corporation v. The Queen, 2012 DTC 1106 [at 3044], 2012 TCC 86

Margeson J. accepted (at para. 99) that employees to whom the taxpayer issued shares in payment of bonuses to them gave consideration equal to the...

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McKenzie v. The Queen, 2011 DTC 1216 [at 1274], 2011 TCC 289

In settlement of a suit by the taxpayer, who was an income beneficiary, the settlement agreement provided for the payment by the trust to her of...

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Words and Phrases
distributed

Newmont Canada Corporation v. The Queen, 2011 DTC 1117 [at 628], 2011 TCC 148, aff'd 2012 DTC 5138 [at 7292], 2012 FCA 214 supra

The taxpayer acquired a 100% undivided interest in a property (the "Quarter Claim") adjoining its "Golden Giant" mine subject to a 50% net profits...

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Words and Phrases
reimbursement

Sochatsky v. The Queen, 2011 DTC 1065 [at 346], 2011 TCC 41, 2012 TCC 65

The individual taxpayer was found to have received a bonus from a closely-held corporation in the year that the corporation declared the bonus...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 5 - Subsection 5(1) amount booked as loaned-back bonus was remuneration 186
Tax Topics - Income Tax Act - Section 56 - Subsection 56(2) 168

Merchant v. The Queen, 2010 TCC 467

The shareholder of a Canadian company (“Merchant 2000”) lent U.S. $650,000 to a wholly-owned U.S. subsidiary (“Merchant U.S.”) of Merchant...

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Johnson v. The Queen, 2010 DTC 1213 [at 3568], 2010 TCC 321 (Informal Procedure)

Frequent flyer points applied by the taxpayer to purchase air tickets to Chicago for medical treatment there constituted "an amount paid" for...

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Innovative Installation Inc. v. The Queen, 2009 DTC 1388 [at 2135], 2009 TCC 580, aff'd supra

After noting (at para. 21) that "the case law is clear that an amount may be included in income even where it is only notionally or constructively...

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O'Dea v. The Queen, 2009 DTC 912, 2009 TCC 295

Promissory notes owing by the taxpayers, which were consideration for their acquisition of units of a limited partnership, provided that the...

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Collins & Aikman Products Co. v. The Queen, 2009 DTC 1179 [at 958], 2009 TCC 299, aff'd 2010 DTC 5164 [at 7293], 2010 FCA 251

A Canadian corporation ("C&A") paid two dividends to its Canadian-resident parent ("Holdings"), which distributed the same amounts to its...

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WPH Mechanical Services Ltd. v. The Queen, 2007 DTC 263, 2006 TCC 677

t was found that bonuses declared payable by the taxpayer to its two directors were paid by it within the 180 day period referred to in s. 78(4)...

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Aprile v. The Queen, 2005 DTC 585, 2005 TCC 216 (Informal Procedure)

Bell J. rejected the Crown's submission that the taxpayer can only make a deduction under s. 8(1)(i) for amounts paid in cash or by cheque with...

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Hill v. The Queen, 2002 DTC 1749 (TCC)

Miller T.C.J. noted that with respect to the situation where the taxpayer, which owed approximately $60 million in accrued interest, paid $60...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) 213
Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) no Crown explanation of different treatment of simple interest 241

MacNiven v. Westmoreland Investments Ltd., [2001] 1 All ER 865 (HL)

In order to generate an interest deduction for accrued interest owing by an insolvent company ("WIL") to its shareholder (a pension fund) pursuant...

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Fleishman v. The Queen, 98 DTC 1836, [1998] 3 CTC 2096 (TCC)

'The taxpayer received two cash payments of $10,000 and $25,000 on an interest-bearing promissory note for $525,000 owing by an arm's length...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(c) payment applied by creditor to principal 70

Gibson v. The Queen, 95 DTC 749, [1996] 1 CTC 2105 (TCC) (Informal Procedure)

The taxpayer transferred his equity in a house to his former spouse in satisfaction of arrears of alimony or maintenance owing to her of $19,946....

