The authors describe a scenario where Aco and Bco own 85% and 15% respectively of Opco. Opco cannot spin-off its real property to Realco where Aco and Bco become direct 85/15 shareholders of Realco. 55(3)(a) will not apply because Bco…
Mandatory disclosure rules (MDR) – CRA guidance
The authors provide notes on the CRA’s updated guidance on the MDR. Taxpayers must report a series of transactions that includes a notifiable transaction if the series straddles the date the transaction is designated as such. The CRA list of…
Scams and tax
In an email spoofing attack, an employee of a business might share important financial information with, or send money to a, a fraudster because the employee has received an email from the fraudster masquerading as the employee’s boss. In a…
Employee loans
The CRA has published a document on its website about employee debt.
Deans Knight applied
In R v. MMV Capital Partners Inc., 2023 FCA 234, the Court applied GAAR to a scheme where five of the original shareholders of the taxpayer maintained de jure control but an arm’s length party acquired 99% of the corporation’s…
Rectification success
In Slightham et al. v. AGC, 2023 ONSC 6193, the Court granted rectification of a trust deed that inadvertently prohibited the allocation of income derived from Opco to Holdco, which was a beneficiary of the trust. The parties had intended…
Sale of farmland
The CRA confirmed that or purposes of the farming-use condition in clause 110.6(1.3)(a)(ii)(A), the person or individual that meets this condition need not be the person who owns the property at the determination time or in the 24 months immediately…
CDA addition for Benco
A corporate beneficiary of a trust can add an amount to its CDA in respect of a capital gain realized by the trust only if the trust allocates the entire capital gain to the corporation. Moreover, the addition can only…
Foreignco owning a vacation property
The CRA confirmed that a non-resident corporation that owns a Canadian vacation property confers a benefit on its non-resident shareholders where the shareholders or non-arm’s length persons use the property. The benefit, as a deemed dividend (214(3)(a)), is subject to…
Deduction for TOSI under 20(1)(ww)
A taxpayer can deduct an amount under paragraph 20(1)(ww) even if the taxpayer must include a taxable capital gain in income that is subject to TOSI but he or she can offset the gain with an allowable capital loss. STEP…