Archive for the 'Corporations' Category
Friday, March 12th, 2010
Assume that A and B, who deal at arms length, own 55 and 20 common shares in the capital of Opco respectively. A and B also own 95 and 5 common shares in the capital of Holdco respectively. Assume that B’s tax adviser suggests to her that she can sell her common shares in the capital of Opco to Holdco for a purchase price equal to $400,000 cash. What could possibly go wrong? See Emory v. The Queen, 2010 TCC 71, for the answer to that question. (more…)
Posted in Cases, Corporations, Individuals | No Comments »
Thursday, March 11th, 2010
I’ve seen a number of cases where a family member consents to be a director of a corporation—exactly why nobody seems to know after the fact—and then ends up being assessed for unremitted source deductions. The family member might be uneducated and barely able to speak English, but that won’t stop the assessments. The CRA and the Ministry of Revenue are unsympathetic. The courts are less cold-blooded it seems. (more…)
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Wednesday, November 18th, 2009
Don’t forget the triangular amalgamation. While these types of amalgamations are more typical in the public company context, they can be a useful tool for private company deals too. (more…)
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Friday, November 13th, 2009
Last week, I gave a presentation for the Hamilton Law Association on eligible dividends at its annual Corporate Commercial update. You can find a copy of a sample resolution for eligible dividends here. Use at your own risk!
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Monday, October 26th, 2009
The following article appeared in the latest edition of the Hamilton Law Association Law Journal. (more…)
Posted in Corporations | 1 Comment »
Thursday, October 8th, 2009
In a post I wrote about a year ago, I complained about the CRA’s then-recent pronouncements on control premiums. The CRA, at the most recent Canadian Tax Foundation BC Conference, recanted this position, at least in part, as follows: (more…)
Posted in CRA News, Corporations, Individuals | No Comments »
Saturday, September 26th, 2009
In Coutre v. The Queen, 2009 TCC 456, the taxpayer tried to argue that, if an assessment under subsection 15(1) is made against a shareholder, then the Minister, to prevent double taxation, must reduce the benefit by the amount of any outstanding shareholder loan. (more…)
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Thursday, September 17th, 2009
Consider the position of Lossco and Profitco, each a wholly-owned sub of Parentco, where one has non-capital losses in a year equal to the taxable income of the other in that same year. Between them, they have not earned profits, but the Income Tax Act requires Profitco to pay taxes anyway because the Act does not permit related corporations to file consolidated returns. What to do? (more…)
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Monday, September 14th, 2009
In a post I wrote last year, I stated
According to the CRA, it is not necessary to use cash to pay the dividend. A corporation can pay a dividend using a note, but the payee must accept the note as absolute payment of the dividend.
(more…)
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Tuesday, September 1st, 2009
I’ve seen a number of transactions lately where the owner of a life insurance policy proposes to transfer it to a corporation controlled by the owner. The benefits of corporate-owned insurance are well-known, of course, but such a transfer could also permit the owner to withdraw significant amounts of money from the corporation tax free. (more…)
Posted in Corporations, Individuals | No Comments »