The CRA appeared unsympathetic to the idea that detailed calculations of safe income might not be necessary where Opco is wholly-owned by Holdco, and Opco accounting income does not differ greatly from its taxable income. The CRA representative spoke darkly…
Discretionary dividend shares
Suppose shareholders of Opco hold different classes of common shares on which dividends can be paid at the discretion of the board so that one class can receives dividends to the exclusion of other classes. All common shares participate pro…
Trust that avoids 21-year rule subject to GAAR
An inter vivos trust is approaching its 21-year anniversary. Before the anniversary, the trust distributes property under 107(2) to Canco, a corporate beneficiary, which is wholly-owned by another inter vivos trust. The other trust was just formed, and so it…
Real property registry
The Business Corporations Act (Ontario) (the “OBCA”) is being amended effective December 10, 2016, to require a corporation incorporated or continued under the OBCA to maintain a “register of ownership interests in land in Ontario”. The register must identify each…
What is a nil assessment?
In Shreedhar v R, 2016 TCC 254, the Crown brought a motion to strike an informal procedure appeal. The Crown claimed that the taxpayer was attempting to appeal from a nil assessment. The Court disagreed because, while the assessment had…
Farm quota as 14.1 Property
CRA technical interpretation 2016-0660861E5 dated September 27, 2016, provides a handy summary of how the transitional rules will work for milk quota that changes from eligible capital property (ECP) to Class 14.1 depreciable capital property (14.1 property) especially where only some of the quota is sold after 2016.
Sham and Golini
On Golini v R, 2016 TCC 174, Karen Stilwell writes: With respect to the assignment by Holdco, however, the Court reached a different conclusion. It found that though the collateral assignment by Holdco to secure its guarantee presented itself as…
Assessing beyond
Assume that a taxpayer did not make a negligent misrepresentation in a year and that the year is beyond the normal reassessment period. Are the transactions undertaken in that year subject to further review by the CRA?
Employee advances
Neal Armstrong notes that the CRA, in technical interpretation 2015-062357 (dated April 26, 2016), takes the position that an employee advance is taxable when received even if the amount must be repaid if the services aren’t performed.
Resigning as a director
What does it take to resign as a director of a corporation? An undated and unsigned resignation that sits in a lawyer’s file will not suffice, according to R v Chriss, 2016 FCA 236, rev’g 2014 TCC 254.