Last week, I gave a presentation for the Hamilton Law Association on eligible dividends at its annual Corporate Commercial update. You can find a copy of a sample resolution for eligible dividends here. Use at your own risk!
Freeze Shares
The following article appeared in the latest edition of the Hamilton Law Association Law Journal.
Valuation redux
In a post I wrote about a year ago, I complained about the CRA’s then-recent pronouncements on control premiums. The CRA, at the most recent Canadian Tax Foundation BC Conference, recanted this position, at least in part, as follows:
Offsetting Shareholder Benefits
In Coutre v. The Queen, 2009 TCC 456, the taxpayer tried to argue that, if an assessment under subsection 15(1) is made against a shareholder, then the Minister, to prevent double taxation, must reduce the benefit by the amount of any outstanding shareholder loan.
Loss Utilization That Doesn’t Work
Consider the position of Lossco and Profitco, each a wholly-owned sub of Parentco, where one has non-capital losses in a year equal to the taxable income of the other in that same year. Between them, they have not earned profits, but the Income Tax Act requires Profitco to pay taxes anyway because the Act does not permit related corporations to file consolidated returns. What to do?
Paying dividends with a note
In a post I wrote last year, I stated
According to the CRA, it is not necessary to use cash to pay the dividend. A corporation can pay a dividend using a note, but the payee must accept the note as absolute payment of the dividend.
Transfers of insurance
I’ve seen a number of transactions lately where the owner of a life insurance policy proposes to transfer it to a corporation controlled by the owner. The benefits of corporate-owned insurance are well-known, of course, but such a transfer could also permit the owner to withdraw significant amounts of money from the corporation tax free.
Contradiction
In January I reported that the Tax Court had held that the penalty provided by subsection 163(2.1) of the Income Tax Act did not apply if the corporation filing the return did not have taxable income (see Goar, Allison &…
Revival, for the third time
I have posted here and here on the effect of the dissolution of a corporation and its subsequent revival on the liability of a director for source deductions and the like. The CRA has now weighed in with a technical…
New Federal NPO Legislation
The feds have been talking about modernizing their not-for-profit statute for quite some time now, and they finally did it last week. Bill C-4 received Royal Assent as S.C. 2009, c. 23—the Canada Not-for-profit Corporations Act—on June 23, 2009. You…