Under the Income Tax Act (Canada) (the “Act”),1 the acquisition of control of a corporation can cause a number of unwanted consequences, including a deemed year-end and the restriction or elimination of loss carry forwards. Practitioners need to be aware…
Post-mortem charitable giving using corporate-owned insurance
Mr X dies owning the shares of Opco. Opco receives a large payout under a life policy it held on X’s life. X’s Will provides for a gift to a charity. How does the estate make the gift using the…
Trusts and Dividends, Again
The CRA believes that a dividend paid to a trust that is then paid to an individual during a year is not allocated until the end of the year (ie December 31 for inter vivos trusts) (CRA technical interpretation 2016-0647621E5,…
Dividends paid to beneficiaryco
The CRA takes the position that a dividend allocated by a trust is not paid until December 31. As a result, a trust beneficiaryco could be subject to Part IV tax if a target corporation pays a dividend through the…
Estate loss carry back
Has COVID-19 made it difficult or impossible for you, an estate executor, to dispose of capital property within the one-year deadline in subsection 164(6) because, say, courthouse staff have been unable to process probate applications in a timely manner? Then…
Use of a cottage
At the 2020 Canadian Tax Foundation Roundtable (question 7), the CRA was asked about a cottage owned by an alter ego trust or a joint spousal trust trust. Can the children of the trust’s beneficiaries use the cottage without being…
Change of trustee and acquisitions of control
The CRA takes the position that, where a new individual becomes a trustee, a corporation controlled by the trust is controlled by a new group so that there will be an acquisition of control unless one of the exceptions in…
159(5) elections
An estate can file an election under subsection 159(5) of the Income Tax Act (Canada) using form T2075. The election permits the deferral of the payment of taxes owing as a result of the deemed disposition of property on death.…
Fraudulent conveyances and estate planning
CanLII Connects has posted a good article by Duncan J. Manson on fraudulent conveyances and estate planning. The article is BC-centric. Would the analysis be any different under Ontario law?
Estates and foreign affiliate dumping
The draft foreign affiliate dumping rules can create a deemed dividend to a non-resident discretionary beneficiary of the estate of an owner of a private Canco that holds shares in a foreign affiliate. Henry Shaw, “Foreign Affiliate Dumping and Estates…