2003 Income Tax Severed Letter 2003-0026311 - Minor Amendments to Butterfly Ruling

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: Minor changes to proposed transactions

Position: Confirmed rulings granted in ruling 2003-018371

Reasons: The law
SECTION: 55(3)(b)

XXXXXXXXXX 							2003-002631

XXXXXXXXXX, 2003

Dear XXXXXXXXXX:

Re: XXXXXXXXXX
Supplementary Advance Income Tax Ruling

This is in reply to your letter of XXXXXXXXXX and is supplemental to our advance income tax ruling number 2003-018371 dated XXXXXXXXXX, 2003 (the "Ruling"). Unless otherwise noted, all defined terms used below have the meanings ascribed to them in the Ruling.

Amendments to Proposed Transactions:

1. In Paragraph 25 of the Ruling it is stated that "The Trust will incorporate XXXXXXXXXX companies under the CBCA . . .". One of the XXXXXXXXXX capital beneficiaries of the Trust would now prefer to hold his share of the assets of Investco through a Nova Scotia Unlimited Liability Company ("NSULC") instead of a CBCA corporation. Accordingly, one of the XXXXXXXXXX companies incorporated by the Trust will be a NSULC rather than a corporation incorporated under the CBCA.

2. In the second sub-paragraph of Paragraph 27 it is stated that "the Trust will simultaneously transfer to each Holdco XXXXXXXXXX Class AX preferred shares of Investco in exchange for XXXXXXXXXX Class A preference shares of each Holdco with a PUC of $XXXXXXXXXX per share or $XXXXXXXXXX per Holdco or $XXXXXXXXXX for all XXXXXXXXXX Holdcos and an ACB of $XXXXXXXXXX per share or $XXXXXXXXXX per Holdco or $XXXXXXXXXX for all XXXXXXXXXX Holdcos". You have now been advised that a NSULC, unlike a company incorporated under the CBCA, is not authorized to issue fractional shares.

Accordingly, in the case of the NSULC, the consideration for the transfer to it of XXXXXXXXXX Class AX preferred shares of Investco will be XXXXXXXXXX Class A preference shares of the NSULC with a PUC of $XXXXXXXXXX per share or $XXXXXXXXXX in the case of the NSULC and an ACB of $XXXXXXXXXX per share or $XXXXXXXXXX in the case of the NSULC. The figure of $XXXXXXXXXX in Paragraph 27 will then be $XXXXXXXXXX.

RULING

Notwithstanding the above changes, we confirm that the rulings given in the Ruling will continue to be binding on the Canada Customs and Revenue Agency subject to the same limitations and qualifications set out therein, provided that the proposed transactions are completed on or before XXXXXXXXXX.

Yours truly,

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