Bump room is determined by the ACB of the target corporation’s shares minus the net tax cost of the underlying assets and the amounts in ITA subparagraph 88(1)(d)(i.1), which include taxable dividends and capital dividends. Accordingly, a target corporation that…
IBTs and the 88(1)(d) bump
In an intergenerational business transfer (IBT), the purchaser does not generally acquire control of the targetco for the purposes of the rule in ITA paragraph 88(1)(d.2). As a result, the tax cost of the eligible assets of targetco likely cannot…
No obligation to correct past errors
The CRA believes that a tax adviser should takes steps to ensure their clients correct past errors (I01-1R2 (February 17, 2026), paras. 116-117), but neither the Income Tax Act nor the Excise Tax Act impose such a duty. Other statutes…
Timing of receipt of dividend on redemption
Under subsection 84(3) of the Income Tax Act (Canada) (the “Act”), where a corporation resident in Canada has redeemed, acquired or cancelled in any manner whatever … any of the shares of any class of its capital stock, (a) the…
GLGI appeals to be struck?
In Kelly v R, 2026 TCC 53, Justice Graham has given multiple taxpayers until April 24, 2026, to provide written submissions on why their appeals should not be struck without a hearing “for abusing this Court’s process”. The taxpayers were…
Capital gain exemption fail
I wrote the following article for the Hamilton Law Association Journal on Ehresman v R, 2025 TCC 78. For another summary of the case, see Colin Bartlett “Are Excess Cash Reserves an Active Business Asset?” 25:4 Tax for the Owner-Manager…
Relevant group entities
A relevant group entity (RGE) of a corporation (per subaparagraphs 84.1(2.31)(c)(iii) and 84.1(2.32)(c)(iii) in the intergenerational transfer (IGT) rules) is any entity carrying on an active business that is relevant to whether the corporation’s shares are qualified small business corporation…
IGT, de facto control and notes
The immediate transfer regime under the intergenerational transfer (IGT) rules found in subsection 84.1(2.31) will not provide a safe harbour from section 84.1, if the taxpayer-vendor at any time after the sale, either alone or with a spouse, has de…
Transfer of property
Subsection 106(2) applies where a taxpayer disposes of an income interest in a trust. Paragraph 106(2)(a) requires the taxpayer to include in income an amount equal to the proceeds of disposition received for the interest less amounts included in the…
Harvard Properties detailed notes
Harvard Properties 2024 TCC 139 per Boyle TCJ General procedure Under appeal A-382-24; A-388-24 “Another Section 160 Tax Avoidance Scam: Harvard Properties” Brian Arnold report 296 Jan 14/25 * Facts The following is a paraphrase of the facts set out…