Contributions to an estate or testamentary trust (in this article, an “estate” for short) by anyone other than the testator can vitiate the estate’s status as such. See paragraph 108(1) “testamentary trust” (b) of the Income Tax Act (Canada). Such…
Corporation attribution
With higher interests, corporate attribution (ITA 74.4(2)) becomes more of a concern. The rule doesn’t apply to a small business corporation, however. The attributed amount is also reduced by dividends or interest paid to the transferor in respect of the…
Association and trusts
The authors provide a helpful overview of the various rules that apply for the purposes of determining whether two corporations are associated where a trust is a shareholder of one or both of the corporations. Paragraph 256(1.2)(b) groups. A relevant…
Over-contribution penalty hell
A taxpayer over-contributes to his TFSA, and then the investments in the TFSA become worthless so that he cannot withdraw the excess. Is the taxpayer entitled to relief from the over-contribution penalty? The Federal Court recently held that the CRA…
No more shortcuts for excess CDA elections
The CRA has “retired” the shortcut method for excess CDA elections. It is now necessary to wait for the Part III assessment and then file an election under subsection 184(3) of the Income Tax Act (Canada) in respect of the…
Transfer of title only caught by section 160?
In Gill v R, 2026 TCC 18, the Tax Court seemed to find that a transfer of title as such represented value from a tax debtor that could support an assessment under section 160 of the Income Tax Act (Canada).…
Mistakes in judgments
What happens if the parties to a consent to judgment make a mistake in it? The Court in Oram’s Enterprises Limited v R, 2025 TCC 182, found that the functus officio doctrine and the importance of the finality of judgments…
Net worth assessment strategy
The taxpayer bears the onus of refuting a net worth assessment or a similar type of assessment. The author summarizes a number of approaches that have worked in the courts as follows: Adequate records can defeat blunt assessments (Mensah v…
Amended guidance on third-party penalties
The CRA has amended IC01-1R2 (“Third-Party Penalties”) in light of Guindon v R, 2015 SCC 41, and Ploughman v R, 2017 TCC 64. It has confirmed that “culpable conduct” “is defined with reference to the types of conduct the courts…
Related siblings under section 55
At the 2025 APFF conference, the CRA stated that the sisters in the following scenario would be related as per subparagraph 55(5)(e)(i): Sister A and Sister B each owned 100 percent of the shares of their respective holding corporations, whose…