Subsection 82(1) - Taxable dividends received
See Also
Kufsky v. The Queen, 2019 TCC 254, aff'd 2022 FCA 66
In finding that a corporation should be treated as having paid dividends to its shareholder, so that CRA validly assessed the shareholder under s....
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| Tax Topics - Income Tax Act - Section 160 - Subsection 160(1) | a dividend that had not been declared nonetheless was a dividend for tax purposes | 418 |
Paragraph 82(1)(a)
Cases
De Groote v. The Queen, 85 DTC 5008, [1984] CTC 687 (FCTD)
The taxpayer sold the beneficial ownership of shares to, and executed a declaration of trust in favour of, a company controlled by him and then,...
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| Tax Topics - Income Tax Act - Section 56 - Subsection 56(2) | 49 | |
| Tax Topics - Income Tax Act - Section 56 - Subsection 56(4) | 94 |
Robson v. Minister of National Revenue, 52 DTC 1088, [1952] CTC 85, [1952] 2 S.C.R. 223
A corporation, which admittedly was seeking to effect a tax-free distribution of profits to its shareholders, sold shares of another corporation...
See Also
Trower v. The Queen, 2019 TCC 77 (Informal Procedure)
The taxpayer, Ms. Trower, separated from her husband in 2015 and ceased to be a shareholder and director of their company (“Cove” –...
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| Tax Topics - General Concepts - Effective Date | a dividend by a sole director could not be backdated to when there was another director | 220 |
Cooper v. The Queen, 2010 TCC 403, 2010 DTC 1277 [at at 3934] (Informal Procedure)
Webb J. noted that the gross-up amount will increase a taxpayer's income for the purposes of assessing a 163(1) penalty, because 163(1) calculates...
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| Tax Topics - Income Tax Act - Section 163 - Subsection 163(1) | 73 |
Horkoff v. The Queen, 97 DTC 621, [1996] 3 CTC 2737 (TCC)
Dividends that were purportedly paid to the taxpayers "as of" December 30, 1990 were dividend income to the taxpayers in their 1991 taxation years...
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| Tax Topics - General Concepts - Effective Date | "as of" dividends not effective until quantified and declared | 67 |
C.I.R. v. Trustees of Joseph Reid (1949), 30 TC 431 (HL)
In finding that a dividend paid by a South African company out of a capital gain realized by it was "income arising from possessions out of the...
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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| Tax Topics - General Concepts - Payment & Receipt | no constructive receipt | 210 |
Administrative Policy
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 - General Concepts - Payment & Receipt | book entries merely record and do not establish that a dividend was paid | 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 - General Concepts - Payment & Receipt | constructive receipt | 102 |
25 September 2013 External T.I. 2013-0488571E5 F - Repayment of a dividend
Where a taxpayer and his wife repay a portion of the dividends received by them in their 2006 taxation year, can the taxes on those dividends be...
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| Tax Topics - General Concepts - Effective Date | taxpayer generally cannot change his legal position through a subsequent board or shareholder resolution | 154 |
6 October 2005 External T.I. 2005-0146061E5 F - Coop de travailleurs actionnaire - montants versés
CRA indicated that interest received by a worker on preferred share shares held in a workers shareholder cooperative was a taxable dividend...
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| Tax Topics - Income Tax Act - Section 136 - Subsection 136(2) | workers shareholder cooperative qualified | 108 |
| Tax Topics - Income Tax Act - Section 135 - Subsection 135(4) - Allocation in Proportion to Patronage | patronage dividend based on volume of work performed | 108 |
Articles
Kevyn Nightingale, John Sorensen, "Backdating of Dividends", Tax Topics (Wolters Kluwer), No. 2392, January 11, 2018, p. 1
CRA distinction between evidencing and recharacterizing a transaction (p. 3)
[T]he CRA recognizes that a transaction may be "papered" after the...
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| Tax Topics - General Concepts - Effective Date | 419 |
Subsection 82(2)
Cases
Fiducie financière Satoma v. Canada, 2018 FCA 74
In support of his conclusion that where a dividend attributed to a trust was attributed under s. 75(2) to another person, the trust was not...
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| Tax Topics - Income Tax Act - Section 245 - Subsection 245(1) - Tax Benefit | tax benefit to trust from tax-free dividend even though not distributed to a beneficiary | 277 |
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | using ss. 75(2) and 112(1) for tax-free dividends to trust thwarted s. 112(1) object to tax earnings when ultimately distributed | 319 |
| Tax Topics - Income Tax Act - Section 3 | pervasive rule that the same income is not to be taxed in 2 persons’ hands | 148 |
| Tax Topics - Statutory Interpretation - Double Taxation/Deduction (Presumption Against) | inclusion of income in more than one taxpayer’s hands is contrary to s. 3 | 173 |
| Tax Topics - Income Tax Act - Section 112 - Subsection 112(1) | abusive to use s. 112(1) so as to avoid ultimate taxation of individuals | 180 |
| Tax Topics - Income Tax Act - Section 75 - Subsection 75(2) | use of s. 75(2) to access s. 112(1) deduction for dividend in fact received by family trust, was abusive | 286 |
Administrative Policy
15 June 2021 STEP Roundtable Q. 5, 2021-0883001C6 - Income Attribution from AET
The settlor of an alter ego trust contributes to the trust an interest in a limited partnership that generates business income. CRA indicated...
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| Tax Topics - Income Tax Act - Section 75 - Subsection 75(2) | "second generation income" is not subject to s. 75(2) attribution | 453 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(5) | substituted property rule does not apply to "second generation income" | 128 |
Subsection 82(3)
Administrative Policy
23 August 2021 Internal T.I. 2020-0856081I7 - Interaction of subsection 82(3) and section 120.4
CRA noted that “[g]enerally, there is an incentive for the higher income spouse to elect under subsection 82(3) as the increase in the spousal...
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| Tax Topics - Income Tax Act - Section 120.4 - Subsection 120.4(1) - Excluded Shares - Paragraph (b) | s. 82(3) deeming applies before application of TOSI rules | 259 |