Subsection 84.1(1) - Non-arm’s length sale of shares
Cases
Wild v. Canada (Attorney General), 2018 FCA 114
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| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | surplus-stripping transactions were not subject to GAAR before the surplus had in fact been stripped | 377 |
Fiducie famille Gauthier v. Canada, 2012 FCA 76, aff'g 2011 DTC 1343 [at 1917], 2011 TCC 318
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| Locations of other summaries | Wordcount | |
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| Tax Topics - General Concepts - Fair Market Value - Shares | 258 |
See Also
Crean v Canada (Attorney General), 2019 BCSC 146
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| Tax Topics - General Concepts - Rectification & Rescission | a sale agreement rectified to turn it into a 2-step sale that no longer generated a s. 84.1 dividend | 301 |
1245989 Alberta Ltd. v. The Queen, 2017 TCC 51, rev'd sub nom. Wild v. Canada, 2018 FCA 114
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| Locations of other summaries | Wordcount | |
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| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | use of PUC-averaging rule to bump outside PUC was abusive | 273 |
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(5) | assessment of PUC without current income effect | 34 |
Poulin v. The Queen, 2016 TCC 154, briefly aff’d sub nomine Turgeon v. The Queen, 2017 FCA 103
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| Locations of other summaries | Wordcount | |
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| Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) | sale to the special-purpose Holdco of an independent employee was essentially a surplus-stripping transaction rather than an arm’s length sale | 635 |
Fiducie Famille Gauthier v. The Queen, 2011 DTC 1343 [at 1917], 2011 TCC 318, aff'd 2012 FCA 76
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Words and Phrases
consideration| Locations of other summaries | Wordcount | |
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| Tax Topics - General Concepts - Substance | 233 |
Estate of the late Donald Mills v. The Queen, 2010 DTC 1301 [at 4078], 2010 TCC 443, aff'd 2011 DTC 5124, 2011 FCA 219
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| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(p) - Subparagraph 20(1)(p)(i) | no bad debt if deemed dividend | 77 |
McMullen v. The Queen, 2007 DTC 286, 2007 TCC 16
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| Locations of other summaries | Wordcount | |
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| Tax Topics - Income Tax Act - Section 245 - Subsection 245(3) | 270 | |
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | 198 | |
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) | mutual benefit and same advisors insufficient to establish non-arm's length in structured sale transaction | 257 |
| Tax Topics - Income Tax Act - Section 84 - Subsection 84(2) | 229 |
Lloyd v. The Queen, 2002 DTC 1493 (TCC)
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| Locations of other summaries | Wordcount | |
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| Tax Topics - General Concepts - Effective Date | taxpayer can attack own transaction as legally ineffective | 130 |
| Tax Topics - General Concepts - Tax Avoidance | taxapyer can argue legally ineffective transactions | 131 |
| Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 1 - Paragraph 1(q) | 64 |
Administrative Policy
7 July 2010 External T.I. 2010-0370611E5 F - Purchase of Shares by Subsidiary - Sec. 245
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| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | position that an individual potentially can realize a capital gain by selling shares to a Newco sub of the corporation for cash does not depend on there being a s. 87 or 88 merger of Newco and the corporation | 264 |
1 October 2010 External T.I. 2010-0378681E5 F - Déduction pour gain en capital
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29 November 2016 CTF Roundtable Q. 6, 2016-0669661C6 - 84.1 and the Poulin/Turgeon Case
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| Tax Topics - Income Tax Act - Section 118.1 - Subsection 118.1(1) - Total Charitable Gifts - Paragraph (c) - Subparagraph (c)(ii) | right of GREs to carry forward donations for five years | 109 |
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) | touchstones for accommodation party | 184 |
7 October 2016 APFF Roundtable Q. 20, 2016-0655831C6 F - Employee Buycos and the Poulin Case
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| Locations of other summaries | Wordcount | |
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| Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) | Poulin distinction between accommodation parties and tax advantaged arm’s length dealings accepted | 188 |
2 May 2016 External T.I. 2016-0633351E5 F - Descarries Case and Document no. 2015-0610711C6
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| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | Descarries not to be construed narrowly | 176 |
24 November 2015 CTF Roundtable Q. 11, 2015-0610711C6 - Impact of the Descarries decision
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| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | contrary to GAAR to use basis stepped up under CGD to create a capital loss permitting surplus extraction | 494 |
2014 Ruling 2014-0526361R3 F - Post Mortem Pipeline
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| Locations of other summaries | Wordcount | |
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| Tax Topics - Income Tax Act - Section 84 - Subsection 84(2) | step up of PUC of freeze pref shares for purposes of pipeline transaction | 315 |
25 November 2012 CTF Roundtable, 2013-0479402C6 - Employee Buycos - comments from CRA Panel
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| Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) | stock option share Buyco not at arm's length | 202 |
3 July 2012 External T.I. 2012-0443421E5 F - 84.1 and partnership
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| Locations of other summaries | Wordcount | |
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| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | s. 245(2) has been applied to the use of a partnership to avoid s. 84.1 | 536 |
7 October 2011 Roundtable, 2011-0412121C6 F - Interaction between S. 84.1 and S. 85(2.1)
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Words and Phrases
apply| Locations of other summaries | Wordcount | |
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| Tax Topics - Income Tax Act - Section 85 - Subsection 85(2.1) | s. 85(2.1) does not apply where s. 84.1(1) applies even if there is no grind under the s. 84.1(1)(a) formula | 166 |
5 October 2007 APFF Roundtable Q. 10, 2007-0243171C6 F - Surplus Stripping
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| Locations of other summaries | Wordcount | |
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| Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) | leveraged Employeeco buyout could be an arm’s length transaction | 127 |
12 January 2005 External T.I. 2004-0106161E5 - Application of par. 84.1(1)(b) on a sale of shares
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9 January 2004 External T.I. 2003-0037425 - Application of Section 84.1
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28 March 2003 External T.I. 2002-016665 -
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|---|---|---|
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) | 145 |
4 November 1998 External T.I. 9801695 - WHETHER A PARTNERSHIP IS A TAXPAYER
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23 December 1993 External T.I. 9326885 F - "FACTUAL" ARM'S LENGH NATURE
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1993 A.P.F.F. Round Table Q. 4
29 January 1990 T.I. (June 1990 Access Letter, ¶1264)
18 December 1989 T.I. (May 1990 Access Letter, ¶1220)
October 1989 Revenue Canada Round Table - Q.11 (Jan. 90 Access Letter, ¶1075)
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| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | 48 | |
| Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) | 73 |
18 Aug. 89 T.I. (Jan. 90 Access Letter, ¶1082)
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| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(2.1) | 67 | |
| Tax Topics - Income Tax Act - Section 84 - Subsection 84(5) | 87 |
Articles
Anthony Strawson, Timothy P. Kirby, "Vendor Planning for Private Corporations: Select Issues", 2017 Conference Report, (Canadian Tax Foundation), 11:1-28
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David Wilkenfeld, "Section 84.2 Update", Tax for The Owner-Manager, Vol. 2, No. 1, January 2002.
