CGACourse Schedule

Course Modules

Review and Practice

Exam Preparation

Resources

Module 1: Benefits to shareholders
Overview
This module deals with the tax implications for resident and non-resident shareholders of removing funds from the corporation other than in the form of salary or dividends. It covers the taxation of shareholder benefits and loans and of deemed dividends arising from a number of transactions affecting a corporation’s share capital, such as the redemption, purchase, or cancellation of shares by the corporation. The module also discusses ethical problems related to tax planning and gives a few practical tips on writing a tax opinion. At the end of this module, you should be able to evaluate the tax implications of proposed and completed transactions and design and advise on tax planning when shareholder benefits, loans, and deemed dividends are involved. You should also be able to prepare a specific purpose report using clear, communicative, and professional language, and apply a high level of professional judgment and ethical standards.

Notes Unless otherwise indicated, for purposes of this module, a corporation means a taxable corporation [subsection 89(1)] resident in Canada and a shareholder [subsection 248(1)] refers to a person resident in Canada, whether an individual or a corporation.

Review
Before starting this module, you should review the following concepts: taxation of salary and dividends: sections 5 to 8, paragraph 12(1)(j), section 82, section 121, and subsection 89(1), “general rate income pool,” “low rate income pool,” “eligible dividend” capital dividend account: subsection 83(2) and subsection 89(1), “capital dividend account” arm’s length: section 251 These were covered in Personal & Corporate Taxation [TX1] Modules 4, 5, and 8.

Test your knowledge
Begin your work in this module with a set of