Section 116

Subsection 116(1) - Disposition by non-resident person of certain property

See Also

Gambino v. The Queen, 2009 DTC 4, 2008 TCC 601 (Informal Procedure)

The endorsement to the taxpayer by her son of cheques from a disability insurer followed by her cashing those cheques and giving the cash to her...

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Administrative Policy

Guidance on international income tax issues raised by the COVID-19 crisis, CRA Webpage 31 March 2021

As the processing of s. 116 certificate requests was interrupted by the COVID-19 crisis and processing has only resumed with a “limited...

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2020 Ruling 2019-0799981R3 - Disposition – Reclassification and Stock Split

With a view to going public, a closely-held US corporation, whose issued and outstanding shares (which were taxable Canadian property and held by...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition a simultaneous consolidation of 7 identical series of common shares into 1 series, and a stock split, did not effect a disposition 288

21 November 2017 CTF Roundtable Q. 14, 2017-0724241C6 - Section 116 procedures for tax-deferred dispositions on foreign mergers

For foreign mergers occurring after September 15, 2016, will CRA accept elections of the new corporation and disposing predecessor foreign...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 87 - Subsection 87(8.5) requirements for letter election 89

S4-F7-C1 - Amalgamations of Canadian Corporations

1.82 Where the shares of a predecessor corporation were taxable Canadian property of a non-resident shareholder, the postamble to subsection...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 100 - Subsection 100(2.1) s. 100(2.1) applies to non-qualifying amalgamation 64
Tax Topics - Income Tax Act - Section 111 - Subsection 111(12) application following amalgamation 113
Tax Topics - Income Tax Act - Section 13 - Subsection 13(5.1) continuity of s. 13(5.1) on amalgamation 132
Tax Topics - Income Tax Act - Section 165 - Subsection 165(1) Amalco can continue objection and receive refunds 157
Tax Topics - Income Tax Act - Section 169 Amalco can continue objection 103
Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(n) reserve after amalgamation 62
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Shareholder shareholder need not hold shares 88
Tax Topics - Income Tax Act - Section 251 - Subsection 251(3.1) deemed non-arm's length relationship on amalgamation 172
Tax Topics - Income Tax Act - Section 256 - Subsection 256(7) - Paragraph 256(7)(b) related party, majority and 50% group exceptions 495
Tax Topics - Income Tax Act - Section 40 - Subsection 40(1) - Paragraph 40(1)(a) - Subparagraph 40(1)(a)(iii) reserve after amalgamation 62
Tax Topics - Income Tax Act - Section 66.7 - Subsection 66.7(7) successoring where non-wholly owned amalgamation 109
Tax Topics - Income Tax Act - Section 69 - Subsection 69(13) no disposition of predecessor property on general principles 113
Tax Topics - Income Tax Act - Section 7 - Subsection 7(1.4) s. 87(5) not applicable 112
Tax Topics - Income Tax Act - Section 80.01 - Subsection 80.01(3) non-87 amalgamation/no FX gain 165
Tax Topics - Income Tax Act - Section 84 - Subsection 84(3) no deemed dividend to dissenter on amalgamation 87
Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) election filing by Amalco 109
Tax Topics - Income Tax Act - Section 87 - Subsection 87(1.1) s. 87(1.1) qualifies for all s. 87 purposes 66
Tax Topics - Income Tax Act - Section 87 - Subsection 87(1.2) successoring where non-wholly owned amalgamation 109
Tax Topics - Income Tax Act - Section 87 - Subsection 87(10) deemed listing of temporary Amalco shares 120
Tax Topics - Income Tax Act - Section 87 - Subsection 87(11) gain if high PUC is sub shares 55
Tax Topics - Income Tax Act - Section 87 - Subsection 87(1) presumptive satisfaction of s. 87(1)(a)/dissent and squeeze-outs onside 297
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(a) new corp/deemed year end coinciding or not with acquisition of control 758
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(b) Amalco must follow predecessor's valuation method subject to truer picture doctrine 64
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(c) reserve after amalgamation 113
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(d) cost amount carryover 149
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(e.1) s. 100(2.1) applies to non-qualifying amalgamation 64
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(o) no continuity rule for non-security options 139
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2) - Paragraph 87(2)(q) pre-amalgamation services 106
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2.11) loss-carry back to parent 169
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2.1) dovetailing with s. 88(1.1) 44
Tax Topics - Income Tax Act - Section 87 - Subsection 87(3.1) 346
Tax Topics - Income Tax Act - Section 87 - Subsection 87(3) PUC shifts 189
Tax Topics - Income Tax Act - Section 87 - Subsection 87(4) fractional share cash/ACB or value shift/implied non-recognition for predecessor shares 281
Tax Topics - Income Tax Act - Section 87 - Subsection 87(7) dovetailing with s. 78 and 112(12) 191
Tax Topics - Income Tax Act - Section 87 - Subsection 87(9) allocation of s. 87(9)(c)(ii) excess as parent chooses 230
Tax Topics - Income Tax Act - Section 88 - Subsection 88(1) - Paragraph 88(1)(d) late designation 122
Tax Topics - Income Tax Act - Section 88 - Subsection 88(1.1) dovetailing with s. 87(2.1) 62
Tax Topics - Income Tax Act - Section 98 - Subsection 98(5) partnership dissolution on amalgamation 137
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(2.2) deemed non-arm's length relationship on amalgamation 467
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(2) deemed non-arm's length relationship on amalgamation 371
Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(14) class continuity on non-arm's length amalgamation 327
Tax Topics - Income Tax Regulations - Regulation 8503 - Subsection 8503(3) - Paragraph 8503(3)(b) pre-amalgamation services 106
Tax Topics - Income Tax Act - Section 249 - Subsection 249(3) 136
Tax Topics - Income Tax Act - Section 22 - Subsection 22(1) 179

