I’ve written before concerning my doubts about the advisability of issuing shares that are redeemable for a nominal amount but that are entitled to unlimited dividends. Robin MacKnight does not share these concerns: he appears to have no qualms about…
Local interest
Here’s a case of interest to tax advisers and residents of the Hamilton area. In Henco Industries Limited v R, 2014 TCC 192, the Court dealt with the tax treatment of certain payments received from the Government of Ontario by…
Shares issued for a note
Neil Armstrong, in a recent News of Note article, summarizes an article by Marshall Haughey (“Issuing Shares for a Promissory Note,” 24 Can. Current Tax, May 2014, p. 85), in which the author concludes that shares supposedly issued for a…
Excess capital dividends
Paul Hickey, in Canadian Tax Highlights (22:3, March 2014), notes that the CRA recently confirmed that it will defer processing an election to treat an excess capital dividend as a separate taxable dividend until any related objection under Part III…
Housing Loans
Owner-managers and their advisers need to be wary of housing loans made to a private corporation’s controlling shareholder. In Mast v R, 2013 TCC 309, the Tax Court concluded that the exception to subsection 15(2) of the Income Tax Act…
Minute books
Too often, corporate minute books are taken for granted by their officers, directors and shareholders. My post earlier today reminded me that the problem to which it alludes often stems from a minute book that hasn’t been maintained properly. As…
Paying dividends, again
Neal Armstrong makes note of a recent CRA technical (French only), which confirms that the CRA might not recognize an amount supposedly “paid” as a dividend if it is supported only by accounting journal entries. The well-established principle, per Hickman…
Meaning of “active business”
David Bazar was good enough to forward to me an interesting case on the meaning of “active business” in the Income Tax Act. In Ollenberger v R, 2013 FCA 74, the Court was called on to consider whether the use of the word “active” in the phrase required something more than just any business that is not a “specified investment business” or a “personal services business”. The Court held that “active” did no such thing.
Point in time due diligence
A director of a corporation that fails to remit source deductions might be duly diligent to a point in time, and therefore not liable for the failure to that time, but not diligent after that time, and therefore liable for…
Income averaging?
Mark Hunter pointed out to me that paragraph 20(1)(j) of the Income Tax Act (Canada) doesn’t work well as an income-averaging tool if used in circumstances where the person taking the loan can’t repay it any time soon or will do so in a year without much income.