Canada Revenue Agency

Total 280 Posts

Principal Residence Exemption and some of the “What if’s”

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In my last blog, I wrote about the role of “beneficial” ownership in the determination of whether a property qualifies for the principal residence exemption. With an acknowledgment to Keith Masterman of “Advisor.ca”, I thought I would take the opportunity to write about some other “what if’s” and how the exemption may or may not apply. As an executor or trustee, you may encounter these scenarios and it might be….

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Canada Revenue Agency, Cottage, Estate Administration, Estate Planning, Executors, Investments, Joint Tenancy, Property, Real Estate, Tax Issues, Trustee, Trusts

PRINCIPAL RESIDENCE EXEMPTION AND BENEFICIAL OWNERSHIP – AN UPDATE

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We know that if a property qualifies as a principal residence, an exemption can be claimed to reduce or eliminate any capital gain otherwise realized on the disposition of the property. Under the Income Tax Act, one of the requirements for a property to qualify as a taxpayer’s principal residence for a taxation year is that it must be “owned” by the taxpayer. In common law jurisdictions, two forms of….

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Canada Revenue Agency, Capacity Law, Estate Administration, Estate Planning, Investments, Joint Tenancy, Liability, Property, Real Estate, Tax Issues, Trustee

Post Mortem Pipeline Planning – Good Things Come to Those Who Wait

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The Canada Revenue Agency (CRA) recently ruled in respect of a post-mortem “pipeline” transaction involving a private corporation whereby the children of that last-to-die parent received valuable shares of a private corporation where the deceased had reported a deemed disposition gain on their final income tax return.
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Canada Revenue Agency, Estate Administration, Estate Planning, Tax Issues

SHARES ISSUED FOR NOMIMAL CONSIDERATION: BE WARY OF VALUATION

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Recently, the Canada Revenue Agency (“CRA”) was asked to comment on the tax consequences that may result from implementing an estate planning or income splitting arrangement which involves the issuance of shares that entitled the holder to discretionary dividends, for nominal consideration. The CRA was presented with a hypothetical small business corporation (“Opco”) with voting common and non-voting preference shares, both having the right to discretionary dividends to the exclusion….

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Business Succession Planning, Canada Revenue Agency, Estate Administration, Estate Planning, Investments, Small Business, Succession Planning, Tax Issues

Principal residence exemption – renting to a child

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The Canada Revenue Agency (CRA) was asked if a taxpayer’s property designated as his “principal residence” but rented and lived in by his son continued to qualify as his “principal residence” for the purpose of claiming a principal residence exemption to shelter a gain from personal tax.
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Canada Revenue Agency, Cottage, Disability, Elder Care, Estate Administration, Estate Planning, Executors, Real Estate, Tax Issues
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