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…
Trusts and control
The CRA accepts that, if A and B are the trustees of a trust that controls Corp1, and A and B also constitute a group that controls Corp2, then Corp1 and Corp2 are related to each other under subparagraph 251(2)(c)(i).…
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…
Inter-corporate dividends again
In A.G. Stedman “Intercorporate Dividend Planning: More Complexity” 20:1 Tax for the Owner-Manager (January 2020), the author outlines factors to consider when a private corporation proposes to pay a dividend to another private corporation as follows: When a subsidiary corporation…
Central mind and management
In Landbouwbedrijf Backx BV v Canada, 2019 FCA 310, the Court agreed that a Dutch company was resident in Canada because the central mind and management of the company was in Canada. The Court found the following facts to be…
New shareholder register
Torys has written a good, short memo on new regulations that will require corporations under the Canada Business Corporations Act to create a new shareholder register that “pertain to all individual shareholders, registered or beneficial, who have significant control, direct…
Residence of a foreign corporation
Landbouwbedrijf Backx BV v R, 2018 TCC 142, considered the residence of corporation under the laws of the Netherlands whose director was resident in that country but whose only shareholders were resident in Canada. In respect of Backx BV’s place…
Negative PUC?
The following is a summary of Marie-Emmanuelle Vaillancourt, “Negative Paid-Up Capital and Subsection 84(4) Reduction”, Tax Topics no. 1894 (June 26, 2008). What are the tax consequences when a corporation purports to reduce tax paid-up capital (PUC) when PUC is…
Real property registry
The Business Corporations Act (Ontario) (the “OBCA”) is being amended effective December 10, 2016, to require a corporation incorporated or continued under the OBCA to maintain a “register of ownership interests in land in Ontario”. The register must identify each…
Form matters, again
In David Anthony v Canada (National Revenue), 2016 FC 955, the taxpayer applied for judicial review of a decision of the Minister. The taxpayer had requested that the Minister adjust his return for 2001 to permit the deduction of lease…