Presentation on theme: "Robin MacKnight Robert Martini. November 9, 2006 Technical amendments October 16, 2006 Notice of Ways and Means Motion – Eligible Dividends December 20,"— Presentation transcript:
November 9, 2006 Technical amendments October 16, 2006 Notice of Ways and Means Motion – Eligible Dividends December 20, 2006 – CRA Guidelines on Eligible Dividends Ontario Bill 74 – “Strengthening Business Through a Simpler Tax System Act, 2006” Recent cases
Technical Amendments November 9, 2006 technical amendments (includes revised NRT and FIE rules) What to watch for
Technical Amendments: Stock Dividends Proposed non-recognition of cost base Dividends subject to s. 112 deduction not included in ACB Impact on stock dividend planning? OBCA proposed amendments but proposals could thwart use of stock dividends in reorganizations
Technical Amendments: Safe Income Strips Similar to stock dividend issue PUC increase/deemed dividend problem cost base not increased on deemed dividends where contributed surplus converted to PUC Uncertainty? What alternatives should be considered?
Technical Amendments: Cost Base Policy Rationale for these proposals? Alternative method: daylight loan pay actual dividend recapitalize If same result, why introduce this rule?
Technical Amendments: Loss of Status as Testamentary Trust Anti-avoidance rule Watch for trust debt and liabilities Exceptions prevent loss of status
Technical Amendments: Other Too numerous to mention Don’t assume they are inconsequential Could affect your situation
Eligible Dividends October 16, 2006 revised NWMM Some changes to opening GRIP “full rate” taxable income and M&P intercompany dividends Uncertainty remains dividend streaming?
Eligible Dividends – CRA Guidelines CRA issued Guidelines on December 20, 2006 Guidelines set out notification procedures CRA position on: non-residents partial dividends
Eligible Dividends: Issues and Considerations Consider share reorganization class for resident shareholders class for non-resident shareholders Investment income can you restructure? Goal – deferral plus eligible dividend treatment possible?
Ontario Bill 74 “Strengthening Business Through a Simper Tax System Act, 2006” Stated Benefits: single tax form single tax collector one set of income tax rules
Ontario Bill 74 One set of income tax rules? still differences transitional provisions Taxation Act – combines ITA and CTA
Recent Cases Book-keeping error or retroactive tax planning? Irmen 9100-2402 Quebec Inc. Gambling winnings not taxable Leblanc 2006 TCC 680 Waivers – Honeywell 2007 FCA 22 De Facto directors – Hartrell
Recent Cases RRSP strips – Nunn FCA Trusts – Rose v. Rose Piercing the corporate veil – Wildman v. Wildman