5 October 2018 APFF Roundtable Q. 12, 2018-0768831C6 F - Tax on Split Income and Partnership -- summary under Subsection 103(1.1)

CRA confirmed that the tax on split income is inapplicable to a family partnership that invested in the stock market where the children had not contributed anything or participated in the trading decisions or other management of the partnership, given the exclusions from “split income” for dividends on shares listed on designated stock exchanges and for taxable capital gains realized on such shares. However, given such lack of contribution by them, CRA would review the application of inter alia ss. 103(1). 103(1.1), 74.1 and 96(1.8).