19 March 2003 External T.I. 2002-0118695 - Meaning of "acquired control"

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 CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issues: 1. Meaning of "acquired control" and "last acquired control" or "control...last acquired " for the purposes of paragraphs 88(1)(c) and (d). 2. Is a particular transaction or event included in a series of transactions or events that includes the winding-up of the subsidiary.

Position: 1. Each term has its own meaning. 2. Question of fact.

Reasons: The law.

XXXXXXXXXX 2001-011869
Michael Cooke
March 19, 2003

Dear XXXXXXXXXX:

Re: Meaning of "Acquired Control"

This is in response to your letter dated December 10, 2001, wherein you requested our opinion on the application of the above term which appears in clause 88(1)(c)(vi)(A) of the Income Tax Act (the "Act") and also on whether a particular transaction or event would be part of the series of transactions or events that includes the winding-up in the fact situation described in your letter.

Your request appears to relate to either a proposed transaction or a completed transaction. Confirmation of the income tax consequences of proposed transactions involving specific taxpayers will only be provided in response to a request for an advance income tax ruling. To make such a request the advance income tax ruling must be submitted in accordance with the guidelines set out in Information Circular 70-6R5 ("IC-70-6R5") dated May 17, 2003. However, if the situation relates to a completed transaction a request for the Canada Customs and Revenue Agency's views must be made to your local Tax Services Office. Notwithstanding the above we can offer the following general comment.

For the purpose of clause 88(1)(c)(vi)(A) of the Act, the reference to the term "acquired control" means the time that the parent actually acquired de jure control of the particular subsidiary corporation and not the time that the particular parent may otherwise be deemed, by paragraph 88(l)(d.2) or paragraph 88(1)(d.3), if applicable, to have "last acquired control" of the particular subsidiary.

As you know, the determination as to whether a particular transaction or event is considered to be part of the series of transactions or events that includes the wind-up of a particular corporation can only be determined on a case-by-case basis. Accordingly, we are unable to provide any general comments on that aspect of your enquiry.

Our comments are provided in accordance with the practice described in paragraph 22 of IC-70-6R5.

Yours truly,

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