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.
Principal Issues: Are losses available within the group as proposed - using preferred shares and loans among the corporations
Position: yes acceptable
Reasons: meets the technical requirements of the Act.
XXXXXXXXXX 2004-007522
XXXXXXXXXX, 2004
Dear XXXXXXXXXX,
Re: Supplementary Advance Income Tax Ruling
XXXXXXXXXX ("Holdco"), XXXXXXXXXX
XXXXXXXXXX ("Opco") XXXXXXXXXX
Further to your letter of XXXXXXXXXX, the following amendments are made to our advance income tax ruling number 2003-005007 (the "Ruling") issued XXXXXXXXXX, 2004 on behalf of the above named corporations.
1. Paragraph 3 of the Ruling is amended by replacing the first sentence, which states, "Holdco is a taxable Canadian corporation incorporated under the XXXXXXXXXX", with, "Holdco is a taxable Canadian corporation incorporated under the Companies Act (XXXXXXXXXX)".
2. Paragraph 11 of the Ruling is amended by replacing the first sentence, which states, "Holdco will incorporate a new corporation ("Newco") under the XXXXXXXXXX", with, "Holdco, will use a "shelf" corporation that was incorporated under the XXXXXXXXXX on XXXXXXXXXX, but that has never been organized and shares have never been issued."
3. Paragraph 12 of the Ruling is deleted and replaced with, "Newco will issue XXXXXXXXXX common shares to Holdco for $XXXXXXXXXX."
4. Paragraph 21(a) is deleted and replaced with, "To the extent that Holdco has funds on hand at that time, it will use such funds to pay down the Newco Loan and will borrow on a daylight loan basis (the "New Daylight Loan") only to the extent that it does not have sufficient funds on hand at that time."
We confirm that the Ruling, as amended herein, remains binding on the Canada Revenue Agency subject to the same limitations and qualifications set out in the Ruling.
Yours truly,
XXXXXXXXXX
For Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Planning Branch
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