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Phillips v. The Queen, 95 DTC 194, [1994] 2 CTC 2416 (TCC)

In finding that the redesignation of a 'bonus payable' to 'due to shareholder' did not constitute the receipt of an amount giving rise to income...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 5 - Subsection 5(1) 103

Blais v. MNR, 92 DTC 1497 (TCC)

A taxpayer was ordered in 1984 to retain arrears of alimentary allowance that had accumulated from March 1983 onward to be applied against an...

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Ed Sinclair Construction & Supplies Ltd. v. MNR, 92 DTC 1163, [1992] 1 CTC 2218 (TCC)

Bowman J. stated:

A mere bookkeeping entry in a loan account by itself does not constitute a taxable event unless there is something more, such as...

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Re Charge Card Services Ltd., [1988] 3 All E.R. 702 (C.A.)

A company issued charge cards to cardholders who would obtain petrol from garages by presenting the card and signing a sales voucher completed by...

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Associated Insulation Products, Ltd. v. Golder (1944), 26 TC 231, [1944] 2 All E.R. 203 (C.A.)

An American corporation passed a resolution providing "'that a distribution of seven per cent on the capital stock of this corporation, amounting...

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Cross v. London Provincial Trust Ltd., [1938] 1 All E.R. 428 (C.A.)

The taxpayer, who held bonds on which the payment of interest had been suspended, exchanged his matured interest coupons on the bond for...

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Gresham Life Society Co., Ltd. v. Bishop (1902), 4 TC 464 (HL)

The taxpayer, a UK life insurance company which was managed in London and had foreign branch businesses, was assessed for interest and dividends...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 82 - Subsection 82(1) - Paragraph 82(1)(a) no constructive receipt 210

Administrative Policy

15 March 2019 External T.I. 2018-0766021E5 - Obligation to prepare T4A slips

A Canadian university agreed with a (perhaps, foreign) Ministry to apply funding received by it to pay the tuition of and a monthly stipend to...

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Words and Phrases
payer
Locations of other summaries Wordcount
Tax Topics - Income Tax Regulations - Regulation 200 - Subsection 200(2) where X makes a payment at the direction of Y, X need not issue a T4A to the payment recipient 151

2021 Ruling 2021-0876671R3 - Transfer between US pension plans

S. 56(1)(a) generally requires the recognition of an amount received as or in satisfaction of a pension benefit. A portion of a multi-employer US...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(a) - Subparagraph 56(1)(a)(i) the transfer of a portion of the assets and Canadian beneficiaries from an old to a new US pension plan did not result in receipt under s. 56(1)(a) 466
Tax Topics - Treaties - Income Tax Conventions - Article 18 the transfer of a portion of the assets and beneficiaries from an old to a new US pension plan did not result in taxable income under the IRC 183
Tax Topics - Income Tax Act - Section 207.6 - Subsection 207.6(5.1) Reg. 6804 exclusion applied 178

29 March 2021 Internal T.I. 2020-0865791I7 - CEWS - eligible remuneration

The CEWS (wage subsidy) is generated based on the amounts of “eligible remuneration paid to the eligible employee.” CRA stated, in the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(2) remuneration not paid by journal entry 164
Tax Topics - Income Tax Act - Section 125.7 - Subsection 125.7(1) - Eligible Remuneration - Paragraph (c) eligible remuneration that is returned to the eligible employer as a capital contribution or shareholder loan adjustment is excluded for CEWS purposes 187

29 September 2020 External T.I. 2018-0757501E5 F - Crédit pour intérêts sur les prêts étudiants

A Quebec post-secondary student loan program provided for an initial 12-month “full exemption period” (in which the Quebec government paid the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.62 capitalization of interest on a novation would constitute its payment – but novated loan would be a new non-student loan 221
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(d) capitalization of unpaid interest by way of novation constituted its payment 66

