Thisdifferentiationis 106 n c anadian tax journal

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Unformatted text preview: s or complementary to the business carried on by usco in the united states. Incidental to according to the technical explanation, income is incidental to a trade or business if, for example, it arises from the short-term investment of the working capital of the resident in securities issued by persons in the source country. This interpretation is consistent with the principle expressed in Ensite Limited v. Her Majesty the Queen,43 which provides that income from the investment of temporary surplus funds is active business income if the funds are risked in the business. However, the court specified that “ ‘risked’ means more than a remote risk. a business purpose for the use of the property is not enough. The threshold of the test is met when the withdrawal of the property would ‘have a decidedly destabilizing effect on the corporate operations themselves.’ ” substantial in addition to the requirement that income be derived in connection with or incidental to an active trade or bus...
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