The CRA doesn’t like it when trusts purport to roll out property to a Canadian corporation to which a non-resident beneficiary has assigned his or her capital interest. See technical interpretation 2017-0683021I7 (which I discuss here), 2021-0879021C6 and the Preston…
Shareholder loan repayment after death
In technical interpretation 2012-0442911C6 (June 2012), the CRA confirmed that subsection 15(2.6) will apply to prevent the amount of a shareholder loan from being included in the shareholder’s income if his estate repays the loan before the end of the…
Gifts by Will
S 161(7) provides that interest on taxes payable for a year should be computed without reference to any reduction of tax payable resulting from the carryback of donation credits where a gift is made in a subsequent taxation year. The…
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.
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…
New trust reporting rules
The new trust reporting rules require a trust to provide information about settlors, trustees and beneficiaries. The rules also require a trust to provide information about every person “who has the ability (through the terms of the trust or a…
Trustees and acquisitions of control
Under the Income Tax Act (Canada) (the “Act”),1 the acquisition of control of a corporation can cause a number of unwanted consequences, including a deemed year-end and the restriction or elimination of loss carry forwards. Practitioners need to be aware…
Post-mortem charitable giving using corporate-owned insurance
Mr X dies owning the shares of Opco. Opco receives a large payout under a life policy it held on X’s life. X’s Will provides for a gift to a charity. How does the estate make the gift using the…
Trusts and Dividends, Again
The CRA believes that a dividend paid to a trust that is then paid to an individual during a year is not allocated until the end of the year (ie December 31 for inter vivos trusts) (CRA technical interpretation 2016-0647621E5,…