Subsection 129(1) - Dividend refund to private corporation
Cases
1057513 Ontario Inc. v. Canada, 2015 FCA 207
During its 1997 to 2004 taxation years, the taxpayer received dividends subject to Part IV tax, and paid dividends which, if its returns had been...
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| Tax Topics - Income Tax Act - Section 129 - Subsection 129(3) | RDTOH is not reduced by unclaimed dividend refunds | 126 |
See Also
1057513 Ontario Inc. v. The Queen, 2014 DTC 1196 [at 3743], 2014 TCC 272
Bocock J found that the requirement in s. 129(1) to file a return claiming a dividend refund within three years of the year within which the...
Nanica Holdings Limited v. The Queen, 2015 DTC 1111 [at 657], 2015 TCC 85 (Informal Procedure)
The taxpayer was a Canadian controlled private company which paid taxable dividends to its shareholders in 2007 and 2008. However, it failed to...
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| Tax Topics - Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(c) | loan made to the principal of a business corporation could not be construed as a corporate loan |
Presidential MSH Corporation v. The Queen, 2015 DTC 1101 [pp. 596-610], 2015 TCC 61
The taxpayer paid taxable dividends in its 2005 to 2006 taxation years but missed the three-year deadline to apply for dividend refunds. Graham J...
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| Tax Topics - Statutory Interpretation - Interpretation/Definition Provisions | definitional term not inserted immediately after referent term | 87 |
Ottawa Ritz Hotel Company Limited v. The Queen, 2012 DTC 1172 [at 3427], 2012 TCC 166 (Informal Procedure)
The taxpayer was ineligible for a dividend refund because it did not send the required application within three years of the taxation year in...
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| Tax Topics - Income Tax Act - Section 129 - Subsection 129(3) | RDTOH not extinguished by three-year limitations period on dividend refund | 57 |
| Tax Topics - Income Tax Act - Section 162 - Subsection 162(2) | 84 |
Administrative Policy
24 November 2015 CTF Roundtable Q. 1, 2015-0610691C6 - T2 Late-Filing: Impact on Div. Refund and RDTOH
Will CRA follow recent decisions (e.g., MSH) that have not required the reduction of a corporation’s RDTOH balance where it was denied a...
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| Tax Topics - Income Tax Act - Section 186 - Subsection 186(1) - Paragraph 186(1)(b) | unclaimed divided refunds do not generate s. 186(1)(b) tax to the dividend recipient | 100 |
9 October 2015 APFF Roundtable Q. 8, 2015-0595591C6 F - Dividend Refund and Part IV Tax Payable
CRA accepts MSH and has reversed 2012-0436181E5, in now considering that a dividend refund which is not claimed on a timely basis does not reduce...
2 February 2015 External T.I. 2013-0510751E5 F - Cooperatives and Dividend Refund
In finding that an agricultural cooperative corporation, as defined in s. 135.1(1), that is a private corporation and has an RDTOH balance may be...
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Share | fractions of cooperative capital not shares | 129 |
11 March 2014 Internal T.I. 2013-0499421I7 - Application of subsection 220(2.1) to 129(1)
An extension of time to make a return using s. 220(3) does not alter or affect whether a corporation has factually filed its return of income...
18 October 2012 External T.I. 2012-0436181E5 - Part IV Tax / Denied Dividend Refund
There is a cross-redemption of preferred shares held by two connected corporations (Aco and Bco) in each other, thereby giving rise to Part IV tax...
92 CPTJ - Q.10
RC may accept the assignment of any dividend refund to which a corporation may be entitled in payment of withholding tax which the corporation...
4 March 1991 T.I. (Tax Window, No. 2, p. 15, ¶1183)
S.129(1)(a) does not permit the payor corporation to apply for less than the full amount of its dividend refund.
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| Tax Topics - Income Tax Act - Section 186 - Subsection 186(1) | 40 |
86 C.R. - Q.31
RC does not have any statutory authority to provide interest on dividend refunds.
Subsection 129(1.2) - Dividends deemed not to be taxable dividends
See Also
Speer v. The Queen, 99 DTC 157 (TCC)
The reasons for judgment include a description of an arrangement entered into prior to the introduction of s. 129(1.2) for the generation of a...
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| Tax Topics - Income Tax Act - Section 56 - Subsection 56(2) | 47 |
Canwest Capital Inc. v. The Queen, 97 DTC 1 (TCC)
The taxpayer, which was a prescribed qualifying corporation within the meaning of s. 186.2 was found to be not subject to s. 129(1.2) when it paid...
