Principal Issues:
Minor amendment to ruling
Position:
OK
Reasons:
Minor change
XXXXXXXXXX
Attention: XXXXXXXXXX
Dear Sirs:
Re: Advance Income Tax Ruling
XXXXXXXXXX
We are writing in response to your facsimile correspondence of XXXXXXXXXX regarding the advance income tax ruling (our file 972734) issued to your firm on XXXXXXXXXX, 1997 on behalf of the above-referenced corporation.
As noted in your correspondence, the recently acquired business number for XXXXXXXXXX is XXXXXXXXXX.
Also, we advise that the following amendments are incorporated into the aforementioned advance income tax ruling.
Paragraph 20 of the Proposed Transactions is amended to read as follows;
On the last day of every quarter while the Newco Loan is outstanding, XXXXXXXXXX may pay a dividend to XXXXXXXXXX and, if so paid, XXXXXXXXXX will then pay a dividend to XXXXXXXXXX, and each such dividend (if paid) will be equal to the amount of the dividends payable by Newco on that day on the Preferred Shares.
Paragraph 21 of the Proposed Transactions is amended to read as follows;
Immediately after the receipt of any of the dividends described in the previous paragraph, and, in any event, on the last day of every quarter while the Newco Loan is outstanding, XXXXXXXXXX will make a surplus contribution to Newco in an amount equal to the amount of the dividends payable by Newco on that day on the Preferred Shares. Newco will use such funds to pay to XXXXXXXXXX the dividends due that day with respect to the Preferred Shares (the "Preferred Share Dividend").
The reference in Paragraph 15 of Proposed Transactions in the aforementioned ruling to "paragraph 15" is amended to read "paragraph 16".
We confirm that these amendments to the Proposed Transactions as described in the advance income tax ruling dated XXXXXXXXXX, 1997 will not affect the rulings provided therein.
Further, Ruling "B" as provided in the advance income tax ruling is amended to read as follows;
No amount will be included in the income of Newco pursuant to paragraph 12(1)(x) of the Act in respect of the contributions of capital made by XXXXXXXXXX to Newco as described in paragraph 21 of the Proposed Transactions.
This amended ruling is subject to the provisos listed in the original advance income tax ruling.
We trust that this is the information which you require.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch
