The CRA might apply the GAAR to a 55(3)(a) butterfly if A + B > C where A is the ACB of the remaining shares in the capital of DC after the butterfly B is the ACB of the DC…
Part IV tax and amalgamations
Benco is a beneficiary of a trust that owns all of the issued shares of each of Opco1 and Opco2. On November 30, Opco1 pays a dividend to the trust, which allocates it to Benco. Opco1 does not receive a…
Good news on trust reporting
Neil Armstrong notes that the CRA will not require trust to provide additional beneficial ownership information for 2021 because the relevant legislation has not been enacted yet.
Betrayed by fonts
This story warmed my font-nerd heart. A bankruptcy trustee hired an expert in typography and design who testified that a document supposedly created in 1995 used fonts that weren’t available to the public until 2007. *Sad trombone sound*.
Inter-company loans
In Vine Estate v R, 1 C.T.C. 18, 29 F.T.R. 59, 89 D.T.C. 5528 (FCTD), husband and wife owned 50% each of the shares of Canco, and husband owned all of the shares of a Florida corporation (Sisterco). Canco…
A corporation holding shares in itself
W D Gray and R S Whitley, Gray’s Commentaries on Federal Corporate Laws volume 3 (Toronto: Thomson Reuters 2020) (loose-leaf updated 2020 release 9), in LM-CBCA:21, discuss section 30 of the Canada Business Corporations Act. In general terms, the section…
Some fine distinctions
According to K P McGuiness, Canadian Business Corporations Law 3d ed, volume 2 (Toronto: Carswell), at 1178-1179 The words “share” and “stock” are not synonyms. A “share” is a security that gives a person a participation interest in the corporate…
Trust Distributions to Non-resident Beneficiaries
Subsection 107(5) prevents a Canadian-resident trust from making a distribution to a non-resident beneficiary on a tax-deferred basis under subsection 107(2). The CRA has stated that it will apply GAAR to a distribution to a Canadian corporate beneficiary controlled by…
Happy Valley applied
Happy Valley Farms Ltd. v MNR, 2 CTC 259, provides a handy list of the factors a court will generally consider in deciding whether a gain realized on the sale of a home was on income account. The Court…
Meaning of “tax shelter”
Krumm v Canada, 2021 FCA 78, is significant because it appears to take the tax shelter rules one step further than many professionals expected. It reflects a broad interpretation of the definition of “tax shelter” in which both publicly marketed…