In Dino Infanti “Employee Stock Option Rules and Legally Binding Agreements” Tax for the Owner-Manager 17:2 (April 2017), the author summarizes CRA technical interpretation 2016-0641841I7 (September 19, 2016). The technical interpretation, in light of Transalta Corporation v R, 2012 TCC 86, states that s 7 and s 110(1)(d) of the Income Tax Act (Canada) apply only if there is a legally binding agreement to issue shares.
T1135 penalty applies automatically
The CRA has concluded that the s 162(7) penalty for late-filing a T1135 applies automatically. Answer to question 14 at the APFF Roundtable on October 6, 2017.
Spousal rollover
Tax Interpretations reports that the CRA believes it is possible to rollover property to a common-law spouse under section 73 of the ITA or the RRSP rollover rules pursuant to a written separation agreement. This is true, the CRA thinks,…
TOSI Wonderland
Let’s see what the harassed tax adviser (or front-line CRA auditor) must do to answer basic client questions about the new tax-on-split-income (TOSI) rules.
De facto control
Regarding de facto control, proposed subsection 256(5.11) overturns McGillivray Restaurant Ltd. (2016 FCA 99). The proposed subsection reads as follows: (5.11) Factual control—Interpretation. For the purposes of this Act, the determination of whether a taxpayer has, in respect of a…
Mailing assessments
John Sorensen, “Credibility and an Assessment’s Mailing”, Canadian Tax Highlights 25:1 (January 2017) comments on Mpamugo (2016 TCC 215). The case summarizes four steps for dealing with disputes over whether and when a notice was mailed: The taxpayer must assert…
Normal reassessment period
Hall v R, 2016 TCC 221, addresses the normal reassessment period for tax payable under a Part of the Income Tax Act (Canada). The case confirms that the period does not begin until an initial assessment is issued under that…
PRE and Trusts
Jack Bernstein and Robert Santia, “Principal Residence Exemption: Trusts and Non-Residents”, Canadian Tax Highlights 25:2 (February 2017) comments on the rules now applicable to the principal residence exemption (the PRE) where a trust owns the residence. After 2016, only certain…
SCC and rectification
Robert Kreklewetz and John Bassindale, “SCC on Rectification Requirements” , Canadian Tax Highlights 25:1 (January 2017) comments on Fairmont Hotels (2016 SCC 56) and Jean Coutu Group (2016 SCC 55) and includes the following statement: Interestingly, Wagner J took the…
Rules limiting SBD availability
Kenneth Keung, “Anti-Intermediary Rules in Section 125” , Canadian Tax Highlights 25:2 (February 2017) provides a handy summary of the carve-outs from income eligible for the small business deduction (SBD) as follows: ABI earned from a partnership in which the…