Subsection 246(1) - Benefit conferred on a person
Cases
Consultants Pub Création Inc. v. Canada, 2008 DTC 6610, 2008 FCA 60, aff'g Massicotte v. The Queen, 2006 TCC 618
The taxpayer wholly owned a corporation ("Amadéus") which, in turn, wholly owned another corporation ("Pub Création"), and the taxpayer was also...
The Queen v. Kieboom, 92 DTC 6382 (FCA)
S.245(2)(c) applied where the taxpayer permitted his wife and, later, his children, to subscribe for non-voting common shares of his private...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 74.1 - Subsection 74.1(1) | 99 | |
| Tax Topics - Statutory Interpretation - Interpretation Bulletins, etc. | 67 |
Sweeney v. The Queen, 90 DTC 6507 (FCTD)
In 1950, a written agreement between the taxpayer's father and the taxpayer provided that the son could purchase his father's shares in a company...
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|---|---|---|
| Tax Topics - General Concepts - Fair Market Value - Other | 166 |
Boardman v. The Queen, 85 DTC 5628, [1986] 1 CTC 103 (FCTD)
Since the taxpayer's legal obligations to his divorced wife were met by a court order which ordered the Registrar of Land Titles to transfer title...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 56 - Subsection 56(2) | 146 | |
| Tax Topics - Income Tax Act - Section 69 - Subsection 69(4) | 32 |
Mansfield v. The Queen, 83 DTC 5136, [1983] CTC 97 (FCTD), aff'd 84 DTC 6535, [1984] CTC 547 (FCA)
A company netted no cash from the sale of a $5,000 convertible debenture to its employee because it deposited with a bank an amount equal to the...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 7 - Subsection 7(1) - Paragraph 7(1)(a) | 195 |
The Queen v. Immobiliare Canada Ltd., 77 DTC 5332, [1977] CTC 481 (FCTD)
By purchasing debentures of a sister Canadian resident corporation from its non-resident parent the taxpayer eliminated withholding taxes that...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) | sale of bond with accrued interest did not satisfy interest | 170 |
| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(b) | sale proceeds allocable to expectancy of interest were not interest receipt | 126 |
| Tax Topics - Income Tax Act - Section 76 | 103 |
The Queen v. Esskay Farms Ltd., 76 DTC 6010, [1976] CTC 24 (FCTD)
The taxpayer, wished to sell land to the City of Calgary in consideration for two annual instalments in order to defer a portion of the gain to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Agency | 118 | |
| Tax Topics - General Concepts - Evidence | 75 | |
| Tax Topics - General Concepts - Sham | no sham if documents describe intended legal rights | 338 |
| Tax Topics - General Concepts - Tax Avoidance | no sham if documents describe intended legal rights | 338 |
| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(2) | 137 | |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(n) | 195 | |
| Tax Topics - Income Tax Act - Section 245 - Old | 55 | |
| Tax Topics - Statutory Interpretation - Provincial Law | 52 |
David v. The Queen, 75 DTC 5136, [1975] CTC 197 (FCTD)
As a result of transactions wherein the shares of a company held by the taxpayers were purchased on behalf of a pension plan which then caused the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Evidence | 26 | |
| Tax Topics - Income Tax Act - Section 84 - Subsection 84(2) | 315 |
Indalex Ltd. v. The Queen, 88 DTC 6039, [1988] 1 CTC 60 (FCA)
It was found that the taxpayer, by purchasing aluminium from a Bermudan affiliate at a price that was 5% higher than what it would have paid if it...
Laxton v. The Queen, 88 DTC 6008, [1988] 1 CTC 19 (FCTD), rev'd , in part, 89 DTC 5327 (FCA)
In a joint venture agreement it was agreed that an individual member of the joint venture ("Laxton") would be paid an annual management fee equal...
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|---|---|---|
| Tax Topics - Statutory Interpretation - Specific v. General Provisions | 65 |
MNR v. Enjay Chemical Co. Ltd., 71 DTC 5293, [1971] CTC 535 (FCTD)
In finding that a forgiveness of a portion of the trade indebtedness owing by the taxpayer to a U.S. affiliate would have given rise to a taxable...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 54 - Adjusted Cost Base | 28 | |
| Tax Topics - Income Tax Act - Section 9 - Forgiveness of Debt | debt forgiveness related to inventory of operations | 178 |
See Also
Pelletier v. The Queen, 2004 DTC 3176 (TCC)
Although benefits were conferred on the taxpayers by virtue of their being able to acquire shares of a private company worth $300,000 for a...
Husky Oil Ltd. v. The Queen, 95 DTC 316 (TCC), aff'd 95 DTC 5244 (FCA)
The taxpayer, which needed to "shelter" a capital gain previously realized by it, purchased from a vendor with which it dealt at arm's length the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Fair Market Value - Shares | 76 | |
| Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) | 129 |
Ovis Brooks v. Minister of National Revenue, 91 DTC 639, [1991] 1 CTC 2551 (TCC)
The taxpayer was deemed under former s. 245(2) to have disposed of an "economic interest" in a corporation wholly-owned by him when he caused it...
