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: Where all of the other conditions are satisfied, can a trust qualify as a specified international finance trust where it acquires debts of organizations described in clauses (c)(i)(A) to (H) of the definition of "specified international finance trust" in subsection 5000(7) of the Regulations in the secondary market?
Position: No.
Reasons: Debts acquired in the secondary market would not satisfy the condition that they be acquired from the organizations described in clauses (c)(i)(A) to (H). XXXXXXXXXX .
XXXXXXXXXX 2001-006498
M. P. Sarazin, C.A.
April 3, 2001
Dear XXXXXXXXXX:
Re: Specified International Finance Trust
This is in reply to your letter of January 12, 2001, requesting a technical interpretation regarding the application of subparagraph (c)(i) of the definition of "specified international finance trust" in subsection 5000(7) of the Income Tax Regulations (the "Regulations").
Subparagraph (c)(i) of the definition of specified international finance trust in subsection 5000(7) of the Regulations refers to debts issued to and acquired from the various organizations described in clauses (A) to (H) of the definition. You are of the view that the phrase "issued to and acquired from" should be interpreted to include the acquisition of an otherwise qualifying debt obligation in the secondary market (i.e., the debt obligation would have been originally acquired from one of the various organizations described in clauses (c)(i)(A) to (H) of the definition of specified international finance trust in subsection 5000(7) of the Regulations either by the selling investor or another investor). You have discussed this issue with a representative of the Department of Finance.
Written confirmation of the tax consequences inherent in particular transactions are given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office. However, we are prepared to provide the following comments.
The determination of whether a particular trust satisfies the conditions in the definition of specified international finance trust in subsection 5000(7) of the Regulations would be a question of fact. However, we are of the view that a trust will not satisfy the condition described in subparagraph (c)(i) of the definition of specified international finance trust in subsection 5000(7) of the Regulations where it acquires a qualifying debt obligation described in clauses (A) to (H) in the secondary market. The Department of Finance is aware of our interpretive views on this Regulation.
We trust the above comments will be of assistance to you.
Yours truly,
Roberta Albert, CA
for Director
Financial Industries Division
Income Tax Rulings Directorate
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