4 December 2013 Internal T.I. 2013-0489051I7 - Personal-Use-Property & Article XIII(9)

A U.S. resident owned vacant land in Canada from before September 26, 1980 and after that date built a cottage thereon. CRA found:

If the cottage...

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Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 13 personal-use land and building are one property 133

19 March 2013 Internal T.I. 2010-0385931I7 - Taxable Canadian property and Partnerships

A partnership is disposing of its 25% shareholding of a listed public corporation ("Pubco"). Those shares derived more than 50% of their fair...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Taxable Canadian Property - Paragraph (e) TCP rules not applying to foreign partners of partnership 278
Tax Topics - Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(f) partnership TCP gain but not TCP status attributed to partners 88

4 January 2013 External T.I. 2012-0448681E5 - s. 116 req. of NR-estates per draft NRT legis.

CRA was asked whether a s. 116 certificate was required when an estate with American resident executors disposed of taxable Canadian property to...

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29 March 2012 External T.I. 2010-0385771E5 - Taxation of an Estate

In the course of a general response respecting the obligations of a Canadian estate with Polish beneficiaries, CRA indicated that when the estate...

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3 December 2012 External T.I. 2012-0457741E5 - Disposition of taxable Canadian property

Respecting a question as to whether the amalgamation of two non-resident corporations holding the shares of a Canadian subsidiary would be a...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition non s. 87 amalgamation 155

17 May 2012 IFA Roundtable, 2012-0444081C6 - 2012 IFA Seminar - Question 4

Respecting a disposition of taxable Canadian property by a widely-held partnership, or by a multi-tier partnerships where it is not possible to...

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11 October 2012 External T.I. 2011-0429021E5 - Administrative Position subsections 87(4)/116

IT-474R2, para. 45 provides that a non-resident who by virtue of s. 87(4) disposes of shares which are taxable Canadian property is not required...

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8 October 2010 Roundtable, 2010-0373401C6 F - Fiducies et ajout d'un bénéficiaire

After indicating that a court-approved addition of a beneficiary to a fully-discretionary resident trust will result either in a part disposition...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition court-approved addition of a beneficiary will result either in a part disposition of trust interests, or a constructive dissolution and resettlement of the discretionary trust 325

9 February 2010 Internal T.I. 2009-0333571I7 F - Paragraphe 7(1.5) - contrepartie reçue

Employees of a Canadian-controlled private corporation then exercised their options to acquire shares of their employer (Corporation A), and then...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 7 - Subsection 7(1.5) s. 7(1.5) rollover where employees exchanged specific s. 7(1.1) shares for shares of grandparent, even though they also received cash and PUC distribution 454
Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(j) ACB increased by s. 7(1) benefit that had not yet been triggered due to s. 7(1.5) rollover 276
Tax Topics - Income Tax Act - Section 7 - Subsection 7(1.4) non-resident ex-employees will be required to recognize s. 7 benefit deferred by s. 7(1.5) when they dispose of the shares acquired in exchange 148

24 February 2003 External T.I. 2002-014995

There is no basis for extending the administrative practice in IT-474 (allowing a taxpayer not to comply with the procedure set out in section 116...

