Section 128.1

Subsection 128.1(1) - Immigration

Administrative Policy

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

An individual shareholder immigrates to Canada, thereby becoming a Canadian resident, and then receives $1,000 from a wholly-owned non-resident...

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Locations of other summaries Wordcount
Tax Topics - General Concepts - Payment & Receipt note satisfied dividend 83
Tax Topics - Income Tax Act - Section 90 - Subsection 90(2) dividend not recognized until paid 180

5 December 2013 External T.I. 2013-0485661E5 - U.K. ISA held by a temporary resident of Canada

A UK resident who opened up a a U.K. Investment Savings Account (ISA) which, as a Stock and Shares ISA, invested in shares of non-Canadian...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 128.1 - Subsection 128.1(4) - Paragraph 128.1(4)(b) UK ISA held while temporary Canadian resident 88

1999 APFF Round Table, Q. 1 (No. 9M19190)

Where an American citizen receives stock options from an American public corporation while working for it and living in the United States, and...

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Articles

Jack Bernstein, "Impact of Canada's Draft Tax Legislation on Taxpayer Migration", Tax Profile, Vol. 5, No. 30, February 1999, p. 341.

Jack Bernstein, "A Guide for the Emigrating Canadian Resident", 1993 Corporate Management Tax Conference Report, c. 12.

Lanthier, "Corporate Immigration, Emigration, and Continuance", 1993 Corporate Management Tax Conference Report, c. 4.

Richards, "Exit Tax: Corporate Emigration and a Continuance", Canadian Current Tax, August, 1993, p. J13.

Flatters, "Proposed Amendments Relating to Corporate Continuance and Residence", 1993 Canadian Tax Journal, No. 3, p. 567.

Paragraph 128.1(1)(b)

Administrative Policy

S3-F4-C1 - General Discussion of Capital Cost Allowance

Deemed acquisition

1.52 After 1992, where a taxpayer becomes a resident in Canada and owns depreciable property in a foreign country, pursuant to...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(b) - Capital Expenditure v. Expense - Improvements v. Repairs or Running Expense 556
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A 791
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Depreciable Property 218
Tax Topics - Income Tax Act - Section 16.1 - Subsection 16.1(1) 275
Tax Topics - Income Tax Act - Section 13 - Subsection 13(28) 254
Tax Topics - Income Tax Act - Section 13 - Subsection 13(27) 222
Tax Topics - Income Tax Act - Section 13 - Subsection 13(29) 155
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(2) 212
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(2.2) 351
Tax Topics - Income Tax Regulations - Regulation 1100 - Subsection 1100(3) 70
Tax Topics - Income Tax Act - Section 18 - Subsection 18(3.1) 166
Tax Topics - Income Tax Act - Section 13 - Subsection 13(7.5) 207
Tax Topics - Income Tax Act - Section 261 - Subsection 261(2) 65
Tax Topics - Income Tax Regulations - Regulation 1102 - Subsection 1102(1) - Paragraph 1102(1)(c) 170
Tax Topics - Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(e) 65
Tax Topics - Income Tax Act - Section 43 - Subsection 43(1) 152
Tax Topics - Income Tax Act - Section 68 197
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21.1) - Paragraph 13(21.1)(a) 75
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21.1) - Paragraph 13(21.1)(b) 212
Tax Topics - Income Tax Act - Section 13 - Subsection 13(1) 431
Tax Topics - Income Tax Act - Section 8 - Subsection 8(2) 75
Tax Topics - Income Tax Act - Section 20 - Subsection 20(16.1) 152
Tax Topics - Income Tax Act - Section 13 - Subsection 13(9) 229
Tax Topics - Income Tax Act - Section 152 - Subsection 152(4) 321
Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 8 237
Tax Topics - Income Tax Act - Section 13 - Subsection 13(5) 317
Tax Topics - Income Tax Act - Section 13 - Subsection 13(6) 221

30 September 2011 Internal T.I. 2011-0402871I7 - Taxation of accrued interest on immigration

What is the tax treatment of interest on an investment contract that accrued but was not payable while the individual was a non-resident, and the...

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30 October 2000 External T.I. 2000-0013255 - PRODUCT ISSUED BY FOREIGN INSURER

In responding to a query respecting a particular investment product acquired by a non-resident individual from a non-resident insurer where the...

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Subparagraph 128.1(1)(b)(iv)

Administrative Policy

14 May 2010 External T.I. 2009-0323151E5 F - Cross Border Stock Option

An individual, who had been granted stock options by Chinaco as an employee, immigrated to Canada to work for a Canadian affiliate at a time that...

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Paragraph 128.1(1)(c)

Cases

Landbouwbedrijf Backx B.V. v. Canada, 2019 FCA 310

When a Netherlands couple immigrated to Canada in 1998 to acquire a dairy farm here, they created a structure under which the farm was held in a...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 2 - Subsection 2(1) notwithstanding sole Netherlands director, decision-making was made by the shareholders in Canada 169
Tax Topics - Treaties - Income Tax Conventions - Article 4 potential relief under Dutch Treaty needed to be addressed even for mooted dual resident who had not been agreed by competent authorities to be a Dutch resident 313

See Also

Landbouwbedrijf Backx B.V. v. The Queen, 2021 TCC 2

When a Netherlands couple immigrated to Canada in 1998 to acquire a dairy farm here, they created a structure under which the farm was held in a...