13 August 2020 External T.I. 2019-0802891E5 F - Unclaimed RRSP Benefits

The estate of the deceased annuitant of an RRSP was fully settled without the executor (his surviving wife and the sole beneficiary) being aware...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 146 - Subsection 146(1) - Benefit - Paragraph (a) benefit includible in deceased annuitant’s return was not subject to "benefit"-(a) exclusion because it was not reported 312
Tax Topics - Income Tax Act - Section 146 - Subsection 146(8) s. 146(8) benefit paid to the taxpayer’s administrator was not includible in her income until the year she was identified and received the amount 377
Tax Topics - Income Tax Act - Section 146 - Subsection 146(4) - Paragraph 146(4)(c) tax imposed on RRSP under s. 146(4)(c) where RRSP issuer unaware of annuitant’s death 187
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Income-Producing Purpose fees incurred as a consequence of receiving unclaimed property (which was taxable under s. 146(8)) were non-deductible 205
Tax Topics - Income Tax Act - Section 9 - Timing receipt of income by an administrator was not income of the beneficial owner until the year she was identified 350

14 May 2019 CLHIA Roundtable Q. 3, 2019-0799111C6 - 2019 CLHIA Q3 - 3rd party RRSP contributions

CRA indicated that it is acceptable for an RRSP contribution to be received from a third party (i.e., drawn on a bank account other than the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 146 - Subsection 146(5) a 3rd party can make an RRSP contribution 162

2 April 2019 Internal T.I. 2016-0649821I7 F - Unclaimed superannuation or pension benefits

Although CRA usually applies its constructive receipt concepts in the context of employment income recognition, it has applied that concept to...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(a) - Subparagraph 56(1)(a)(i) subsequent year’s payment of benefit to a previously-unidentified beneficiary is only income in that year as an “in lieu of” pension amount 628

5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 10, 2018-0761551C6 F - Attribution rules and promissory note

Where a loan is made to a spouse at the prescribed interest rate, s. 74.5(2) requires that each year’s interest be “paid” by January 30 of...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 74.5 - Subsection 74.5(2) - Paragraph 74.5(2)(b) accrued interest cannot be “paid” for s. 74.7 purposes by issuing a promissory note 242

17 June 2014 External T.I. 2013-0506731E5 - Immigration

An individual shareholder immigrates to Canada, thereby becoming a Canadian resident. NRCo issues a $1,000 promissory note to her in...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 128.1 - Subsection 128.1(1) dividend receivable acquired on immigration 141
Tax Topics - Income Tax Act - Section 90 - Subsection 90(2) dividend not recognized until paid 180

24 November 2013 CTF Roundtable, 2013-0508151C6 - Upstream Loans

A loan or indebtedness will be considered to have been repaid by a debtor by way of set-off against a receivable of the debtor "if the set-off...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 90 - Subsection 90(8) - Paragraph 90(8)(a) repayment by set-off 75

30 January 2014 External T.I. 2013-0515761E5 F - Dividend received

A dividend of a taxable Canadian corporation owned by an individual is not paid in money but is recorded in its books as an increase in a loan...

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Tax Topics - Income Tax Act - Section 82 - Subsection 82(1) - Paragraph 82(1)(a) book entries are ancillary and do not establish receipt 175

11 December 2013 External T.I. 2013-0474161E5 - T-slips and dividend and interest

Respecting a question as to when dividends are paid and received for T5 purposes, CRA stated:

In Innovative Installation Inc. v The Queen, 2009...

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Tax Topics - Income Tax Act - Section 82 - Subsection 82(1) - Paragraph 82(1)(a) constructive receipt 98

7 October 2013 Internal T.I. 2013-0504081I7 F - Interaction between 55(2) and 40(1)(a)(iii)

Vendor sold blocks of shares in the capital of a corporation (the “Purchaser”) to the Purchaser, with the purchase price being payable over a...

