Income Tax Severed Letters - 2026-09-29

Ruling

2025 Ruling 2025-1055391R3 - Supplemental ruling letter to 2024-102402

Unedited CRA Tags
84(1), 87(3), 89(1), 212.1

Principal Issues: 1. Whether the rulings issued in 2024-102402 still apply. 2. Whether 212.1 applies to the new proposed transaction (i.e., the additional contribution) as intended by the taxpayer.

Position: 1. Yes. 2. Yes. Favorable rulings issued.

2024 Ruling 2024-1024021R3 - Loss consolidation involving Canadian branch

Amended by 2025-1055391R3
Unedited CRA Tags
2(3), 18(1)(c), 81(1)(a), 115(1), 111(1)(a), 111(8), 111(9), 128.1(1), 128.1(2), 87(1), 87(2.1), 89(1), 250(4), 250(5), 250(5.1), 13(7)(e), 13(21.2), 84(1)(c.3), 15(1), 56(2), 69(11), 246(1), 251.2(2), and 245(2).
Summary Under
Tax Topics - Income Tax Act - Section 87 - Subsection 87(2.1)
a Canadian profitco using the NCLs of a non-resident affiliate from its Cdn. branch business through a continuance and amalgamation transaction
Summary Under
Tax Topics - Income Tax Act - Section 111 - Subsection 111(1) - Paragraph 111(1)(a)
loss consolidation through continuance of non-resident lossco and its amalgamation
Summary Under
Tax Topics - Income Tax Act - Section 128.1 - Subsection 128.1(2) - Paragraph 128.1(2)(b)
use of s. 128.1(2)(b) election to increase PUC of Canco shares in compliance with s. 212.1(1.1)(b)

Principal Issues: 1. Whether a XXXXXXXXXX corporation’s non-capital losses will constitute non-capital losses of the XXXXXXXXXX corporation immediately after its continuance to XXXXXXXXXX as a ULC. 2. Whether subsection 87(2.1) will apply in respect of the amalgamation of the continued corporation and its Canadian sister corporation. 3. Whether various benefit rules will apply in respect of the proposed transactions. 4. Whether the federal or provincial GAAR will apply in respect of the proposed transactions.

Position: 1. Yes. 2. Yes. 3. No. 4. No. Favorable ruling issued.

Reasons: 1. The governing corporate legislation provides for continuance and treats the continued corporation as the same corporation. 2. Meets statutory requirements. 3. / 4. Consistent with previous rulings and CRA positions on loss consolidations.

Technical Interpretation - External

1 June 2026 External T.I. 2026-1095791E5 - Mineral Resource Certification

Unedited CRA Tags
248(1) "mineral resource"

Principal Issues: Whether a mineral resource certification under subparagraph (d)(i) of the definition of "mineral resource" in subsection 248(1) is required in respect of XXXXXXXXXX deposit.

Position: No.

Reasons: NRCan has advised us that the XXXXXXXXXX deposit is a base metal, and that the deposit qualifies as a base metal deposit under paragraph (a) of the mineral resource definition in subsection 248(1).

Technical Interpretation - Internal

31 March 2026 Internal T.I. 2025-1076591I7 - Undue benefits

Summary Under
Tax Topics - Income Tax Act - Section 188.1 - Subsection 188.1(5)
the “undue benefit” penalty can extend to private benefits conferred by a registered charity on those without a specified relationship to it
Words and Phrases
undue undue benefit

Principal Issues: Can undue benefits include disbursements by way gift of other than those made to any person who is a proprietor, member, shareholder, trustee or settlor of the charity or association, who has contributed or otherwise paid into the charity or association more than 50% of the capital of the charity or association, or who deals not at arm's length with such a person or with the charity or association.

Position: Yes.

Reasons: The definition "undue benefit" is an inclusive definition where such disbursements, among others, that are not excepted by paragraphs (a) through (c), may be captured.