According to CRA technical interpretation 2015-0565741E5, subsection 256(6) will not save the CCPC status of a corporation whose shares are pledged to secure an indemnity. The CRA concluded that an indemnity is not a debt for the purposes of the…
Notes on Shares of a Specified Class
In applying the association rules in subsection 256(1) of the Income Tax Act (Canada), one can ignore shares of a specified class as defined in subsection 256(1.1). The CRA has said the following about that definition. Regarding the requirements in…
Currency swaps
Craig Burley has written a good short post on George Weston Limited v R, 2015 TCC 42, a case argued for the taxpayer by my old friend from law school days, Sal Mirandola.
55(5)(f) designations are unnecessary?
Neal Armstrong reports on the CRA pronouncement regarding 55(5)(f) designations at the 2014 STEP Roundtable: CRA stated that its long-standing practice “is to apply subsection 55(2) only to the excess of the taxable dividend paid on a share over the…
MGS on strike?
The following is from an OPSEU press release issued last week: The union representing 35,000 frontline Ministry employees who work directly for the Ontario government announced today that bargaining representatives of the Ontario Government have taken a significant step towards…
84.1 and employee buycos
I gave a talk today at the Hamilton Law Association on shareholder agreements and tax issues. David Howell asked me a question, on which I drew a blank, relating to employee buycos. Thanks to Shelley Wickenheiser, I was able to…
Deemed ownership of shares
I am giving a talk on Tuesday at the Hamilton Law Association on tax issues in shareholder agreements. From my speaking notes: The language of 251(5)(b) and subsection 256(1.4) appear to be very similar, but the CRA has maintained an…
New folio on amalgamations
The CRA has published a new folio on amalgamations here.
Inter-company Management Fees
A detailed services agreement was not enough by itself to justify the deduction of management fees paid by Opco to Holdco. The court wanted evidence of the services rendered, the service hours provided, the hourly rate and the identity of…
Providing space
Craig Burley has blogged about 0742443 BC Ltd v R, 2014 TCC 301. His takeaway on the case? “If you have a business that incorporates any sort of rental of space, or allowing customers to use your space, I recommend…