Translations of recent severed letters

Bundle Date Translated severed letter Summaries under Summary descriptor
2022-07-13 10 February 2022 External T.I. 2021-0912581E5 F - Borrowing to make interest-free loans Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(c) - Subparagraph 20(1)(c)(i) interest-free loans by a limited partner to the LP, or to wholly-owned subs which directly or indirectly hold such LP, can be a good s. 20(1)(c)(i) current use
2022-07-06 25 February 2022 External T.I. 2020-0873761E5 F - Shareholder loan Income Tax Act - Section 15 - Subsection 15(2) s. 15(2) applies separately to accrued and unpaid interest on shareholder loan
Income Tax Act - Section 80.4 - Subsection 80.4(3) - Paragraph 80.4(3)(b) s. 80.4(2) does not apply to accrued and unpaid interest on a loan
Income Tax Act - Section 15 - Subsection 15(2.6) s. 15(2) applies separately to accrued and unpaid interest on a shareholder loan, but s. 80.4(2) does not apply to such interest
2022-06-15 2021 Ruling 2021-0880641R3 F - Changes to existing monetization arrangements Income Tax Act - Section 80.6 - Subsection 80.6(1) substituting the index used in a monetization arrangement did not de-grandfather it from the synthetic disposition rules
General Concepts - Transitional Provisions and Policies agreement novation likely would lose grandfathering
30 March 2022 External T.I. 2017-0737181E5 F - Right to receive income from a trust Income Tax Act - Section 73 - Subsection 73(1.01) - Paragraph 73(1.01)(c) - Subparagraph 73(1.01)(c)(ii) clause suspending the right to income on bankruptcy would not satisfy s. 73(1.01)(c)(ii)
7 October 2021 APFF Financial Strategies and Instruments Roundtable Q. 1, 2021-0899661C6 - Application of paragraph 20(1)(bb) Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(bb) licensed securities dealers satisfy the principal business test and reasonable management fees paid to them are deductible
7 October 2021 APFF Financial Strategies and Instruments Roundtable Q. 3, 2021-0896031C6 F - Règles sur les pertes apparentes Income Tax Act - Section 54 - Superficial Loss application of superficial loss rule to reacquisition of identical shares by spousal RRSP on the 30th day
Statutory Interpretation - Interpretation Act - Section 27 - Subsection 27(5) counting 30 day period starting with disposition
7 October 2021 APFF Financial Strategies and Instruments Roundtable Q. 4, 2021-0895991C6 F - Déduction pour don de bienfaisance corporatif Income Tax Act - Section 123.4 - Subsection 123.4(1) - Full Rate Taxable Income - Paragraph (b) no charitable deduction can reduce aggregate investment income
7 October 2021 APFF Financial Strategies and Instruments Roundtable Q. 5, 2021-0903871C6 F - HBP - Breakdown of marriage or common-law partners Income Tax Act - Section 146.01 - Subsection 146.01(1) - Regular Eligible Amount - Paragraph (f) individual could make an HBP withdrawal after she started living separate and apart (but still in same house) from her common-law partner
Income Tax Act - Section 248 - Subsection 248(1) - Common-Law Partner former common-law partners can live separate and apart in the same house, and cessation of their status is effective the first day
Income Tax Act - Section 146.01 - Subsection 146.01(2.1) - Paragraph 146.01(2.1)(a) when two spouses separate in the same co-owned house, one can make an HBP withdrawal to purchase the co-ownership interest of her spouse
7 October 2021 APFF Financial Strategies and Instruments Roundtable Q. 6, 2021-0896061C6 F - Prolonged Administration of an Estate Income Tax Act - Section 104 - Subsection 104(18) s. 104(18) can apply where an executor has discretion to defer the payment of income for the benefit of minor beneficiaries over an extended period
Income Tax Act - Section 104 - Subsection 104(1) extended administration clause created an extended trust
Income Tax Act - Section 104 - Subsection 104(6) s. 104(18) overrode the s. 104(6) requirement to make income payable in the year
7 October 2021 APFF Financial Strategies and Instruments Roundtable Q. 7, 2021-0899681C6 F - Stock option, Short sale and Identical property
Income Tax Act - Section 7 - Subsection 7(1.31) s. 7(1.31) applies to sale of shares acquired on exercise to cover short, but not to the sale of the shorted shares
Income Tax Act - Section 39 - Subsection 39(4) s. 39(4) election can apply to both the dispositions occurring in connection with short sale transactions
