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…
Avoiding 84.1(2.1)
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…