Home Buyers Plan - Acquisition of a partial interest in a home is sufficient to qualify for the home buyers plan.


In an April 30, 2018 Technical Interpretation (2017-0730991E5, Doiron, Wayne), CRA was asked whether a married couple who each acquired a partial interest in a home, with the original owner retaining an interest, would qualfy for an HBP withdrawal.

CRA confirmed that joint ownership is sufficient to permit participation in the HBP. In addition, either legal ownership or beneficial ownership would be sufficient, so it is not essential that the individual’s name be on title. CRA noted that an agreement in writing to acquire the home would be required under the HBP criteria (Section 146.01).

For further information see Video Tax News Monthly Tax Update Newsletter, Issue No. 444.

Federal Budget Commentary - Early Bird Discount ends Feb 11/19


Major changes are expected in this pre-election budget!

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Pipeline Easement - A signing bonus granted for early signing of an easement formed part of the proceeds received on the sale of the interest in related land and was a capital gain.


A June 26, 2018 Tax Court of Canada case (Ritchie vs. H.M.Q., 2015-1874(IT)G) reviewed the tax implications of payments of over $250,000 received as a “signing bonus” (SB) in respect of early signing of agreements to permit the installation of two pipelines on the taxpayer’s land. The land was also used by the taxpayer’s corporation in a farming business.

The individual taxpayer personally reported the SB as a capital gain. He had also received $19,782 as consideration for the easement itself, which was reported as a capital receipt.

The corporation reported further payments in respect of insurance ($111,422), temporary work space($15,532), and disturbance damages ($38,202) as ordinary income. Signing the related agreements was a condition of receiving the SB.

CRA had reassessed the taxpayer on the basis that the SB was ordinary income and not a capital gain. The taxpayer argued before the Court that it was a non-taxable windfall, contrary to his original return which reported it as a capital gain. The allocation of the various payments between the taxpayer and his corporation, and the tax treatment of the payments other than the SB, were not disputed. The classification of the SB (income, capital gain or windfall) was the only issue before the Court.

Taxpayer wins – in part
CRA argued
 that the SB was received in the course of the taxpayer’s income-earning activity of farming. The Court dismissed this argument since the corporationnot the taxpayercarried on the farming business. In support of this, the Court noted that the corporation reported all payments related to the farming business, while the taxpayer reported all payments related to ownership of the land.

Alternatively, CRA argued that the payment was deemed to be income as an incentive or inducement(Paragraph 12(1)(x)). The taxpayer did not challenge the SB’s classification as an inducement; however, he argued that an exception (Subparagraph 12(1)(x)(viii)) to the deemed income provision was applicable. He argued that, since the SB was in respect of the agreements related to the easement, it would meet the exception requiring that the payment reasonably be considered made in respect of the acquisition of an interest in the taxpayer’s property.

The Court agreed. As a result, it was considered additional proceeds for the granting of the easement. As the easement was a capital disposition, the related SB was correctly reported as a capital gain.

Finally, the Court dismissed the argument that the payment was a non-taxable windfall due to a lack of relevant evidence.

For further information see Video Tax News Monthly Tax Update Newsletter, Issue No. 444

When New Years Resolutions and Tax intersect… Prescription swim goggles may be an eligible medical expense.


Medical expenses eligible for a tax credit are limited to those described in Subsection 118.2(2), many of which are detailed in Income Tax Folio S1-F1-C1. In a number of Technical Interpretations, CRA consideredthe eligibility of certain expenses:

  • prescription swimming goggles prescribed by a medical practitioner or optometrist for treatment or correction of a vision defect would be eligible medical expenses (Paragraph 118.2(3)(b), 2017-0690361E5, Shea-Farrow, Nancy, April 11, 2018); and

  • prenatal classes do not fit within any of the provisions that would qualify them for the medical expense tax credit (2017-0696851E5, Shea-Farrow, Nancy, February 21, 2018); and

  • custom mattresses, mattress toppers and pillows are not included in the list of qualifying devices or equipment (Regulation Section 5700), so would not be eligible medical expenses (2017-0724441E5, Brennan, Chris, CPA, CA, April 12, 2018).

For further information see Video Tax News Monthly Tax Update Newsletter, Issue No. 444

Multiple Corporate Beneficiaries of a Single Life Insurance Policy-Caution-Where there are multiple corporate beneficiaries, the addition to the capital dividend account may be significantly reduced.


n a May 8, 2018 Technical Interpretation (2018-0745811C6, Danis, Sylvie), CRA reiterated their prior comments (VTN 434(10)) that where multiple corporate beneficiaries receive proceeds from a single life insurance policy, the addition to the capital dividend account for each corporate beneficiary would be reduced by the full adjusted cost basis of the policy.

They further opined that where two corporations are not only both beneficiaries but also joint owners of a life insurance policy, the full adjusted cost basis of the policy would still be applied to both corporate beneficiaries. This was the case where the policy named OpCo as the beneficiary of $1,000,000 of death benefit coverage, with any excess flowing to HoldCo.

For further information see Video Tax News Monthly Tax Update Newsletter, Issue No. 444