Ashvin Singh, “FCA Reinstates Narrow View of De Facto Control” 6:3 Canadian Tax Focus (August 2016): The potential expansion of de facto control in McGillivray Restaurant Ltd. (2014 TCC 357) … has been curtailed by McGillivray Restaurant Ltd. v. The…
Dividend caps
I like dividend caps on fixed-value shares. I’ve complained before about the odour emanating from shares that are entitled to unlimited dividends but that are redeemable and retractable for a fixed amount. The CRA seems to smell something too, in technical interpretation 2016-0626781E5.
File Under “Annoying”
You can file the following under “Annoying”: a non-resident that voluntarily registers for GST will also be assigned a corporate income tax account automatically. The non-resident must then go to the trouble of having the account cancelled after proving to…
No refund for you
A corporate payor doesn’t get a refund if it pays a dividend but fails to file its tax return for the year within three years. But at least RDTOH isn’t reduced either. See Dino Infanti, “FCA Agrees: Dividend Refund Timed…
Share attributes
In Neil Armstrong’s summary of a butterfly ruling (2014-0533601R3), he wrote: The reorganization started off in the usual manner with a s. 86 reorg under which the DC shareholders exchanged their old common and preferred shares for special “butterfly” shares…
Shareholder agreements and de jure control
Will a shareholder agreement that permits a minority shareholder to elect the majority of the corporation’s board confer control on the minority shareholder? The Tax Court in Kruger Wayagamack Inc. v R, 2015 TCC 90, said not if the minority…
Accounting proposal postponed
KPMG reports that the implementation of a proposal to require corporations to treat typical freeze shares as debt (with an offsetting special debit to equity) for financial statement purposes has been postponed to January 1, 2018 (from January 1, 2016).
No late-filed eligible dividend designations
Opco pays a dividend in year One, but it doesn’t believe it has any GRIP at that time, and so no eligible dividend designation is made in respect of the dividend. The CRA later reassesses Opco, and one of the…
55(2) Changes
Finance is proposing to amend 55(2) and related provisions for dividends paid after April 20, 2015. 55(2) will contain two new purpose tests. A dividend (other than an 84(3) dividend) might be caught under the new rules if one of…
74.4(4) Exception Inapplicable
74.4(4) will not apply to save an estate freeze of Opco from the corporate attribution rule where a trust holds shares in Holdco rather than shares in Opco directly. 74.4(4) would also not apply where Opco1 and Opco2 are frozen,…