The amount of the deemed dividend was reduced accordingly. The TCC also reduced the amount of the deemed dividend provided in the CRA's assessment on the basis that if the transactions had been implemented in such a way that section 84.1 applied (i.e., if avoidance transactions had not been put in place), the taxpayers would have been entitled to access an amount of paid-up capital (hereinafter "PUC") that was $66,940 greater than the amount used by CRA in its calculation of the deemed dividend. The Queen (footnote 1), the Tax Court of Canada (the "TCC") found that the general anti-avoidance rule (hereinafter "GAAR") applied to the transactions in question because of an abuse of the object and spirit of section 84.1. Reasons: According to the relevant jurisprudence.įEDERAL TAXATION ROUNDTABLE 10 OCTOBER 2014 The CRA will seek a decision of the Federal Court of Appeal or the Supreme Court of Canada on whether or not there is a specific scheme under the Act for taxing any direct distribution of surplus of a Canadian corporation as a taxable dividend in the hands of individual shareholders and a specific scheme under the Act against indirect surplus stripping. The CRA has also concerns with respect to the Court's analysis of subsection 245(2). Position: The CRA is still of the view that subsection 84(2) should have applied in this particular case. Principal Issues: Position of the CRA following the TCC decision in Descarries v.
0 kommentar(er)
