Corporate Tax, Thorsteinssons LLP updates


Contributed by Thorsteinssons LLP
Subjecting transfers of beneficial ownership to property transfer tax is not as simple as it might seem
  • Canada
  • March 16 2018

The British Columbia Property Transfer Tax Act applies only to registered transfers of real property. However, significant real property-related tax changes are rumoured to be proposed in the upcoming provincial budget. Any amendment to the act that would tax transfers of beneficial ownership should not be made haphazardly. Such an amendment must be joined by, among other things, a mechanism to relieve the tax where the beneficial ownership is transferred to an affiliate.

Taxation of bitcoin and other cryptocurrencies
  • Canada
  • March 09 2018

At a basic level, cryptocurrencies constitute property under the Income Tax Act. As such, dispositions of cryptocurrencies ordinarily lead to income tax consequences. Although cryptocurrencies are an exciting development, along with the rewards come a variety of risks, not least of which is tax. Failure to comply with all applicable tax obligations can result in severe penalties and hefty arrears interest.

Federal Court of Appeal confirms 'half-loaf' plan is subject to GAAR
  • Canada
  • February 23 2018

The latest chapter in the story of the 'half-loaf' plan was recently penned by the Federal Court of Appeal. The case concerned a plan by which the taxpayer intended to split the capital gains on a share sale to an arm's-length purchaser between him and his wife and thus benefit from both of their lifetime capital gains exemptions. On appeal, the taxpayer argued that none of the conditions of the general anti-avoidance rule had been met; however, the Federal Court of Appeal disagreed.

Door closes on out-of-time objections under Section 220(2.1)
  • Canada
  • February 16 2018

The Federal Court of Appeal has held that the minister of national revenue has no discretion to admit a taxpayer into the objections regime under Section 220(2.1) of the Income Tax Act. Applying the implied exception rule of statutory interpretation, the court chose an interpretation that gave effect to more specific provisions (the objections regime), and held that taxpayers must comply with the strict time limits set out in the act.

Tax loss transactions denied
  • Canada
  • January 19 2018

The Tax Court recently decided a new case under the general anti-avoidance rule in Section 245 of the Income Tax Act, holding that the rule applies to restrict losses in an attempted non-acquisition of control transaction. However, the court offered up no analysis to support the allegation that Clause 256(7)(b)(iii)(B) had been abused in this case. Instead, it relied on late-stage financing through the use of shares.

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