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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
January 28, 1994
Specialized Audit Programs Section Resource Industries
Mara D. Praulins Section
A\ChiefAttention: Jack Hoye
7-940185
Sixty Day Rule - Subsection 66(12.66)
This is in reply to your enquiry concerning the application of subsection 66(12.66) to Canadian exploration expenses incurred following the 24th month after the month the flow-through share agreement was entered into as described in the definition of "flow-through share" at paragraph 66(15)(d.1) of the Income Tax Act (the "Act").
We understand that your specific concern is with the eligibility for renunciation of an expense that is incurred within 60 days after the end of the 24th month from the month of the agreement.
In our view, the requirement found in the definition of "flow-through share" at paragraph 66(15)(d.1) of the Act is that the Canadian exploration expense must be incurred during the period commencing with the day the flow-through share agreement is entered into and ending at the end of the 24th month following the month of the agreement. Consequently, if the expense is incurred after the 24 month period the share would not be a "flow-through share" according to the definition at paragraph 66(15)(d.1) of the Act. Thus, we do not agree with the interpretation of subsection 66(12.66) whereby an expense incurred within 60 days after the end of the 24th month would be eligible for renunciation.
If you have any questions or would like to discuss these issues in more detail, please contact Bruce Rankin at 957-8974.
for Director
Manufacturing Industries,
Partnerships and Trusts Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
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