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…
Situs of cryptocurrency for T1135 purposes
The authors recommend erring on the side of caution and treating cryptocurrency as foreign property for the purposes of T1135 reporting because the situs of cryptocurrency is uncertain. Musani and Singh “Foreign Property Reporting: Where Is Your Crypto?” 21:4 Tax…
84(2) catches a hybrid transaction
In Foix c R, 2021 CCI 52, W4N sold its key business assets to EMC, an American corporation. Before and after the asset sale, the shareholders of W4N sold its shares (directly and indirectly) to a Canadian subsidiary of EMC…
Bresse Syndics Inc.: De Jure Versus De Facto Control
In Bresse Syndics Inc. v R, 2021 FCA 115, the Court was asked whether “New CO2” was a CCPC. Its sole shareholder was a trust whose trustees, legally, had to be directors of a public corporation (with whom New CO2…
Are persons related to themselves?
When are persons related for the purposes of subparagraph 110.6(14)(c)(ii)? A person is not generally deemed to be related to himself except for certain purposes (paragraph 251(5)(c), subparagraph 55(5)(e)(ii), subsection 256(1.5) and determining whether corporations are associated). Compare this to…