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1993 A.P.F.F. Round Table, Q. 25

S.116 would not normally apply in a situation where a capital gain arises under s. 40(3) on a distribution of paid-up capital to a U.S. resident.

Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 13 43

24 September 1992 T.I. (Tax Window, No. 24, p. 13, ¶2181)

Where a non-resident redeems shares of a corporation with which it does not deal at arm's length giving rise to a deemed dividend under s. 84(3),...

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Articles

Steve Suarez, Maire-Eve Gosselin, "Canada's Section 116 System for Nonresident Vendors of Taxable Canadian Property", Tax Notes International,9 April 2012, p. 175

Detailed discussion of application procedure and considerations.

Kevin Scott, S. Sebastian Elawny, "Estate Distributions to Non-Residents", CCH Tax Topics, No. 1911, 23 October 2008, p. 1.

Jack Bernstein, "Why Canada Should End the Roadblock to Foreign Private Equity", Tax Notes International, 46/9 May 28, 2007.

Subsection 116(2) - Certificate in respect of proposed disposition

Cases

MNR v. Morris, 2010 DTC 5013 [at 6575]

A decision of the Federal Court below to require the Minister to provide the taxpayer (a trust that allegedly was resident in Barbados for...

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Morris v. Canada (National Revenue), 2009 FC 434

The applicant taxpayers were entitled to a binding ruling from the Minister that the shares disposed of by a Barbados trust were treaty-exempt (so...

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Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 4 104

Administrative Policy

25 June 2014 External T.I. 2012-0465221E5 - Trust distributions to non-residents

Respecting a question as to whether filing of form T2062 by a trust resident in Canada in respect of a distribution to a non-resident beneficiary...

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1992 A.P.F.F. Annual Conference, Q. 23 (January - February 1993 Access Letter, p. 59)

RC will accept, in lieu of security under s. 116(2)(b), a letter outlining the computation of the expected amount of any capital gain, including...

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1992 A.P.F.F. Annual Conference, Q. 13 (January - February 1993 Access Letter, p. 55)

The requirements of s. 116 must be complied with even in the case of a capital reorganization described in s. 86.

90 C.P.T.J. - Q.28

If a non-resident requests a certificate of compliance as the result of an election in respect of a transfer under s. 85(1), RC will not issue the...

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87 C.R. - Q.79

A bank guarantee, mortgage or deposit agreement enforceable in Canada normally would be considered as acceptable security.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 48 - Subsection 48(1) 25

87 C.R. - Q.87

Where a partnership containing a large number of partners is disposing of taxable Canadian property, RC is prepared to accept one form T2062...

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87 C.R. - Q.90

Tax returns, where available, provide very reliable evidence of an individual's residence status.

86 C.R. - Q.89

Where shares derive their value principally from real estate, and a new-style treaty governs, then a payment on account of tax or acceptable...

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IT-150R2 "Acquisition from a Non-Resident of Certain Property on Death or Mortgage Foreclosure or by Virtue of a Deemed Disposition" /p>

IC 72-17R4 "Procedures concerning the disposition of taxable Canadian property by non-residents of Canada - Section 116"

Subsection 116(3) - Notice to Minister

See Also

Lipson v. The Queen, 2012 DTC 1064 [at 2796], 2012 TCC 20

The taxpayers received a number of capital distributions from the liquidator of their mother's "succession" (a Quebec estate), but only filed a...

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Serge Côté Family Trust v. Canada (Attorney General), 2010 DTC 5071 [at 6798], 2009 FC 698

The taxpayer, a non-resident family trust, transferred assets to a corporation owned by the trustee. It filed an election form (T2057) but...

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Administrative Policy

7 October 2021 APFF Roundtable Q. 16, 2021-0901061C6 F - 2021 APFF Q.16 - Disclosure of a counter letter

Where there is a disposition of taxable Canadian property by a non-resident acting solely as nominee for the beneficial owner, who is a Canadian...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) - Paragraph 152(4)(a) - Subparagraph 152(4)(a)(i) failure to disclose a counter agreement is neglect or carelessness 196

30 May 2018 External T.I. 2017-0717981E5 - Clearance certificate for a non-resident

A former resident of Canada (and after her death, her non-resident estate, which had exclusively non-resident beneficiaries) received CPP,...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 159 - Subsection 159(2) executors of non-resident estates that could have Canadian tax liabilities to apply for a clearance certificate 174

