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Subject:
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Ss. 270(1) & (3) ETA - Representative/Clearance Certificate
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Dear XXXXX
We are replying to your facsimile message of November 25, 1996 in which you asked for assistance in determining whether a lawyer acting for a client, i.e., vendor, within the context of a real estate transaction would be a "representative who is administering, ... controlling or otherwise dealing with any property, business, commercial activity or estate of a registrant ..." under subsection 270(1) of the Excise Tax Act.
As we discussed during our telephone conversation of December 17, 1996, it is the Department's position that the definition of "representative" in subsection 270(1) of the Act would normally not include a solicitor who is acting under the complete direction and control of his or her client. Specifically, where the solicitor's mandate is to simply follow his or her client's instructions such as preparing the documents related to the closing of the transaction, arranging for a closing date, etc., then, the solicitor would generally not be required to obtain a clearance certificate under subsection 270(3) of the Act.
However, where the solicitor's mandate exceeds the mere handling of a real estate transaction in that the solicitor has been empowered with the degree of authority necessary to be considered a person administering, winding up or otherwise dealing with the property, business, commercial activity or estate of the registrant, then the solicitor would be in a position of control and would be required to obtain a clearance certificate. This determination would be based on the facts of the particular case.
Should you require any further information concerning this matter, please call me at (613) 954-4394.
J.E. Allard
Policy Officer
Financial Institutions and Real Property Division
GST Rulings and Interpretations
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