Forgive, But Don't Forget…
(A LESSON IN DEBT FORGIVENESS)

By Cindy Collins,
Taylor Leibow LLP

Forgiveness is a noble trait, but be forewarned of the potential tax consequences that can result from such forgiveness.

Often when purchasing or acquiring a new business, existing debt of that corporation may either be forgiven or included in the purchase at a discounted price.

In addition to other considerations that will arise from the acquisition of control of a corporation, a purchaser should be cognizant of...

Benefits of Using Canadian Unlimited Liability Companies by U.S. Shareholders

By Enzo Morini, Williams and Antonio Calabria,
Williams and Partners LLP

The use of an Unlimited Liability Company ("ULC") continues to be a unique and favoured vehicle by U.S. acquirors of Canadian businesses or of U.S. businesses expanding into Canada.

Currently, a ULC can be formed under legislation in Alberta, Nova Scotia, Prince Edward Island or British Columbia. Shareholders of a ULC are generally insulated from liability for the debts and activities of the company. However, shareholders are liable for the ULC's debts and liabilities if the ULC liquidates or dissolves and cannot pay such accounts. ...

Some Clarifications to the TOSI Rules Related to Inheritance

By Trista Gallant,
Buckberger Baerg LLP

Much has been written and talked about with respect to the "Tax on Split Income" ("TOSI") changes. As taxpayers and practitioners, we have been through a year and a half with these new rules applying and many (most) of us are still uncertain about the application of TOSI in certain circumstances. Canada Revenue Agency (CRA) has been continuously providing clarifications and addressing questions around these relatively new rules as they prove difficult to interpret in some situations.

Oversimplified, TOSI may apply when a shareholder receives dividends or interest, or realizes a capital gain, from a private corporation, and a related person is actively engaged in the corporation's business or holds at least 10% of its value. ...