17 February 2014 Internal T.I. 2013-0498121I7 - Follow up to XXXXXXXXXX

During a Canadian posting, a diplomat purchased a property in another city for his adult child, and then sold it to the child (without applying...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 162 - Subsection 162(7) diplomatic exemption/discretion if property sold at loss 129

25 September 2013 External T.I. 2013-0485751E5 F - Rescinding 45(2) election by a non-resident

If a non-resident holding Canadian real estate rescinds, in a subsequent taxation year, a s. 45(2) election that was made with respect to the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 45 - Subsection 45(2) deemed dispositin on 1st day of revocation year triggers s. 116(3) filing 157

Subsection 116(4) - Certificate in respect of property disposed of

See Also

Corporation A.A.A. S.A. v. MNR, 92 DTC 1805, [1992] 1 CTC 2476 (TCC)

The non-resident taxpayer, which was late in filing a return reporting a capital gain on its disposition of taxable Canadian property, was...

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Administrative Policy

17 February 2017 External T.I. 2015-0602781E5 - Disposition of farm property by a non-resident

A resident of Germany will gift her shares, each qualifying as a “share of the capital stock of a family farm or fishing corporation” under s....

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Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 13 shares of Cdn farm are excluded from immovable property under Canada-Germany Treaty 144
Tax Topics - Income Tax Act - Section 116 - Subsection 116(6.1) failure to file notice within 30 days 150

8 May 1995 External T.I. 9504015 - MEANING OF TAX CND PTY (SHARES HELD AS INVENTORY)

Notwithstanding that s. 116 does not apply to shares held as inventory, RC generally will issue a certificate if it is satisfied that no Part I...

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Subsection 116(5) - Liability of purchaser

Cases

Coast Capital Savings Credit Union v. Canada, 2016 FCA 181

The applicant (“Coast Capital”), which was the trustee of RRSPs and RRIFs, was assessed under s. 116(5) for failure to withhold on its...

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Words and Phrases
cost
Locations of other summaries Wordcount
Tax Topics - General Concepts - Sham deceit of taxpayer was irrelevant to assessment – so that “sham” also was irrelevant 282
Tax Topics - Income Tax Act - Section 54 - Adjusted Cost Base no bifurcation of inflated purchase price between FMV cost and benefit conferral 142

Olympia Trust Company v. Canada, 2015 FCA 279

The Minister assessed the appellant trust company under s. 116(5) for its failure to withhold from the purchase price paid by self-directed RRSP...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(2) fictitious s. 104(2) trust is not the purchaser 118
Tax Topics - General Concepts - Evidence contract informed by surrounding circumstances 59

See Also

1074022 B.C. Ltd. v Li, 2020 BCSC 65

On a court-approved sale (arising in connection with foreclosure proceedings) of a Vancouver property owned by a resident of Hong Kong (Mr. Li),...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 164 - Subsection 164(1) CRA could be directed to pay an excess s. 116 remittance to the taxpayer’s secured creditors 351

Kau v. The Queen, 2018 TCC 156

In 2011, the taxpayer entered into an agreement to purchase a Toronto condominium, and retained an Ontario lawyer, Mr. E. Zou, to handle this real...

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Scotia Mortgage Corporation v Gladu, 2017 BCSC 1182

Two banks which had foreclosed on properties of non-resident debtors, petitioned the B.C. Supreme Court for a declaration that a purchaser of the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 220 - Subsection 220(1) no jurisdiction to declare that a vendor was a Canadian resident for s. 116 purposes 265

Coast Capital Savings Credit Union v. The Queen, 2015 TCC 195, aff'd 2016 FCA 181

The trustee of RRSPs was duped into purchasing shares of Canadian companies from offshore entities at a price substantially in excess of their...

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Locations of other summaries Wordcount
Tax Topics - General Concepts - Sham sham may be pleaded only by the Minister 227

Olympia Trust Company v. The Queen, 2014 TCC 372, aff'd 2015 DTC 5134 [at 6411], 2015 FCA 279

The Minister assessed the appellant trust company under s. 116(5) for its failure to withhold from the purchase price paid by self-directed RRSP...

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Locations of other summaries Wordcount
Tax Topics - General Concepts - Ownership RRSP trustee, not annuitant, was the "purchaser" 144

Administrative Policy

27 October 2020 CTF Roundtable Q. 4, 2020-0862451C6 - Sale of TCP by a partnership

CRA’s practice of accepting a consolidated s. 116 certificate request from a partnership disposing of taxable Canadian property (rather than...