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Tax Topics - Income Tax Act - Section 40 - Subsection 40(1) - Paragraph 40(1)(a) - Subparagraph 40(1)(a)(iii) reserve available for s. 55(2) gain on purchase for cancellation of shares where redemption proceeds payable on an earnout basis 268
Tax Topics - Income Tax Act - Section 55 - Subsection 55(2) s. 40(1)(a)(iii) reserve available where redemption proceeds payable on earnout basis 173

6 November 2012 External T.I. 2012-0452531E5 - Satisfactory Evidence of Payment

In response to a question as to whether "a demand note payable, which is accepted as absolute payment of salary owing to an employee, constitutes...

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13 June 2012 Internal T.I. 2012-0435351I7 F - SEPE - chèques en circulation

Are the cash assets of Opco reduced by the amount of issued and outstanding cheques that have not yet been cashed? CRA responded:

Under the civil...

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Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation outstanding and uncashed cheques did not reduce cash 145

4 July 2011 External T.I. 2011-0401991E5 F - CDA and life insurance proceeds

CRA stated:

In factual situations similar to the Innovative Installation case, the CRA will apply the position adopted by the Court in that...

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13 June 2012 External T.I. 2012-0435351E5 F

Cheques issued by Opco but not yet cashed would not reduce its cash on hand given that under the applicable law (the Quebec Civil Code), the...

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Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Small Business Corporation cheques not yet cashed 48

30 March 2011 External T.I. 2010-0390591E5 F - Cotisation spéciale

All the condo owners in a condo complex that was used only in a high-end commercial accommodation business leased their units to a manager for a...

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Tax Topics - Income Tax Act - Section 9 - Timing amounts assessed against the taxpayer by co-owners not deductible until expended on or in the business 219
Tax Topics - Income Tax Act - Section 248 - Subsection 248(16) - Paragraph 248(16)(a) - Subparagraph 248(16)(a)(i) addition for GST and subtraction for ITC 141

7 December 2010 External T.I. 2010-0363431E5 F - Date limite cotisation REER

In commenting on whether an RRSP premium is considered to have been paid within the first 60 days of a year, CRA stated:

In general, we consider a...

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Tax Topics - Income Tax Act - Section 146 - Subsection 146(5) 60-day contribution deadline is met based on receipt of cheque by issuer, not its deposit 122

21 July 2009 Internal T.I. 2009-0322591I7 F - Déduction des intérêts

The taxpayer purchased assets from the vendor (apparently, a non-resident) in consideration for shares of the taxpayer and interest-bearing debt,...

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Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition replacement of note and capitalized interest by new note with increased amount did not constitute payment by novation of the old debt 193
Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(b) issuance of replacement promissory note for amount of previous principal plus capitalized interest was not a crediting of such interest 151

25 March 2009 External T.I. 2008-0300401E5 F - Fiducie en faveur de soi-même - prêt sans intérêt

CRA indicated that an individual would be considered to be personally paying taxes of a trust that had made a s. 104(13.1) where he received...

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Tax Topics - Income Tax Act - Section 75 - Subsection 75(2) Howson applied to find that non-interest bearing loan by individual to his alter ego trust not subject to s. 75(2)/no contribution if individual pays trust taxes following a s. 104(13.1) election 181
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(13.1) s. 104(13.1) election generally available where no s. 75(2) application, which is not engaged by the individual’s payment of trust-level taxes 357
Tax Topics - Income Tax Act - Section 56 - Subsection 56(4.1) s. 56(4.1) inapplicable to NIB loan made by individual to his alter ego trust 139

21 April 2008 Internal T.I. 2007-0251761I7 F - Billet à payer

Debt owing to the taxpayer following an asset sale provided that interest may be added to the principal of the debt, which is what occurred. In...