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| Tax Topics - Income Tax Act - Section 125 - Subsection 125(7) - Specified Investment Business | 44 |
Administrative Policy
10 June 2013 STEP CRA Roundtable, 2013-0480361C6 - 2013 STEP, QUESTION 12. RDTOH and Dividend Refunds
" In response to a request for an update on its position on s. 129(1.2), CRA noted that it had issued favourable s. 129(1.2) rulings on...
29 June 2009 External T.I. 2008-0296371E5 F - Capital dividends
Three children, who own the shares of Corporation A which has a capital dividend account and refundable dividend tax on hand account but owns no...
17 January 1997 T.I. 962932
"The provisions of subsection 129(1.2) of the Act will apply to a dividend in any situation where 'one of the main purposes' of acquiring a share...
23 June 1992 Memorandum 921769 (January - February 1993 Access Letter, p. 28, ¶C117-180)
It would be difficult to conclude that there has been an avoidance of Part IV tax by a recipient corporation where a related group carries out...
Subsection 129(3)
Cases
1057513 Ontario Inc. v. Canada, 2015 FCA 207
Webb JA found that the taxpayer was ineligible for dividend refunds for various years because it did not file the returns claiming the dividend...
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| Tax Topics - Income Tax Act - Section 129 - Subsection 129(1) | dividend refund requires timely filing | 141 |
See Also
Ottawa Ritz Hotel Company Limited v. The Queen, 2012 DTC 1172 [at 3427], 2012 TCC 166 (Informal Procedure)
The taxpayer was ineligible for a dividend refund because it did not send the required application within three years of the taxation year in...
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| Tax Topics - Income Tax Act - Section 129 - Subsection 129(1) | 57 | |
| Tax Topics - Income Tax Act - Section 162 - Subsection 162(2) | 84 |
Tawa Developments Inc. v. The Queen, 2011 DTC 1324 [at 1837], 2011 TCC 440
The taxpayer failed to apply for its dividend refund for a taxation year within the three year time-limit, and its dividend refund that year was...
Subsection 129(4) - Definitions
Aggregate Investment Income
Administrative Policy
9 October 2015 APFF Roundtable Q. 24, 2015-0598261C6 F - Calcul du revenu de placement total - annexe 7
Dividends which are deductible in the computation of taxable income are expressly excluded from "aggregate investment income," as defined in s....
9 May 2012 External T.I. 2012-0440781E5 - Recapture of CCA
A depreciable property of the taxpayer was rented to an associated company carrying on an active business, so that the CCA claims of the taxpayer...
Canadian Investment Income
Cases
Burri v. The Queen, 85 DTC 5287, [1985] 2 CTC 42 (FCTD)
Net rental income which a company derived from an apartment building in its 1978 and 1979 taxation years was income from property rather than...
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| Tax Topics - General Concepts - Evidence | 52 |
The Queen v. Brown Boveri Howden Inc., 83 DTC 5319, [1983] CTC 301 (FCA)
Interest earned on the investment in 30-day notes of progress payments received by a manufacturer on its long-term contracts related to money that...
Morbane Developments Ltd. v. MNR, [1983] CTC 338 (FCA), briefly aff'g 81 DTC 5362, [1981] CTC 490 (FCTD)
Proceeds received for the expropriation of land inventory were active business income notwithstanding that there was a 4-year delay between a...
The Queen v. Marsh & McLennan, Ltd., 83 DTC 5180, [1983] CTC 231 (FCA)
Interest earned, on the investment of funds received by an insurance broker, during the period before those funds had to be paid to the insurers,...
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Property | 49 |
Riviera Hotel Co. Ltd. v. The Queen, 82 DTC 6045, [1982] CTC 30 (FCTD)
The taxpayer bought and resold approximately 15 separate parcels of land over a 12-year period in addition to owning and operating a hotel. It was...
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| Tax Topics - General Concepts - Evidence | 22 |
Supreme Theatres Ltd. v. The Queen, 81 DTC 5136, [1981] CTC 190 (FCTD)
After noting (at p. 5138 (DTC)) that "there is a presumption that, since the purpose of a corporation is to make profits from carrying out its...
See Also
Ben Barbary Co. Ltd. v. MNR, 89 DTC 242 (TCC)
The taxpayer sold to a related company its sporting goods business, a gas bar and the underlying land in consideration of an interest-bearing...
