Those who have had the misfortune to participate in tax shelters gone wrong some times complain that the CRA did not do enough to warn the public about the pitfalls associated with them. The CRA appears to be trying to remedy the deficiency with a rather stern warning about participating in a gifting arrangement.
The Long Arm of Section 160
Section 160 of the Income Tax Act permits the CRA to assess “at any time” a taxpayer who receives property for inadequate consideration from a non-arm’s length person who, at the time of the transfer, has a liability under that Act. Section 160 gives the CRA very long arms indeed when it is trying to reach into a taxpayer’s pocket, as is shown by Wannan v. The Queen, 2003 FCA 423, 1 C.B.R. (5th) 117, [2004] 1 C.T.C. 326, [2003] D.T.C. 5715.
QSBCS Status
Estate of Edward Reilly v. The Queen, 2007 TCC 404, considers whether shares of a corporation owned by an individual were qualified small business corporation shares (QSBCS) at the time of his death. If the shares had been QSBCS, the individual’s estate would have been entitled to claim the capital gains exemption to eliminate the gain the individual realized on death in respect of the shares.
Eligible Dividend Trouble
The CRA issued a notice on July 10, which included the following paragraph about difficulties with its GRIP calculation schedule:
Delay
The Supreme Court released its decision today in The Queen v. Addison & Leyen Ltd., 2007 SCC 33. The case considers whether the CRA really can assess a taxpayer “at any time” under section 160 of the Income Tax Act.
“Written agreement”
Shaw v. The Queen, 2007 TCC 148, an informal procedure decision of the Tax Court, considered the meaning of “written agreement” as found in the provisions of the Income Tax Act governing the deductibility of support.
GST and Damages
Damages paid for breach of contract, either pursuant to a judgment or further to a settlement, can be subject to GST. Section 182 of the Excise Tax Act provides that any such amount is deemed to include GST, which the…
Budget bill enacted
Bill C-52 received Royal Assent on June 22. It is now law as S.C. 2007, c. 29.
Subsection 75(2)
The following article on subsection 75(2) of the Income Tax Act (Canada) appeared in the latest edition of the Hamilton Law Association Law Journal.
Useful links
I maintain a page on this site with some useful links for the tax practitioner. I have just added a link to the CRA’s page listing its prescribed rates. If any of you have other ideas for useful links that…