2017-0693391C6 2017 STEP – Q5 - Allocation of safe income

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Any update on study?

Position: The study of this matter is not finalized at this time.

Reasons: See below.

Author: Ton-That, Marc
Section: 55(2)

STEP CRA Roundtable – June 13, 2017

QUESTION 5.  Allocation of safe income to discretionary dividend shares

At the 2016 CTF Annual Conference, the CRA indicated that it was conducting a study of how safe income on hand should be allocated for corporations that have issued shares that are entitled to discretionary dividends, and when a dividend disproportionate to the respective pro rata interest is declared on such shares. Can the CRA provide an update on this study?

CRA Response

At this time, we have not finalized the study of this matter but wish to reiterate that our previous comments on the allocation of safe income to discretionary dividend shares were not intended to suggest that the CRA has no concerns about the use of those shares.

 

2017-069339
Marc Ton-That

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