Advisors Beware – New Notifiable Transactions Released

Effective November 1, 2023, the Minister of National Revenue has designated five notifiable transactions:

• Straddle loss creation transactions using a partnership;
• Avoidance of deemed disposal of trust property;
• Manipulation of bankrupt status to reduce a forgiven amount;
• Reliance on purpose tests in section 256.1 to avoid a deemed acquisition of control; and
• Back-to-back arrangements to avoid the thin capitalization rules or to reduce or avoid Part XIII tax.

The CRA has provided details of each of the designated notifiable transactions here.

Advisors need to be aware of these transactions to fulfill their own reporting obligations and to be able to advise their clients (promoters, taxpayers and perhaps other advisors) of the clients' reporting obligations. "Advisor" captures any person who provides, directly or indirectly in any manner whatever, any assistance or advice with respect to creating, developing, planning, organizing or implementing the