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9 August 2017 External T.I. 2017-0709351E5 - Interaction between subsections 98(1) and 116(5)

Where a partnership has ceased to exist, any negative adjusted cost base to a taxpayer (including a non-resident) of its partnership interest at...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 98 - Subsection 98(1) - Paragraph 98(1)(c) a negative ACB gain from a partnership interest that is TCP is not subject to s. 116 121

May 2016 Alberta CPA Roundtable, Q.14

How is a s. 116(5) or (5.3) remittance to be paid where the vendor has not filed a T2062? CRA responded:

The purchaser is not required to provide...

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16 March 2015 Internal T.I. 2013-0479861I7 - Section 116 & forfeited deposits on real property

A non-resident vendor received a deposit under an agreement for sale of B.C. real property, which will be forfeited to it due to failure of the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition - Paragraph (b) forfeited sale deposit was proceeds 79
Tax Topics - Income Tax Act - Section 248 - Subsection 248(4) forfeited sale deposit was proceeds of security interest rather than of tcp 264

2 June 2011 External T.I. 2011-0399501E5 - TCP distributed by N/R trust to N/R beneficiary

A non-resident inter vivos trust distributes its shares of a private Canadian real estate corporation (Canco) in satisfaction of the capital...

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10 February 2011 External T.I. 2010-0387151E5 - Deemed Disposition of Shares by a Non-Resident

On the redemption of shares of a non-resident which are taxable Canadian property, any resulting deemed dividend that is subject to Part XIII tax...

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12 June 2009 External T.I. 2008-0301701E5 - Redemption of shares

Where a Canadian corporation redeems its shares for an amount in excess of paid-up capital, its liability under s. 116(5) will not be reduced by...

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21 September 2006 Internal T.I. 2006-0201651I7 - Disposition of Taxable Canadian Property ("TCP")

Taxable Canadian property of a non-resident was expropriated by a municipality and the non-resident was paid compensation. However, the...

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28 November 2001 Internal T.I. 2001-0091247 - Employer Stock Opt. & Section 116116(5)

S.49(3) did not apply to deem the exercise of employee stock options held by a non-resident former employee to not be a disposition of the...

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6 February 1997 External T.I. 9626625 - SECTION 116 - JOINT TENANCY

Where property is held by a non-resident and a resident in joint tenancy, the s. 116 certificate limit should be for half the proceeds of...

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12 February 1997 External T.I. 9631575 - INTERACTION OF SECTIONS 51 AND 116

A non-resident exchanged pursuant to s. 51(1) his common shares (which were taxable Canadian property) of a Canadian private corporation for...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 51 - Subsection 51(1) s. 51(1) does not deem the issuer not to have acquired the exchanged share 97
Tax Topics - Income Tax Act - Section 54 - Adjusted Cost Base cost of shares acquired by issuer on s. 51(1) exchange is stated capital of new shares 141

11 October 1996 T.I. 963371 (C.T.O. "Sec 116 Exercise of Power of Sale Non-Resident Mortgagee")

"It is our understanding that where a mortgagee exercises a power of sale, pursuant to the terms of the mortgage, a court order or the provisions...

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24 May 1995 External T.I. 9501345 - SECTION 116 - POWER OF SALE

"Where a mortgagee exercises a power of sale pursuant to the terms of the mortgage, a court order or the provisions of the relevant Mortgage Act,...

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5 April 1995 External T.I. 9431435 - FORECLOSURE AND 116(5)

Where a mortgagee acquires property by means of an order of foreclosure, no amount passes to the mortgagee because neither the mortgage nor the...

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1 March 1995 External T.I. 5-940226

"The provisions of section 116 of the Act apply to the redemption of a share of the capital stock of a corporation held by a non-resident if the...

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October 1989 Revenue Canada Round Table - Q.16 (Jan. 90 Access Letter, ¶1075)

Although RC acknowledges that the definition of taxable Canadian property does not include inventory, RC will not rule prior to the end of the...

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88 C.R. - Q.6

Provided the creditor does not obtain title to the property, liability for tax under s. 116(5) or (5.3) does not extend to a mortgagee where the...

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84 C.R. - Q.39

Since the liability of the purchaser is computed by reference to the "cost" to it of the property, such liability is not affected by the fact that...

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Articles

Vivien Morgan, "CRA on Section 116", Canadian Tax Highlights, Vol. 17, No. 9, September, 2009, p. 9.

