The appellant in Veilleux c R, 2022 CCI 69, was one of two unrelated individuals who were the 50/50 shareholders and only directors of Opco. The CRA assessed the appellant under section 160 for Opco’s unpaid tax debts in respect…
No rollover to alter ego trust with bankruptcy provision
The CRA says that a rollover under subsection 73(1) is not available for an individual’s transfer of property to a trust supposedly governed by subparagraph 73(1.01)(c)(ii) (an “alter ego” trust) if the trust provisions prohibit the distribution of income to…
Corporate appellants need lawyers
The following article was published by the Canadian Tax Foundation. “John Loukidelis, “Corporate Appellants Need Lawyers” (2021) 21:2 Tax for the Owner-Manager 13-14″ In Canada v. BCS Group Business Services Inc. (2020 FCA 205), the FCA held that a lawyer…
Corporate incest
The following article was first published by the Canadian Tax Foundation in 2022 vol 22, no 2, Tax for the Owner-Manager (April, 2022) Suppose that, after an estate freeze, Mr. X owns all of the freeze shares and thin-voting shares…
55(2) and T5s
Opco pays a dividend to Holdco, and part of the dividend is re-characterized as a capital gain under subsection 55(2). Does that affect the amount of the dividend reported on the T5 for the dividend? I have not been able…
Paletta: The Pursuit of Profit
The author writes: Based on the Tax Court’s finding that Paletta’s trading activity was carried on solely for tax purposes without any pursuit of profit, the FCA concluded that Paletta’s trading activity could not constitute a source of business income,…
Collins Family Trust
Here’s the final word from the Supreme Court on rectification and rescission. Shorter SCC: Don’t send us tax-related cases; we don’t like them. Canada (Attorney General) v Collins Family Trust, 2022 SCC 26 On appeal from the BCCA, were the…
Recent developments in s 160 law
Yves St-Cyr and Jacob Yau “What’s New in Section 160” 2021 Ontario Tax Conference Table of Contents 1. Introduction 2. Overview of Section 160 2.1. Purpose 2.2. Requirements for Application 3. Underlying Tax Debt and Burden of Proof 3.1. Challening…
Pipeline gotcha
Clause 256(7)(a)(i)(D) provides that control of a corporation is not acquired only because a particular person who acquired the shares from an estate that arose on and as a consequence of the death of an individual, if the estate acquired…
Corporate attribution tips
The authors summarize some methods for avoiding or mitigating corporate attribution: The corporate attribution rules do not apply where the transferee is a small business corporation. The transferor could consider effecting a freeze using a stock dividend. (But will the…