Regulation 3100 - Tax Shelter

See Also

Gleig v. The Queen, 2015 TCC 191 (Informal Procedure)

notes were prescribed benefit where no intention to demand payment

Lyons J found (at para. 42) that the taxpayers were not required by Blue Hill, the promoter of a tax shelter investment in mineral claims, to pay the promissory notes issued by them in consideration for Blue Hill incurring Canadian resource expenditures on their behalf. On this basis, she found that the notes were a prescribed benefit under Reg. 231(6) (now Reg. 31001).).

See summary under s. 237.1(1) – tax shelter.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 237.1 - Subsection 237.1(1) - Tax Shelter shelter based on potential interests rather than what actually was acquired 209

Subsection 3100(1)

Paragraph 3100(1)(b)


John Tobin, "Infrastructure and P3 Projects", 2017 Conference Report (Canadian Tax Foundation), 10:1-31

see also authorities listed under Reg. 231(6) et seq.

Government progress payments (treated as s. 13(7.1) capital cost deductions) are prescribed benefit under Reg. 3100(1)(b) (p. 10:15)

[T]o the extent that Projectco takes the view that the amount of the payments for the construction period reduces the capital cost of a class 14 property (on the basis that subsection 13(7.1) applies), these amounts are considered to be prescribed benefits irrespective of whether they are enjoyed directly or indirectly (that is, through the partnership itself). If, however, they were treated as construction-period revenues, they would not be considered to be prescribed benefits.

However, if the construction-period expenses are capitalized as a class 14 property and the construction payments are treated as a government allowance, the construction payments likely cause Projectco’s general partnership interests to be deemed to be limited partnership interests. In that case, the at-risk amount of the partner applies to reduce the access to deductions. Nonetheless, this result may be beneficial to the partner when the potential application of the tax-shelter rules is taken into account.