7 October 2021 APFF Financial Strategies and Instruments Roundtable Q. 8, 2021-0899701C6 F - Post-mortem planning - Pipeline Income Tax Act - Section 84 - Subsection 84(2) a pipeline transaction can use an existing corporation rather than a Newco
Income Tax Act - Section 84.1 - Subsection 84.1(1) pipeline transaction can be structured to access hard ACB
7 October 2021 APFF Financial Strategies and Instruments Roundtable Q. 9, 2021-0903501C6 F - RRSP overcontribution and RRIF withdrawal Income Tax Act - Section 204.2 - Subsection 204.2(1.2) - J an RRSP or RRIF withdrawal has an immediate impact on tax on the cumulative excess
7 October 2021 APFF Financial Strategies and Instruments Roundtable Q. 10, 2021-0896101C6 F - Death of seg. fund policyholder - income allocatio Income Tax Act - Section 138.1 - Subsection 138.1(1) - Paragraph 138.1(1)(f) accrued income under a segregated fund is not deemed by s. 138.1(1)(f) to be a right or thing
Income Tax Act - Section 104 - Subsection 104(24) deeming of an amount to be payable for s. 104(24) purposes does not create a legal entitlement to it
7 October 2021 APFF Financial Strategies and Instruments Roundtable Q. 11, 2021-0896021C6 - APFF Q.11 - T1135 and situs of cryptocurrencies Income Tax Act - Section 233.3 - Subsection 233.3(1) - Specified Foreign Property - Paragraph (a) CRA is currently reviewing whether and when cryptocurrencies may not be foreign property
2022-06-08 7 October 2021 APFF Roundtable Q. 1, 2021-0900891C6 F - Tax treatment of employee share trust Income Tax Act - Section 7 - Subsection 7(2) s. 7(2) does not deem there to be an agreement to acquire shares
Income Tax Act - Section 248 - Subsection 248(1) - Employee Benefit Plan the EBP rather than s. 7 rules applied to a share plan for employees where share distributions were discretionary
7 October 2021 APFF Roundtable Q. 2, 2021-0900901C6 F - TOSI and scenarios to recuperate the AMT Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (g) - Subparagraph (g)(ii) only amount in excess of reasonable return is not an excluded amount
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income - Paragraph (d) TOSI rules inapplicable to loans to an individual
Income Tax Act - Section 120.4 - Subsection 120.4(1) - Split Income TOSI inapplicable to payment of excessive salary by one spouse’s company to the other spouse
7 October 2021 APFF Roundtable Q. 3, 2021-0900911C6 F - Entreprise exploitée par une fiducie Income Tax Act - Section 216 - Subsection 216(1) delegation of performance of landlord’s servicing responsibilities does not affect whether its rents are from a business or property
7 October 2021 APFF Roundtable Q. 4, 2021-0900921C6 F - Mind and management et statut de SPCC Income Tax Act - Section 123.3 use of foreign corporation with central management and control in Canada to avoid s. 123.3 tax could be GAARable
Income Tax Act - Section 245 - Subsection 245(4) using a foreign corporation with Canadian CMC to produce a lower tax rate on investment income could be GAARable
7 October 2021 APFF Roundtable Q. 5, 2021-0900951C6 F - Safe income and Part IV tax Income Tax Act - Section 55 - Subsection 55(2) Pt. IV and safe income exclusions under s. 55(2) can be doubled up
Income Tax Act - Section 55 - Subsection 55(2.1) - Paragraph 55(2.1)(c) full use can be made of safe income even though there is an immediately subsequent use of Pt. IV tax exclusion
7 October 2021 APFF Roundtable Q. 6, 2021-0900961C6 - APFF Q.6 - Minimum Tax Carryover and TOSI Income Tax Act - Section 120.2 - Subsection 120.2(3) - Paragraph 120.2(3)(b) CRA will not retroactively adjust returns that relied on a form error permitting TOSI to increase additional tax carryforwards
General Concepts - Transitional Provisions and Policies CRA will honour incorrect AMT carryforward balances that arose due to an error in the CRA form
7 October 2021 APFF Roundtable Q. 7, 2021-0900971C6 F - Economic dependence Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) financial dependence as described in the jurisprudence is indicative but not dispositive of a non-arm’s length relationship
7 October 2021 APFF Roundtable Q. 8, 2021-0900981C6 F - Cost Recovery Method in IT-426R (Archived) Income Tax Act - Section 12 - Subsection 12(1) - Paragraph 12(1)(g) a limited partnership cannot use a cost recovery earnout

Pages