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Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(d) addition of unpaid interest to principal did not establish a loan of that interest or a novation of the debt – so that interest on such capitalized interest non-deductible until paid 243
Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) addition of unpaid interest to principal was not a payment or crediting of the interest so as to engage Pt. XIII tax 109

14 June 2007 Internal T.I. 2007-0229311I7 F - Capital Dividend Account

After noting that payment of two back-to-back capital dividends (from “Subco” to “Parentco,” and form it to its individual shareholder)...

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Tax Topics - Income Tax Act - Section 89 - Subsection 89(1) - Capital Dividend Account - Paragraph (b) recording of dividend payable and dividend receivable between sub and parent was insufficient to constitute the payment of a capital dividend, so that there was no CDA addition 132
Tax Topics - Income Tax Act - Section 184 - Subsection 184(3) invalid payment of capital dividend (because no payment) was subject to Pt. III tax (given valid s. 83(2) election) for which no s. 184(3) election could be made as no payment 135
Tax Topics - General Concepts - Effective Date a declared dividend cannot be revoked 158

9 May 2006 Internal T.I. 2006-0176371I7 F - Bourses d'études ou d'entretien

CRA found that bursaries paid to Quebec students under the Program québécois de prêts et bourses (the Quebec loans and bursaries program) by...

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Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(n) payments (made by application against student loans) were “given to students who need financial assistance to continue their education” and, thus, were bursaries 81

17 February 2004 External T.I. 2003-0033915 - Cash pooling - shareholder benefit

In indicating that a cash pooling arrangement entered into by a Canadian subsidiary with its non-resident parent corporation could result in an...

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Tax Topics - Income Tax Act - Section 15 - Subsection 15(2.6) cash pooling with NR parent 77

IT-243R4, para 5

"A corporation is not considered to have paid a dividend when it merely credits a shareholder's account, unless the shareholder is able to...

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2 April 1998 Roundtable, E9722066 - PROMISSORY NOTE -WHETHER PAYMENT OF DEBT?

In finding that a cash-basis farmer realized income on the transfer of inventory for a promissory note, CRA stated:

Since the promissory note was...

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Tax Topics - Income Tax Act - Section 28 - Subsection 28(1) - Paragraph 28(1)(a) promissory note accepted as absolute payment for the transfer of inventory given that no remedy provided for non-payment 145

5 January 1996 CTF Roundtable Q. 31, 9523976 - GROSS-UP PAYMENTS

A gross-up on a debt obligation owing to a Canadian lender will be included in the Canadian lender's income under s. 9 or s. 12(1)(c) even "where...

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30 June 1995 Internal T.I. 9503907 - TAX STATUS OF CHEQUE RETURNED BY CASH METHOD FARMER?

A payment by cheque is equivalent to a payment in cash as long as no special circumstances lead to another conclusion, and the cheque is not...

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19 June 1995 Memorandum 950842 (C.T.O. "Patronage Dividends Paid by Non Co-ops")

Payment of a patronage dividend may be effected by the issuance of shares or debt instruments, where such an arrangement is authorized by the...

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7 May 1995 Internal T.I. 9510220 - PART I.3, O/S CHEQUES & OVERDRAFTS

Bank overdrafts are considered to have arisen to the extent that they have been utilized or drawn upon. For these purposes, RC, in common law...

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6 July 1994 Administrative Letter 9323826 F - Bonds Issued in Lieu of Interest

Bonds issued to a Canadian bank in settlement of arrears interest on a non-performing loan of a Brazilian debtor would not be considered to...

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1993 A.P.F.F. Round Table, Q.15

There is no repayment for the purposes of s. 20(1)(hh) when shares are converted to a debt security and the parties are in essentially the same...

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26 November 1992 T.I. 923506 (September 1993 Access Letter, p. 411, ¶C20-1161)

For farmers on the cash method, a post-dated cheque that is received on a date that a debt owing to the taxpayer is not yet payable will be...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 28 - Subsection 28(1) 59

31 August 1992 T.I. (Tax Window, No. 24, p. 8, ¶2184)

A direct payment by a non-resident to Revenue Canada of a tax liability of a related Canadian corporation would entail the receipt of an amount by...