Paragraph 84.1(1)(b)
Administrative Policy
11 October 2019 APFF Roundtable Q. 1, 2019-0819401C6 F - Interaction between par. 84.1(1)(b) and 129(1(a)
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| Locations of other summaries | Wordcount | |
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| Tax Topics - Income Tax Act - Section 129 - Subsection 129(1) | reversal of position that s. 84.1(1)(b) dividends do not generate dividend refunds | 144 |
25 November 2012 Roundtable, 2013-0479401C6 F - Employés et Achat Ltée commentaires panel ARC
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| Locations of other summaries | Wordcount | |
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| Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) | Buyco that is formed by employer to purchases departing employees’ shares is NAL | 118 |
5 October 2012 APFF Roundtable, 2012-0454091C6 F - GRIP and deemed dividend pursuant to 84.1(1)(b)
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| Locations of other summaries | Wordcount | |
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| Tax Topics - Income Tax Act - Section 89 - Subsection 89(14) | s. 84.1 deemed dividend paid to an individual could be an eligible dividend notwithstanding him not being a shareholder of the payer | 257 |
Subsection 84.1(2) - Idem [Non-arm’s length sale of shares]
See Also
Administrative Policy
25 July 1994 External T.I. 9407865 - 85(4)
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Paragraph 84.1(2)(a.1)
See Also
Pomerleau c. La Reine, 2016 TCC 228, aff'd 2018 FCA 129
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| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | abusive avoidance of s. 84.1 by converting soft into hard ACB | 261 |
Côté-Létourneau v. The Queen, 2010 DTC 1116 [at 3092], 2007 TCC 91
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Words and Phrases
acquisitionAdministrative Policy
2017 Ruling 2016-0629511R3 - Post-Mortem Planning and Extraction of "Hard ACB"
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| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 84 - Subsection 84(2) | pipeline transfers of shares with both “soft” and “hard” ACB | 663 |
9 October 2015 APFF Roundtable Q. 14, 2015-0595631C6 F - Indirect Monetization of CGD
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| Locations of other summaries | Wordcount | |
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| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | Descarries not consistent with use of ACB on a previous capital gains crystallizatin to create a capital loss for use on a sale | 169 |
Finance
2017 CTF Finance Roundtable, Q.9
Articles
Joint Committee, "Part D of Tax Planning Using Private Corporations – “Converting Income into Capital Gains” Proposals", 2 October 2017 Joint Committee Submission
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| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 246.1 | 490 |
Subparagraph 84.1(2)(a.1)(ii)
Cases
Pomerleau v. Canada, 2018 FCA 129
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| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | purpose of s. 84.1 was broader than the application of its words | 487 |
Administrative Policy
28 May 2010 External T.I. 2010-0359871E5 F - Déduction pour gain en capital
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|---|---|---|
| Tax Topics - Income Tax Act - 101-110 - Section 110.6 - Subsection 110.6(2.1) | deduction available on NAL disposition inter vivos or on death | 141 |
Paragraph 84.1(2)(b)
Administrative Policy
23 June 2010 Internal T.I. 2010-0368161I7 F - 84.1
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| Tax Topics - Income Tax Act - Section 84.1 - Subsection 84.1(2.2) - Paragraph 84.1(2.2)(b) | s. 84.1(2.2)(b) group can include a non-voting shareholder | 125 |
Subsection 84.1(2.1)
Subsection 84.1(2.2)
Paragraph 84.1(2.2)(b)
Administrative Policy
23 June 2010 Internal T.I. 2010-0368161I7 F - 84.1
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| Locations of other summaries | Wordcount | |
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| Tax Topics - Income Tax Act - Section 84.1 - Subsection 84.1(2) - Paragraph 84.1(2)(b) | s. 84.1(2)(b) inapplicable to individual’s transfer of ½ of Opco to Holdco (owned by 3 unrelated individuals) for note and non-voting pref | 212 |