Administrative Policy
6 December 2016 External T.I. 2016-0666841E5 F - Sale of property for POD less than FMV
Opco is held somewhat equally by three holding companies, each wholly-owned by an individual (A, B or C) who is unrelated to the others. Opco...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(1.4) - Paragraph 15(1.4)(c) | application to Holdco shareholder of Opco where Opco conferrred a benefit on child of Holdco's shareholder | 210 |
| Tax Topics - Income Tax Act - Section 56 - Subsection 56(2) | potential application to immediate shareholder re benefit on indirect shareholder | 207 |
14 March 2016 External T.I. 2016-0626781E5 - Neuman Type Situation
The only issued and outstanding share of Opco (which has retained earnings of $500,000) is 1 Class A common share, with a fair market value of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(1) | s. 15(1) might apply where spouse subscribes nominal consideration for Opco shares and receives a large discretionary dividend | 226 |
| Tax Topics - Income Tax Act - Section 56 - Subsection 56(2) | s. 56(2) likely non-applicable where spouse subscribes nominal consideration for Opco shares and receives a large discretionary dividend | 262 |
| Tax Topics - Income Tax Act - Section 73 - Subsection 73(1) | spousal rollover for Kieboom disposition of economic interest | 82 |
16 April 2012 External T.I. 2011-0411491E5 - Taxation of distributions of a US LLC
In…2011-0411491E5, CRA commented on an interest in a United States Limited Liability Corporation (LLC) held by an Alberta Unlimited Liability...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(1) | taxable benefit where US taxes on LLC income allocated to indirect Cdn member are paid by LLC or intermediate ULC | 161 |
24 June 2015 External T.I. 2015-0575911E5 F - Benefit to shareholder or conferred on a person
Corporation A, is wholly owned by Holdco, which has equal unrelated Shareholders 1, 2, 3 and 4. Corporation A disposes of a capital property to...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(1.4) - Paragraph 15(1.4)(c) | benefit only conferred on one shareholder (the husband) if wife of one of four sibling shareholders receives benefit | 327 |
| Tax Topics - Income Tax Act - Section 56 - Subsection 56(2) | benefit conferred on spouse of individual shareholder of parent | 253 |
3 March 2015 Internal T.I. 2014-0527841I7 F - Avantage imposable pour aéronef
In a wholly-owned stacked structure of three Corporations (C holding D, holding E), Corporation E acquired an aircraft for business use but with...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(7) - Paragraph 13(7)(c) | apportionment of aircraft use between business and personal | 74 |
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(1) | benefits from personal use of corporate aircraft based on the cost of similar benefit from arm's length supplier | 174 |
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(1.4) - Paragraph 15(1.4)(c) | s. 15(1.4)(c) applied to extend scope of Massicotte indirect benefit doctrine | 170 |
12 December 2012 Internal T.I. 2012-0464411I7 - Indirect Benefit
A taxable Canadian corporation (Holdco) which is wholly-owned by a trust of which Mr. A is the sole trustee and is a discretionary beneficiary,...
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|---|---|---|
| Tax Topics - Income Tax Act - 101-110 - Section 105 - Subsection 105(1) | interest-free loan | 113 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(e) | fee re distribution borrowing | 159 |
16 April 2012 External T.I. 2011-041149
A Canadian-resident individual owns all the shares of an Alberta unlimited liability company which, in turn, owns a majority of the membership...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Dividend | 157 |
10 January 2011 Internal T.I. 2009-0344251I7 - Application of subsection 246(1)
In a situation where a second-tier subsidiary provides a benefit to the shareholder of a first-tier corporation, s. 246(1) can be applied on its...
25 March 1994 T.I. 933550 (C.T.O. "Interest Reduced 15(1) Benefit")
"It our general position that the term 'shareholder' as used in subsection 15(1) of the Act would not include a person who indirectly controls a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(1) | 99 |
93 A.P.F.F. Round Table, Q.17
Where a taxpayer transfers assets to an unrelated corporation applying the s. 85(1) rollover, it is not possible to rule out the application of...
24 March 1993 T.I. (Tax Window, No. 38, p. 1, ¶2490)
Re potential application of s. 246(1) to a holder of common shares where his father exchanges preferred shares of the corporation for preferred...
90 C.R. - Q.47
Where a Canadian corporation borrows funds from an arm's length lender and the Canadian corporation's non-resident parent guarantees the loan for...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 214 - Subsection 214(15) | 100 |
80 C.R. - Q.55
The listing in IT-453 of conferral-of-benefit situations was not intended to be comprehensive.
IT-239R2 "Deductibility of Capital Losses from Guaranteeing Loans for Inadequate Consideration and from Loaning Funds at less than a Reasonable Rate of Interest in Non-arm's Length Circumstances"
Former s. 245(2) may have been applied in situations where there is a material benefit to other shareholders as a result of a minority shareholder...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(g) - Subparagraph 40(2)(g)(ii) | 265 |
Subsection 246(2) - Arm’s length
Cases
Jobin v. The Queen, 78 DTC 6538, [1978] CTC 493 (FCTD)
What is now s. 245(3) did not apply to an arm's length sale of all the shares of a company, an operation which admittedly entailed the stripping...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(2) | 20 |
See Also
Extendicare Health Services Inc. v. MNR, 87 DTC 5404, [1987] 2CTC 179 (FCTD)
"[T]he term 'bona fide', when used as an adjective, is generally taken to mean 'honestly', 'genuinely' or 'in good faith'."
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Statutory Interpretation - Redundancy/reading in words | 37 |