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7 August 1992 T.I. 921752 (May 1993 Access Letter, p. 198, ¶C76-066)

Because the function of a journal entry is to record a transaction rather than to make it legally effective, the reclassification of a...

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28 July 1992 Memorandum 921859 (April 1993 Access Letter, p. 151, ¶C180-136)

A taxpayer is not considered to have "paid" interest on a loan owing by him to a charitable foundation by virtue only of journal entries being...

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15 June 1992 T.I. 921368 (December 1992 Access Letter, p. 18, ¶C56-208)

No payment will be considered to occur pursuant to an agreement between the parties to the effect that interest on a promissory note will be...

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Tax Topics - Income Tax Act - Section 74.5 - Subsection 74.5(1) 38

3 July 1991 Memorandum (Tax Window, No. 5, p. 22, ¶1335)

A journal entry recording a transfer of an amount from a salary payable account to a loan from shareholder account does not by itself constitute...

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5 July 1990 TI AC59710

Where a promissory note is given in consideration for services, the acceptance of the note would be considered to be an amount received under s....

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85 C.R. - Q.29

Constructive receipt by an employee benefit plan beneficiary occurs when an amount is made available to him without being subject to any...

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84 C.R. - Q.13

Under an unfunded deferred compensation plan, constructive receipt is considered to occur in situations where an amount is credited to an...

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IT-436R "Reserves - Where Promissory Notes are Included in Disposal Proceeds"

Where a promissory note has been accepted as absolute payment for the disposition of a property, no amount is due in respect of the disposition,...

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IT-168R2, para. 3-4

deferred remuneration should be included in income for the year in which the employee is entitled to receive it or actually receives it.

IT-305R3 "Establishment of Testamentary Spouse Trust"

In interpreting the requirement that the spouse must be entitled to receive all the income of a spouse trust that arises before the spouse's...

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Tax Topics - Income Tax Act - Section 70 - Subsection 70(6) 0

IT-196R2 "Payments by Employer to Employee"

A taxable payment is included in computing the employee's income on the earliest taxation year in which he receives it, absolute enjoyment or use...

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Tax Topics - Income Tax Act - Section 6 - Subsection 6(3) 0

Articles

Peter Lee, Paul Stepak, "PE Investments in Canadian Companies", draft 2017 CTF Annual Conference paper

Efficacy of payments by direction (p. 24)

[W]ires are often made directly from the source of the funds (e.g. the PE [private equity] fund capital...

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Kevin Bianchini, Reuben Abitbol, "Taxation of Stock Appreciation Rights", Taxation of Executive Compensation and Retirement (Federated Press), Vol. 24 No. 8, 2015, p.1655

Safe harbour until SAR vesting (p. 1656)

[T]he CRA has taken the position that until the employee has a right to exercise and cash in the SARs,...

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E.G. McKendrick, Chitty on Contracts, Vol. 1, Thirtieth Edition (2008).

Discharge by paying creditor's debt (§21-042, p. 1426)

If the creditor requests the debtor to pay the debt to a third party, such a payment is...

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C.R.B. Dunlop, Creditor-Debtor Law in Canada, Second Edition (1994).

Discharge by paying creditor's debt (pp. 20-1)

As a general rule, a debtor can discharge a debt only by payment to the creditor personally, ...

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Arnold, "Timing and Income Taxation: The Principles of Income Measurement for Tax Purposes", Canadian Tax Paper, No. 71, Canadian Tax Foundation, July 1983

See chapter 3 entitled "Cash Basis Accounting: The Concepts of Receipt and Payment".

Wilson, "Repayment of Shareholder Loans", 1995 Canadian Tax Journal, Vol. 43, No. 3, p. 746.

Includes (at pp. 751-754) a discussion of the Clayton rule.