Principal Issues: [TaxInterpretations translation] Does the CRA remain of the view that its position on the cash damming technique outlined in paragraph 16 of IT-533 is still valid?
Position: Yes.
Reasons: The Supreme Court's findings in Lipson did not invalidate that position.
FEDERAL TAX ROUNDTABLE
APFF CONFERENCE 2010
Question 4
Cash damming
In response to Technical Interpretation Request No. 2007-0263241E5 (footnote 1), the CRA indicated that when the Supreme Court of Canada renders its decision in Lipson v. The Queen (footnote 2) (hereinafter "Lipson"), it would consider the implications of that case and would publicly announce the impact of that decision once its review is complete. However, the CRA added that its position on the cash damming technique, as set out in paragraph 16 of IT-533 (footnote 3), remained valid until that announcement.
The Lipson decision was rendered by the Supreme Court of Canada in January 2009.
Question to the CRA
Following the CRA's review of the tax consequences of that case in relation to the cash damming technique, does the CRA remain of the view that its position on that technique as set out in paragraph 16 of Interpretation Bulletin IT-533 is still valid?
CRA Response
Following the Lipson case, the CRA is of the view that the position stated in paragraph 16 of Interpretation Bulletin IT-533 remains valid.
Mélanie Beaulieu
(613) 957-9226
October 8, 2010
2010-037354
FOOTNOTES
Due to our system requirements, footnotes contained in the original document are reproduced below:
1 CANADA REVENUE AGENCY, Technical Interpretation No. 2007-0263241E5, January 14, 2008.
2 2009 D.T.C. 5016, [2009] 1 C.T.C. 314 (SCC); [2007] 3 C.T.C. 110 (FCA).
3 CANADA REVENUE AGENCY, Interpretation Bulletin IT-533, "Interest Deductibility and Related Issues”, October 31, 2003, par. 16.