Dates and location
Pricing
Hours
Dates and location
Pricing
Hours
Description
The anti-avoidance rules in Section 55 of the Income Tax Act (ITA) now apply to a greater number of private corporations. Practitioners and other tax professionals must now consider Section 55 for all intercorporate dividends to avoid unexpected tax.
Section 55 of the Income Tax Act (ITA) contains rules that can convert a tax-free intercorporate dividend to a capital gain. Previously, the anti-avoidance rules in Section 55 rarely applied to the tax planning of private corporations, but amendments to Section 55 have changed that. The broad manner in which these rules are written, along with CRA’s evolving interpretation of the rules, creates difficulty in understanding the application of such rules in both theory and practice. This seminar intends to provide an improved basis for understanding these rules and their application.
Topics Include:
- Overview of section 55
- The purpose test
- The exemptions that remain relevant to private corporations
- The calculation of safe income on hand
- The allocation of safe income on hand to the issued shares
- CRA statements and administrative policies in respect to the application of these rules
NOTE: This course description has been revised and reflects updates for 2024. If you have any questions, please contact pdevents@cpaontario.ca.
Key Takeaways
By the end of this course, participants should be able to:
- Discuss the purposes of the anti-avoidance rules in section 55 and identify transactions where they might apply.
- Identify when the “purpose test” in section 55 would apply to a dividend.
- Apply the rules in 55(3) to determine if any exceptions apply to a dividend.
- Have a general understanding of 55(3)(b) butterfly transactions.
- Calculate the safe income on hand in various common situations.
- Identify how much of the safe income on hand is attributed to the types of shares typically issued by private corporations.
- Be aware of the CRA’s position on the application of section 55 to various types of dividends.
Who Will Benefit
This seminar is applicable for any professionals working in or with private corporations, including general practitioners or tax specialists seeking a refresher or update on the rules of Section 55.
Prerequisite(s)
Participants should already have a strong understanding of existing tax rules in the ITA.
How to Access the Course
This course is a live webinar. You must attend the live course to receive verifiable CPD hours. We recommend you join five minutes prior to the scheduled starting time. To get the full experience of this interactive course, use a computer that has video and microphone capabilities.
Electronic material can be accessed one week prior to the course and should be downloaded in advance.
Registration, cancellation, withdrawal and all other CPA Ontario PD policies can be found here.
Speaker(s)
Babar Khan has over 12 years of experience working primarily with the Big 4 Accounting firms in US and Canadian cross-border tax compliance & advisory area. Babar also teaches BBA and MBA courses at Canada’s Schulich School of Business. In addition, Babar has been involved in teaching with Chartered Professional Accountants of Ontario. He also sits on the board of a UK based EdTech company. Babar holds an MSc (Tax) from University of Oxford (UK), an MBA from Schulich School of Business and a BBA from University of Toronto. He is also a dual US and Canadian CPA.