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Moodys Gartner musings

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Planning using principal residence trusts for immigrants to Canada

As many of our readers know, the Canadian Income Tax Act (the “Act”) provides for an unlimited exemption from the imposition of Canadian income tax on the gains resulting from a disposition of a “principal residence”. Access to the principal residence exemption can be valuable, especially in cities (e.g. Vancouver, Toronto, Calgary) where residential properties Read More »

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Increases to Alberta Tax Rates

For better or worse, on June 18, 2015, Alberta’s newly elected NDP provincial government released Bill 2, which immediately received First Reading in the Legislature and passed. Even though the Bill is still not law, it will undoubtedly pass into law soon. Bill 2 contains corporate and personal tax increases that are, quite frankly, shocking. While “shocking” may not be a correct description, especially since the NDP had campaigned on the tax increases that are contained in the Bill, many Alberta tax practitioners, like us, are still shocked that such abrupt increases are actually going to see the light of day.

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If it quacks like a Partnership, it is a… Corporation?

At the Canada Revenue Agency (“CRA”) Roundtable session during the International Fiscal Association Conference on May 28, 2015, the CRA was once again asked to comment on the issue of foreign entity classification. In contrast to the CRA’s usual response of merely reaffirming the use of the “two-step” approach, the CRA revealed several surprising insights about their views. The CRA indicated that they are currently analyzing entity classification for Florida and Delaware Limited Liability Limited Partnerships (“LLLPs”) as well as Florida Limited Liability Partnerships (“LLPs”), none of which have previously been the subject of specific determination by the CRA with respect to their classification.

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No Social Security number, goodbye passport?

As another season of summer travel starts, Canadian residents with US ties should make sure they are thinking carefully about their tax obligations. Tax compliance may not be first in the minds of most people planning trips to the US, but Congress and the Obama administration certainly are thinking about the combination of travel and taxation. If a proposed law is enacted, US passport holders with tax debt or without a valid Social Security number could, as soon as 2016, find themselves losing that passport and maybe even being forced to remain in the US until the issues are resolved.

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Solicitor client privilege in tax matters

In a prior blog post, I said that solicitor client privilege remains strong in Canada. A recent judgment of the Federal Court included two throwaway comments, so easily quotable, that appear to suggest that solicitor client privilege does not extend to “tax planning” advice.

In Canada v. Revcon Oilfield Constructors Incorporated, 2015 FC 524, the Federal Court offered the two gems that the government will be sure to cite when they want to seek tax planning documents from a taxpayer.

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Renunciation of US citizenship is on the rise

On May 7th, 2015, the US Treasury Department published its first quarter 2015 list of individuals who have chosen to expatriate and it was yet again an eye opening number. The 1,335 published names is the highest quarterly figure ever reported in the Federal Register.

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