Gabrielle M.R. Richards, "Capital Financing by Non-Residents: Section 116 Obligations", Corporate Structures and Groups, Vol. VII, No. 3, 2002, p. 375

CCRA is of the view that the cost for purposes of s. 116(5)(c) of shares acquired pursuant to a convertible share is the amount credited to the...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 51 - Subsection 51(1) 36

Paragraph 116(5)(a)

Administrative Policy

25 August 2017 External T.I. 2017-0703351E5 - Paragraph 116(5)(a) - reasonable inquiry

Will the reasonable inquiry requirement in s. 116(5)(a) be satisfied in an arm’s length real estate purchase if the purchaser obtains a...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 116 - Subsection 116(5.3) statutory declaration sufficient if no negative markers 92

Subsection 116(5.02)

Administrative Policy

2020 Ruling 2019-0801011R3 - Article 13(4) of the Treaty

CRA ruled that the gifting by a non-resident of Canada, who was a resident of a redacted country for purposes of Art. 4(1) of the Treaty with that...

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Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 13 a Treaty exempted the gain on the sale of a non-resident holding company holding Canadian vacant land 221

Subsection 116(5.2) - Certificates for dispositions

Administrative Policy

90 C.R. - Q59

RC is reviewing its practice that two notices (T2062 for capital property and T2062A for depreciable property) are required for the disposition of...

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89 C.P.T.J. - Q2

Non-resident federal tax rates must be used for individuals, and 36% for corporations.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 116 - Subsection 116(5.3) 46

Subsection 116(5.3) - Liability of purchaser in certain cases

Administrative Policy

25 August 2017 External T.I. 2017-0703351E5 - Paragraph 116(5)(a) - reasonable inquiry

When asked whether the reasonable inquiry requirement was met if the purchaser obtains a statutory declaration from the vendor that the vendor is...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 116 - Subsection 116(5) - Paragraph 116(5)(a) in the absence of counter indicators, a statutory declaration of residence is sufficient 170

29 January 2013 External T.I. 2012-0470331E5 - S.116 - Qualified Business Exemption

After noting that, as per IC72-17R6, para. 36, CRA provides an exemption for land held in inventory pursuant to which the vendor can request a...

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25 October 1993 Income Tax Severed Letter 9324605 - Foreclosure Action Instituted by Mortgagee

RC's views concerning a mortgagee instituting a foreclosure action apply in all jurisdictions in Canada, whether the mortgage is registered under...

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89 C.P.T.J. - Q2

Where either the non-resident vendor or the purchaser are remitting funds on account for the non-resident's future liability, the payment should...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 116 - Subsection 116(5.2) 12

81 C.R. - Q.19

RC administers the requirement to withhold 50% strictly.

Where a non-resident has failed to obtain a s. 116 certificate on a transfer to its...

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Subsection 116(5.01) - Treaty-protected property

Articles

Steve Suarez, Maire-Eve Gosselin, "Canada's Section 116 System for Nonresident Vendors of Taxable Canadian Property", Tax Notes International,9 April 2012, p. 175

Detailed discussion of limitations on the defence.

Michael N. Kandev, Fred Purkey, "Practical Troubles With the Disposition of Canadian-Situs Property by Nonresidents of Canada", Practitoner's Corner, Tax Notes International, 12 September 2011, p. 807.

Rhonda Rudick, "No Section 116 Safe Harbour", Tax Topics, 12 May 2011, No. 2044, p. 1

The author at CRA of Doc. No. 2008-0289051E5 dated 4 January 2011 orally indicated that notwithstanding the view expressed at the 2009 ICAA/CRA...

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Subsection 116(6.1) - Treaty-exempt property

Administrative Policy

17 February 2017 External T.I. 2015-0602781E5 - Disposition of farm property by a non-resident

The s. 73(4.1) rollover applies to a gift by a German resident of her shares of a family farm corporation to her son. The shares likely are...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 116 - Subsection 116(4) CRA may accept a T2062 showing deemed s. 73(4.1) rollover proceeds 297
Tax Topics - Treaties - Income Tax Conventions - Article 13 shares of Cdn farm are excluded from immovable property under Canada-Germany Treaty 144

2012 Ruling 2011-0429961R3 - Hydrocarbon & Immovable property: Canada-UK Treaty

Ruling that the transfer of shares of a UK company (Forco2) by two other UK companies (Forco1 and Forco4) would be exempt under Art. XIII, para. 8...

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