2000 Income Tax Severed Letter 2000-0059261 - Internal reorganization

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.

Principal Issues: Whether a proposed amendment affects the rulings given?

Position: No.

Reasons: See issue sheet.

XXXXXXXXXX 						2000-005926

Attention: XXXXXXXXXX

XXXXXXXXXX, 2000

Dear Sirs:

Re: XXXXXXXXXX

This is in reply to your letter of XXXXXXXXXX, wherein you requested an amendment to the advance income tax ruling issued on XXXXXXXXXX, 1999 (our reference 990852) as amended by the letter issued on XXXXXXXXXX, 1999 (our reference 993081) and the letter issued on XXXXXXXXXX, 2000, (our reference 2000-004309) (collectively the "Revised Ruling").

All capitalized terms have the meaning assigned in the Revised Ruling.

The following transaction will be added to the Revised Ruling:

26A. Distributing will purchase for cancellation all of the XXXXXXXXXX and $XXXXXXXXXX of the XXXXXXXXXX Preferred Shares (the "XXXXXXXXXX and XXXXXXXXXX Shares") owned by Parent and in return Distributing will issue to Parent Common shares of Distributing. The aggregate paid-up capital of the Common Shares so issued by Distributing will be equal in amount to the paid-up capital of the XXXXXXXXXX and XXXXXXXXXX Shares which are cancelled.

Paragraph (e) of the ADDITIONAL PROPOSED TRANSACTION described in the Revised Ruling will be replaced by the following:

The Board of Directors of Distributing will pass a resolution to create a new series of Preferred Shares, XXXXXXXXXX (the "XXXXXXXXXX Shares"). The XXXXXXXXXX Shares will be XXXXXXXXXX shares, with an initial dividend rate of approximately XXXXXXXXXX% per annum. The XXXXXXXXXX Shares will be redeemable at the option of Distributing at $XXXXXXXXXX per share on XXXXXXXXXX and from time to time thereafter.

XXXXXXXXXX

Purpose of the proposed transactions

XXXXXXXXXX

Rulings

Provided that the above statements together with the statements of facts, purposes of the proposed transactions and the proposed transactions contained in the Revised Ruling constitute a complete and accurate disclosure of all the relevant facts, proposed transactions and the purpose of the proposed transactions, we confirm as follows:

a) The proposed transactions described in this letter will not result in a change in the ruling (h) in the Revised Ruling.

b) No benefit will be conferred on either Distributing or Parent for the purposes of subsections 15(1), 86(2) or 51(2) as a result of the proposed transaction described in paragraph 26A above, in and of itself.

The above rulings and the rulings given in the Revised Ruling are subject to the limitations and qualifications set forth in Information Circular 70-6R3 issued on December 30, 1996, and are binding provided that the proposed transactions are completed before XXXXXXXXXX.

Yours truly,

for Director
Reorganizations and International Division
Income Tax Rulings Directorate
Policy and Legislation Branch