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Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 4 Dutch legal expert testimony was required in order to establish dual corporate residency - and failure to engage competent authorities 632
Tax Topics - General Concepts - Estoppel Minister not precluded from reassessing contrary to initial acceptance of non-residency in returns as filed 109
Tax Topics - General Concepts - Evidence need to adduce expert legal evidence as to tax residency in foreign jurisdiction 88

Landbouwbedrijf Backx B.V. v. The Queen, 2018 TCC 142, confirmed on s. 2(1) grounds, remitted for reconsideration on s. 128.1(1)(c) and Treaty grounds 2019 FCA 310

When a Netherlands couple (the Backxes) immigrated to Canada in 1998 to acquire a dairy farm here, they created a structure under which the farm...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 2 - Subsection 2(1) the central management and control of a B.V. with a sole Dutch director was in Canada 319
Tax Topics - Treaties - Income Tax Conventions - Article 4 Netherlands corporation with central management and control in Canada was not resident in the Netherlands for Treaty purposes 443

Administrative Policy

17 February 2022 External T.I. 2021-0882401E5 - Immigration and foreign life insurance policy

At the time a non-resident individual immigrated to Canada, the individual owned shares of a non-resident corporation which was the policyholder...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 70 - Subsection 70(5.3) the CSV-valuation rule in s. 70(5.3) applies to a foreign life insurance policy of a non-resident corporation whose shares were held by an immigrating individual 178

Paragraph 128.1(1)(c.1)

Articles

Ron Choudhury, Neil Gurmukh, "Tax Issues on Immigration to Canada", Tax Topics (Wolters Kluwer), No. 2323, 15 September 2016, p. 1

Purposes of ss. 128.1(1)(c.1) and (c.2) (p. 3)

Paragraph 128.1(1)(c.1) provides for a deemed dividend to the immigrating corporation if the...

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Paragraph 128.1(1)(d)

Articles

Brian Kearl, Carl Deeprose, "Leaving Canada's New High Tax Rate Regime: Considerations, Tips and Traps", 2016 Conference Report (Canadian Tax Foundation),32:1-24

General effect of the s. 128.1(1)(d)(iii) limitation (p. 32:13)

[T]he emigrating individual may elect to expand the application of the deemed...

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Subsection 128.1(4) - Emigration

Administrative Policy

May 1999 CALU Conference No. 9908430 Q. 12

Discussion of guidelines for determining the circumstances in which RC will accept shares of a private company as security.

Articles

Firoz Talakshi, Patrick A. Jackman, "Corporate Migration: A Comparison of Canadian and US Income Tax Rules", 2001 Conference Report.

Cindy Rajan, "Are You Sure You Want To Leave Canada? The New Taxpayer Migration Rules", Personal Tax Planning, 1999 Canadian Tax Journal, Vol. 47, No. 5, p. 1342.

Lee, "Dear Departures", CA Magazine, November 1997, p. 26.

Parks, "New Departure Tax Rules and Related Proposals Create Problems", International Tax Planning, Vol. VI, No. 1, 1997, p. 373.

Couzin, "Departure Tax - Individuals", Bureau for International Fiscal Documentation, Vol. 49, No. 11, p. 532.

Bowman, "Sophisticated Estate-Planning Techniques: Cross-Border Dimensions", 1993 Conference Report, c. 38.

Paragraph 128.1(4)(b)

Administrative Policy

21 April 2015 External T.I. 2013-0494251E5 - 128.1(4) and Part XIII tax on future payments

At the time of his emigration from Canada to the US, "Mr. X" was entitled to the "Payments" from a Canadian resident who had purchased a client...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(v) client list utilization payments to U.S. resident 137
Tax Topics - Treaties - Income Tax Conventions - Article 12 client list utilization payments to U.S. resident 180

5 December 2013 External T.I. 2013-0485661E5 - U.K. ISA held by a temporary resident of Canada

A UK resident who opened up a a U.K. Investment Savings Account (ISA) which, as a Stock and Shares ISA, invested in shares of non-Canadian...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 128.1 - Subsection 128.1(1) step-up of shares in UK ISA 91

13 September 2012 CICA Roundtable Q. 7, 2012-0453111C6 - CICA Conference Q7 - Alter ego trust

In response to a query as to whether a taxpayer is deemed pursuant to s. 128.1(4)(b) to dispose of his or her interest in an alter-ego trust upon...

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17 November 2005 External T.I. 2005-0118101E5 F - Disposition réputée

A taxpayer was deemed to realize a capital loss pursuant to s. 128.1(4)(b) on ceasing to be resident in Canada, which would be a business...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(c) - Subparagraph 39(1)(c)(ii) no BIL can arise from a deemed disposition and reacquisition 77

15 December 2004 External T.I. 2004-0081411E5 F - Société étrangère

A resident individual (Mr. X), after owning for 10 years 60% of the shares of a foreign corporation earning all its income from foreign sources...

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 91 - Subsection 91(1) overview of FAPI rules/ rules in ss. 15(1), 56(2) or 246(1) apply in addition 53

Subsection 128.1(6) - Returning former resident

Paragraph 128.1(6)(c)

Administrative Policy

30 July 2015 External T.I. 2013-0494871E5 - Paragraph 128.1(6)(c)

A former resident of Canada (the "Individual") who had continuously owned shares of a corporation (the "Shares"). At the time of his emigration...

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Subsection 128.1(8) - Post-emigration loss

Administrative Policy

24 October 2013 External T.I. 2013-0486321E5 - Former taxable Canadian property and 128.1(8).

When Mr. X emigrated from Canada after 1 October 1996, he elected under s. 220(4.5) to defer the payment of the tax resulting from the deemed...

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Subsection 128.1(10) - Definitions

excluded right or interest

(c)

Administrative Policy

26 February 2014 External T.I. 2013-0487961E5 - Excluded Right or Interest

A senior employee of Canco, who is entitled to receive "free shares" from treasury as determined by management, with a vesting period of 4 to 6...

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Locations of other summaries Wordcount
Tax Topics - Treaties - Income Tax Conventions - Article 15 apportionment of stock option benefits based on situs of employment during vesting period 213