In my article on multiple classes of shares, I described the difficulties that can arise where shareholders subscribe for shares of a class in the capital of a corporation at different times and at different prices per share. How does one solve the problems that can arise where shareholders own shares with tax costs that differ from the paid-up capital (“PUC”) of their shares for the purposes of the Income Tax Act (Canada) (the “Act”)?
A Difficult Client
It’s never easy to give a client bad news, but I doubt Wayne Montgomery expected a meeting with his client to end in criminal charges. His client, a former NFL player, was so dissatisfied with his tax refund that he tried…
Tax Cheats
The Prime Minister has promised that the CRA will chase tax cheats. The PM made this promise in the wake of the release of a CBC News-Globe and Mail report on offshore bank accounts at HSBC in Switzerland.
Partnership Filings
The following is from a news release posted to the CRA website yesterday: Starting in 2011, the requirement related to the number of partners in a partnership will be replaced with a new requirement based on financial activity. Also, the…
Some Big Numbers on Charity Tax Shelters
Today’s Globe and Mail reports that the CRA has reassessed, or soon will reassess, up to 170,000 Canadians “who have allegedly claimed $5-billion in bogus charitable donations since 2003 by using controversial tax shelter programs.”
Prescribed rates for 2010 Q4
The CRA was tardy about publishing the prescribed rates for 2010 Q3. It seems to have wanted to make up for it by publishing the rates for 2010 Q4 early.
Favourite Quote
One of my favourite tax quotes is the following, which was written by the judge in J.F. Newton Ltd. v. Riddell, 45 D.T.C. 5276, 2 C.T.C. 91, 50 B.L.R. 136, 1990 CanLII 933 (BC S.C.), who was forced to…
Auto Expenses
The CRA website now includes a post on the new method for keeping track of motor vehicle expenses.
The HST in Ontario
Do I dare to write about the HST? I don’t, much, because I don’t know much about it. Nonetheless, let me share with you an insight about the Ontario HST that might make your practice life a little easier.
Multiple Classes
The following article appeared in a recent edition of the Hamilton Law Association Law Journal.
Why have separate classes of shares in the capital of a corporation for new investors? Creating separate classes of shares creates its own problems both from a tax and non-tax perspective. Nonetheless, for tax purposes it is sometimes desirable to have different groups of investors subscribe for different classes of shares in the capital of a corporation.