This is the second part of a series on trusts and the association rules. The first part appeared in the May 2026 issue of Canadian Tax Focus. The second part addresses how the rules can apply. Divorced Spouses Divorced spouses…
CCPC over-integration increases
Decreases in the dividend tax credit for ineligible dividends has increased over-integration on investment income earned via a corporation for individuals who are in the top bracket. The extra burden arising from earning and receiving investment income via a corporation…
Revisiting Stewart and Walls, again
A number of commentators, including Justice John Owen, have expressed unease with the reasoning of the Federal Court of Appeal in R v Paletta (Estate), 2022 FCA 86, and Brown v R, 2022 FCA 200. They might say “I told…
Allegation of Sham Trust Allocation
In Fiducie Famille Champoux c Agence du revenu du Québec, 2026 QCCQ 2430, Revenue Quebec had alleged a sham where a trust allocated to a beneficiary $800,000 of a $950,000 gain realized on the sale of shares. The beneficiary’s husband…
What is a settlement agreement?
The parties in a Tax Court appeal exchanged emails about settlement. The taxpayers’ counsel, via email, accepted an emailed counter-offer from the Crown. The Crown then sent minutes of settlement that contained terms not in the taxpayers’ original offer as…
Electronic reassessments
Subsection 244(14.1) of the Income Tax Act creates a presumption that a taxpayer has received a notice of assessment or reassessment on the day the CRA sends an email notifying the taxpayer that a document has been posted to the…
NONCs and the normal reassessment period
The revised rules for notices of non-compliance (NONCs) suspend the counting of days for determining the end of a notice reassessment period during which a judicial review of a NONC is pending regardless of the outcome. “A taxpayer considering whether…
IGTs and GAAR
Technical notes to C-15 (Royal Assent March 26, 2026) appear to take the position that GAAR could apply to an otherwise compliant intergenerational transfer (IGT) if it is really a surplus-stripping arrangement. The Finance comments refer to situations where the…
Deliberate triggering of 55(2) and the GAAR
The CRA accepted that the pre-2024 GAAR did not apply where subsection 55(2) was triggered deliberately. Will the amended GAAR apply to such planning? The authors point out that the economic substance test in subsection 245(4.1), if it applies, is…
Anti-Avoidance for the 21-year rule
Bill C-31 expands the scope of the anti-avoidance rule in subsection 104(5.8) so that it applies where property is transferred to a beneficiary under subsection 107(2) and “an interest, or for civil law, a right, in the taxpayer is held…