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Highlights
MUTUAL FUNDS
Draft Income Tax Legislation Affecting Mutual Funds
Peter Jovicic
On September 16, 2004, draft amendments to the
Income Tax Act affecting mutual funds were released to implement certain
tax measures proposed in the March 2004 federal Budget. Peter Jovicic
examines key aspects of the Draft Legislation and highlights a number of
significant changes from the Budget Proposals. Not included in the Draft
Legislation are the proposed limitations on investments by pension funds
in business income trusts contained in Resolutions (12), (13) and (14)
of the Budget Proposals. As announced on May 18, 2004, these measures
have been suspended to allow for further consultation with interested
groups. Of particular interest is the treatment of non-resident
unitholders. The author provides a summary of these complex provisions.
CORPORATIONS/PARTNERSHIPS
Not Just About Capital Gain Stripping and GAAR ... A
"Series" of Transactions Under the Income Tax Act
Christopher L.T. Falk
The exact meaning of "series" is key to
many of the planning-related provisions of the Income Tax Act.
Unfortunately for tax advisors, neither the statutory definition of
series nor the common law meaning of series which is also incorporated
in the statutory definition is clear. Recent jurisprudence has, however,
addressed the meaning of series in both contexts. Christopher Falk
reviews the jurisprudence and sets forth what questions have been
clarified and those that remain. Tax advisors will find the author's
article to be very helpful in understanding the current state of the law
on the meaning of series.
CORPORATIONS
A Case of Substituted Property and Specified Property
– the "Bump Denial" Rules
James Yaskowich
The "bump" of inside basis under either
subsection 87(11) of the Income Tax Act for vertical amalgamations or
paragraph 88(1)(d) for the wind-ups is a favourable tax
opportunity associated with most takeovers. Unfortunately, the complex
and somewhat ambiguous bump denial rules must be avoided. For example,
if substituted property is owned by an ineligible person at any time
after the acquisition of control of the subsidiary by the parent, the
bump will be denied. James Yaskowich first describes the bump denial
rules and then illustrates their potential application through several
practical and typical examples. The Canada Revenue Agency's
administrative position is addressed and shown in the examples. The
author has provided an instructive article that will serve to help tax
advisors better understand the complexities of the bump denial rules.
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Board
Gordon S. Funt
Editor-in-Chief
Fraser Milner Casgrain LLP
Vancouver
Christopher L.T. Falk
McCarthy Tétrault LLP
Vancouver
Judith E. Harris
Osler, Hoskin & Harcourt LLP
Toronto
F. Patrick Kirby, QC
Felesky Flynn LLP
Edmonton
D. Bernard Morris
Goodman and Carr LLP
Toronto
Martin J. Rochwerg
Miller Thomson LLP
Toronto
Paul K. Tamaki
Blake, Cassels & Graydon LLP
Toronto |
