CRA considers that an LOI does not represent a s. 251(5)(b) right if it is not a contract

When questioned on whether a non-binding letter of intent to acquire shares gave rise to a s. 251(5)(b) right over those shares, CRA indicated that this turned on "whether the LOI constitutes a contract, in equity or otherwise" – which was a legal question it was not prepared to pass on in the context of an external technical interpretation.

CRA appears to have interpreted the reference in s. 251(5)(b) to "a right under a contract, in equity or otherwise" as referring to a contractual right, whether equitable or otherwise, rather than considering "that the 'right' referred to in paragraph 251(5)(b) is not confined to rights arising under a contract, but extends to rights arising in 'equity or otherwise', apart from pure contract" (Rostal).

Neal Armstrong. Summary of 7 July 2015 T.I. 2014-0552711E5 under s. 251(5)(b).