The Part VI.1 tax rules, which date from the late 1980s, can apply in unexpected and unhelpful ways to transactions that have nothing to do with the harm at which the rules were aimed. (The Department of Finance, in other…
Dividends to a trust and Part VI.1 tax
Opco wishes to redeem low-low preference shares held by a family trust, which proposes to allocate the resulting deemed dividend to a beneficiaryco (Benco). Will Part VI.1 tax apply to Opco? If the preference shares are subject to a price…
TPSs and PACs
The CRA has previously stated that a deemed dividend arising on the redemption of a taxable preferred share (TPS) for a “specified amount” will not be an excluded dividend for the purposes of Part VI.1 of the Income Tax Act…