CRA provides Treaty exemption ruling based on internal going-concern valuation

CRA ruled that an internal reorganization, that would have entailed a disposition by UK companies of their shares of another UK company whose sole significant asset was a "Canco," would be exempt under the Canada-UK treaty based on the Canco shares deriving most of their value from its gas storage business, rather than hydrocarbon assets (which are not eligible for the treaty exclusion for property in which the company business is carried on).

Of interest is that the ruling was based on an internal management estimate of the going concern value of the gas storage business; and that the rulings process was used to establish that the shares were treaty-protected property (and treaty-exempt property if a s. 116(5.02) notice was given.)

Neal Armstrong.  Summary of 2012 Ruling 2011-0429961R3 under Treaties - Article 13.