Principal Issues: We are asked how to minimize the tax consequences in a given situation.
Position: None.
Reasons: Outside the ITRD’s mandate.
XXXXXXXXXX 2018-075036
June 12, 2023
Dear Sir,
Subject: Transfer of land
This letter is in response to your request dated March 15, 2018 in which you asked how to minimize the tax consequences arising from a transfer of land in a particular situation. This letter also follows telephone conversations (XXXXXXXXXX) on December 12, 2019 and July 13, 2020, specifically the conversation on December 12, 2019 where we explained that your question is not a matter of interpretation of the Income Tax Act (the "Act"). We apologize for the delay in responding to you in writing.
Our Comments
As stated in Information Circular IC70-6R12, Advance Income Tax Rulings and Technical Interpretations, the Income Tax Rulings Directorate ("Directorate") of the Canada Revenue Agency ("CRA") is responsible for interpreting the Act, the Income Tax Regulations and related statutes.
A technical interpretation provides general comments on provisions contained in the Act and other related legislation, where applicable. It is not intended to confirm the tax treatment of any particular situation involving any particular taxpayer, but rather to assist the taxpayer in determining the tax treatment.
Our Directorate confirms the tax treatment of particular transactions of a particular taxpayer only in the context of a request for an advance income tax ruling as described in Information Circular IC70-6R9.
After further review of your question, we confirm, as we indicated to you during the telephone conversation of December 12, 2019, that the situation you described in your correspondence and in our telephone conversations does not involve or otherwise allow us to identify a particular interpretation concern with respect to a specific provision of the Act. Your question is in the nature of a request for general tax planning or tax advice.
Since the Directorate's mandate is to interpret the Act and not to provide tax advice, we are therefore not in a position to answer your question. Furthermore, please note that your question goes beyond the CRA's mandate and cannot be answered by any other CRA directorate.
Since Canada's tax system is based on the principle of self-assessment, the CRA expects taxpayers to correctly report their transactions and meet their tax obligations. It is impossible to examine the tax treatment resulting from facts, transactions or events specific to a given taxpayer's situation before the taxpayer files a tax return. In this context, the CRA appreciates and recognizes the important role played by tax professionals in the smooth operation of the system and the assistance they provide to taxpayers when inter alia unusual situations arise that give rise to unforeseen tax consequences.
Best regards,
Isabelle Landry
Manager
Business and Employment Income Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch