Association Rules in the Income Tax Act: Scope and Implications

The concept of association is key in triggering a number of special rules mostly geared toward limiting tax benefits otherwise available to members of privately-owned corporate groups.  However it is a relationship that can catch practitioners unaware if they are not familiar with all the ways that private corporations (Canadian-Controlled Private Corporations) can be deemed to and be assessed by the CRA as associated.

Join Vitaly Timokhov of TaxChambers LLP for a thorough discussion of the association rules, building up the fundamentals of association through the complex legislative provisions and exceptions.  All provisions will be illustrated by the relevant CRA rulings and Tax Court cases.  Particular attention will be given to the effect of the association rules on the 2018 Federal Budget and the SBD grind for associated corporations earning investment income.  The presentation will also include an anti-avoidance case study based on the recent case law, including the Moules Industries, and prior cases on the multiplication of SBD.

 

More specifically, this webinar will cover:

 

  • Associated Corporations: Why does it matter?
  • What tax attributes of a private corporation/CCPC are affected by, affiliation (small business deduction, SBD grind on passive income, etc.).
  • Association through control.
  • The concept of control for association rules.
  • Control, directly or indirectly, in any manner: the meaning and scope.
  • De jure control v. de facto control.
  • Deemed control.
  • Control by the group.
  • Control through the “market value”.
  • Options and Rights.
  • Association through a Third Corporation and through a trust, including Discretionary Trust.
  • Disassociation and multiplication of small business deduction: past and present.
  • Election not to be associated: T2SCH28 (Election not to be an associated corporation) and Form T2144.
  • Statutory Anti-Avoidance (subsection 256(2.1)) and the GAAR.
  • Assessment policies of the CRA re association and known risks.

 

Note that Vitaly is presenting two webinars. This webinar will be followed by a webinar on control, “relatedness” and “connectedness” for the purposes of the Act, to air in March 2020.

Target Audience

This webinar will be of most interest to tax practitioners & accountants, practicing independently or in small to medium sized firms, with the focus on tax planning and compliance services for small to mid-sized privately owned enterprises and private clients holding private corporations though trusts and estates.

Professional Development Credits

Wolters Kluwer Canadian professional development programs are designed to meet the continuing education requirements of a variety of professional associations. These requirements do vary by association and region. Please consult your provincial association to ensure this webinar meets the continuing professional development standards for your specific situation.

This Webinar Includes:

  • 30 days to review the webinar recording
  • Print version of the presentation slides 


Biography:

This webinar is being presented by Vitaly Timokhov, JD, LLM (Taxation, NYU), a Partner with TaxChambers LLP:

Vitaly Timokhov

 Vitaly specializes in providing sophisticated tax advice. He practises exclusively in the area of Canadian federal income taxation and tax planning, with an emphasis on international and domestic reorganizations, mergers and acquisitions, and personal tax planning for Canadian and foreign-based corporations and individuals. In particular, Vitaly has experience advising clients on tax-effective domestic and cross-border financing, the taxation of U.S. citizens and green card holders in Canada, and the taxation of trusts and estates. He has also taught international taxation as an adjunct professor at Osgoode Hall Law School.

 Vitaly attended Queen’s University Faculty of Law where he was granted a Newton Rowell Scholarship and received a National Tax Award. After articling at a leading Canadian law firm, he studied taxation as a Gerald Wallace Scholar at New York University School of Law where he earned his LL.M. and served as an editor of the NYU Journal of International Law and Politics.

 A prolific publisher, Vitaly has written more than 20 articles on Canadian and international taxation and corporate and commercial law. He is also the principal author and Canadian editor of the Tax Advisor’s Guide to the Canada-U.S. Tax Treaty – a leading treatise on international taxation. Vitaly is a frequent speaker at conferences and workshops, and is actively involved in the International Law Section of the American Bar Association.

 Education:

New York University School of Law, LL.M., 2002
Queen’s University, LL.B., 1999

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