TITLE:

Canadian Bijuralism and the Income Tax Act

AUTHOR(S): 

Brown, Catherine

EDITOR:

This research report inspired an article that was published in:

• Brown, Catherine, "Beneficial Ownership and the Income Tax Act", Canadian Tax Journal, Canadian Tax Foundation, Toronto, 2003, Vol. 51, No. 1, pp. 401-453 .

PAGE(S):

SERIE(S):

Canadian Tax Journal – Special Edition on Canadian Bijuralism and Harmonization

SUBJECT(S):

Canadian Bijuralism
Tax law

ABSTRACT:

The abstract is an exact copy taken from the Canadian Tax Journal, 2003, Vol. 51, No. 1.

This paper examines the concept of beneficial ownership in the Income Tax Act (ITA).  It was written as part of a series of studies for the Canadian bijuralism project.  It examines the meaning of beneficial ownership, in equity and as interpreted under modern tax legislation.  The study will be of interest to both civil law and common law lawyers because it concludes that the meaning of "beneficial ownership" for purposes of the ITA is no longer obvious.  The study closes with a recommendation that if harmonization of legislative provisions in the ITA with the law of Quebec is to be achieved, a first step will be clarifying the intended meaning of certain expressions as currently used in the legislation, starting with "beneficial ownership."

TABLE OF CONTENTS:

I. OVERVIEW

CONCLUSIONS OF REPORT

SUMMARY OF RESPONSES

II. RESPONSE TO QUESTIONS POSED

Question 1

1. What does each of the following concepts mean at common law: beneficial ownership, beneficial owner, beneficially owned, beneficial interest, beneficially interested, beneficial entitlement?

2. Is the meaning different in an estate law context? Trust law? Property law? Securities law? Corporate law? International tax law? The expression beneficial ownership is also used in the OECD Model Tax Convention as well as in many tax conventions. Is its meaning different in an international law context?

3. Do these expressions have the same meaning in each of the contexts/provisions of the I.T.A.?

4. How do the Canada Customs and Revenue Agency (C.C.R.A.) interpret these expressions? For each context in which the expressions are used in the I.T.A., is the C.C.R.A.’s interpretation in conformity with the common law?

Question 2:  Constructive criticism of the proposed solutions from a common law perspective