In technical interpretation 2018-0777361E5 (November 7, 2018), the CRA considered whether shares of a private corporation (Investco) were “excluded shares”. The parent who held voting preference shares had died. The preference shares represented more than 10% of all votes and…
Provincial residence
Sampson v R, 2018 BCSC 1503, is a detailed decision relating to the residence of a taxpayer for provincial income tax purposes. The taxpayer was found to be resident in both BC and Alberta, but his “principal” place of residence…
Trust allocations gone awry
Unfortunately, taxpayers sometimes play fast and loose with the legalities surrounding family trusts. Sometimes trustees purport to make allocations of income from a trust to its beneficiaries. The beneficiaries treat the amounts allocated as income for the purposes of the Income Tax Act (Canada) (the “Act”). The allocated amounts, however, somehow end up in the hands of other individuals, often the parents of the beneficiaries in question. The parents are often also the trustees of the trust who made the allocations (fiduciary obligations be damned).
AAII integration anomaly
In November, Ontario announced it would not implement the AAII clawback for the small business deduction (SBD). This creates an integration anomaly. If the federal clawback applies, the related income will be part of GRIP for federal and Ontario purposes…
New shareholder register
Torys has written a good, short memo on new regulations that will require corporations under the Canada Business Corporations Act to create a new shareholder register that “pertain to all individual shareholders, registered or beneficial, who have significant control, direct…
GAAR to be applied only when benefit realized
The CRA, per Wild v R, 2018 FCA 114, accepts that the GAAR can be applied only after the benefit has been realized. Neal Armstrong summary of Alexandra MacLean, “CRA Audits of Large Corporations – The view from ILBD” November…
Audit reversals
According to Neil Armstrong’s summary of Alexandra MacLean’s paper at the 2018 CTF Annual Conference (“CRA Audits of Large Corporations – The view from ILBD”), CRA Tax Services Offices and programs are assessed by “tax earned by audit” for the…
Distribution of gains from a trust
Unfortunately, taxpayers sometimes play fast and loose with the legalities surrounding family trusts. Sometimes trustees will purport to make distributions from a trust to its beneficiaries. The beneficiaries treat the amounts received as income for tax purposes, but then those…
Burden of proof
Owen J, in Morrison v R, 2018 TCC 220, writes the following about the burden of proof relating to the Minister’s assumptions: The Federal Court of Appeal makes two important points in these decisions [Transocean Offshore Ltd. v R,…
File storage fees
Retired, or soon-to-be retired, lawyers will be happy to know that Hamilton’s own Justice Bocock has held that fees paid for file storage by a retired lawyer are deductible even though the lawyer is no longer earning business income. Sounds…