King George Hotels Ltd. v. The Queen, 81 DTC 5082, [1981] CTC 87 (FCA)
It was "stressed that whether a business is an active or inactive one is ... [a question] of fact dependent on the circumstances of each case ......
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| Tax Topics - Income Tax Act - Section 95 - Subsection 95(1) - Foreign Accrual Property Income | 56 |
Administrative Policy
19 September 1991 T.I. (Tax Window, No. 11, p. 15, ¶1509)
In any case where s. 129(4.1) does not apply, the taxable gain from disposition of a life insurance policy will constitute "income from property".
Articles
Durnford, "The Distinction Between Income from Business and Income from Property, and the Concept of Carrying on Business", 1991 Canadian Tax Journal, p. 1131.
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| Tax Topics - Income Tax Act - Section 125 - Subsection 125(1) | 0 |
Foreign Investment Income
Administrative Policy
81 C.R. - Q. 25
In determining whether or not income or loss is from property, the normal rules apply.
Subsection 129(4.1)
Cases
The Queen v. Irving Garber Sales Canada Ltd., 92 DTC 6498 (FCTD)
The taxpayer, which was engaged in the sale of raw fur skins and of manufactured fur coats, had its holdings of certificates of deposit grow from...
McCutcheon Farms Limited v. Her Majesty The Queen, 91 DTC 5047, [1991] 1 CTC 50 (FCTD)
An incorporated farm which held more than $200,000 in demand deposits and which derived between 16% and 20% of its gross income from the interest...
Ensite Ltd. v. R., 86 DTC 6521, [1986] 2 CTC 459, [1986] 2 S.C.R. 509
The taxpayer made U.S. dollar deposits with commercial banks in order to reduce its net borrowing cost under a swap arrangement respecting an...
See Also
Balmoral Investments Ltd. v. The Queen, 97 DTC 802 (TCC)
Substantial interest income that the taxpayer derived from the investment of instalments from the sale of one of its hotel were property income.
Cornwall Gravel Co. Ltd. v. The Queen, 94 DTC 1709 (TCC)
The taxpayer, which was in the aggregates business, was in many cases required to secure a performance bond from a bonding company before...
Lake Superior Investments Ltd. v. MNR, 93 DTC 898 (TCC)
Rental income from a plaza held by the taxpayer as an investment, and interest income from short-term investments in mortgages and other...
Regina News Ltd. and Mid-Western News Agency Ltd. v. MNR, 93 DTC 358 (TCC)
In upholding the contention of the taxpayer ("Mid-Western") that income from surplus cash invested in short-term deposits gave rise to Canadian...
Alamar Farms Ltd. v. The Queen, 93 DTC 121 (TCC)
Royalty income that a family farm corporation derived from producing oil wells situate on the farm land was found to be income from property used...
Great Eastern Life Assurance Co. Ltd. v. Director General of Inland Revenue (Malaysia), [1986] BTC 372 (PC)
The phrase "incidental gross income" meant "merely income arising as an ordinary incident of the business" rather than "income of a particular...
Administrative Policy
19 August 1994 External T.I. 5-941599
Recapture of depreciation on the disposition of a building the rental income from which was active business income, will also be active business...
4 February 1994 External T.I. 5-932536
Where a corporation whose principal business is farming owns certain rights to take petroleum from a well located on the farm land and leases such...
Subsection 129(6) - Investment income from associated corporation deemed to be active business income
Cases
Norco Development Ltd. v. The Queen, 85 DTC 5213, [1985] 1 CTC 130 (FCTD)
The taxpayer was an equal partner with two associated corporations in a partnership (Noort Developments) which was engaged in an active business. ...
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| Tax Topics - Income Tax Act - Section 96 - Subsection 96(1) - Paragraph 96(1)(a) | 184 |
Administrative Policy
29 November 2016 CTF Roundtable Q. 15, 2016-0669731C6 - The New SBD provisions
In contrast to a problem in the July 29, 2016 draft legislation, under recently enacted s. 129(10), where an Opco earns all its income as active...
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| Tax Topics - Income Tax Act - Section 125 - Subsection 125(10) | sharing of business limit with Rentalco | 188 |
10 May 2013 External T.I. 2012-0442791E5 F - SENC - Revenu d'entreprise exploitée activement
Mr. A holds all the shares of a Canadian holding company ("Holdco") which holds all the shares of Opco. Holdco also holds 50% of the units of a...
21 October 1994 External T.I. 5-942150
Where s. 129(6) applies to deem rental income received by a corporation to be active business income, any recapture on the sale of the building...