Jin Wen and Michelle Dickinson, “Are Shares Tainted Forever Under Subsection 84.1(2.1)?”, 8:4 Cdn Tax Focus (Nov 2018), discusses the rule in subsection 84(2.1), which grinds PUC as if a vendor had claimed the capital gain exemption but never does,…
Offshore account explored
The taxpayer in Canaada (National Revenue) v Stankovic, 2018 FC 462, had held a bank account in Switzerland that French authorities disclosed to the CRA under the French treaty. The French authorities, it appears, had obtained the information about the…
Residence of a foreign corporation
Landbouwbedrijf Backx BV v R, 2018 TCC 142, considered the residence of corporation under the laws of the Netherlands whose director was resident in that country but whose only shareholders were resident in Canada. In respect of Backx BV’s place…
Odd Space
In Laliberté v R, 2018 TCC 186, the Tax Court considered whether the controlling shareholder of Cirque du Soleil had received a $38 million shareholder benefit for a trip he took to the International Space Station that was paid for…
Purpose of 84.1
In E Hamelin, “Surplus Stripping: A New Approach?” 18:4 Tax for the Owner-Manager (October 18, 2018), the author notes that the Court in Pomerleau v R, 2018 FCA 129 seemed to treat the one-half portion of a capital gain that…
Specified investment business
In Rocco Gagliese Productions Inc. v R, 2018 TCC 136, the corporate taxpayer employed an individual who wrote and recorded music on an active and continuous basis. The taxpayer received royalty income from SOCAN for this work. The CRA took…
Dividend refunds and taxpayer relief
In Bonnybrook Industrial Park Development Co. Ltd. v. Canada (National Revenue), 2018 FCA 136, the taxpayer failed to file tax returns for multiple years, which meant that it was beyond the three-year deadline for claiming a dividend refund. The taxpayer…
SBD grind in new 125(5.1)
In A Ghani, M Lee and M Kakkar, “The Passive Income Rules: New Ways To Grind the SBD” 18:4 Tax for the Owner-Manager (October 18, 2018), the authors note that egardless of whether a corporation has had multiple year-ends, these…
Section 160 and stock dividends
In R v 594710 British Columbia Ltd., 2018 FCA 166, the Court held that GAAR applied to a complicated series of transactions in which profits of a limited partnership were allocated to a corporation with tax shelter where the economic…
“All or substantially all”
In Atlantic Packaging Products Ltd. v R, 2018 TCC 183, the taxpayer sold one of its divisions (the “Tissue Division”) to an arm’s length purchaser. In connection with the sale, it sold 68% of the assets of the division to a subsidiary for Common Shares. The taxpayer sold the remaining assets of the division and the Common Shares of the subsidiary to the purchaser. The CRA reassessed on the basis that s 54.2 of the Income Tax Act did not apply to the sale of the Common Shares and that the sale was on income account. The Tax Court upheld the reassessment.