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:
1. Does the failure to make an offer when there is an Assets Sale over $ XXXXXXXXXX constitutes an acceptable event of default?
2. Whether subsection 15(2.3) will apply to the loans from Finco to the partnership?
3. Whether the guarantee provided by ABC Fund will result in ABC Fund failing to meet the condition in subparagraph 132(6)(b)(i)?
Position:
1. The failure to make an offer is an acceptable event of default.
2. Subsection 15(2.3) will apply to the loans from Finco to the partnership.
3. The guarantee in the present situation will not, in and by itself disqualify the Fund as a mutual fund trust as defined in 132(6)(b).
Reasons:
1. The default has commercial reality, is beyond the control of the lenders and is not contrived.
2. The loans will be made in the ordinary course of Finco ordinary business which is the lending of money.
3. In this case, the level of integration of the trust investing activities is sufficiently high for considering that the consenting of guarantees is not an undertaking by itself. Also, ABC Fund is not in the business of providing guarantees.
XXXXXXXXXX 2006-019188
XXXXXXXXXX, 2006
Dear Sirs:
Re: Advance Income Tax Ruling Request
XXXXXXXXXX
This is in response to your letters of XXXXXXXXXX, requesting advance income tax rulings on behalf of the above-named taxpayer. We also acknowledge information provided in electronic correspondences, as well as a draft version of the Credit Agreement.
We understand that, to the best of your knowledge and that of the taxpayer, none of the issues involved in the ruling request is:
(i) in an earlier return of the taxpayer or a related person,
(ii) being considered by a tax services office or taxation centre in connection with a previously filed tax return of the taxpayer or a related person,
(iii) under objection by the taxpayer or a related person,
(iv) before the courts, or if a judgment has been issued, the time limit for appeal to a higher court has expired, and
(v) the subject of a ruling previously issued to the taxpayer or a related person by this Directorate.
Unless otherwise stated, all references to a statute are to the Income Tax Act (Canada), R.S.C. 1985, c.1 (5th Supp.), as amended to the date of this letter (the "Act"), and all terms and conditions used herein that are defined in the Act have the meaning given in such definition unless otherwise indicated.
Our understanding of the facts, proposed transactions and the purpose of the proposed transactions is as follows:
DEFINITIONS
"ABC Fund" means XXXXXXXXXX an unincorporated open-ended limited purpose trust established under the laws of the Province of XXXXXXXXXX;
"ABC GP" means XXXXXXXXXX, a general partnership established under the laws of XXXXXXXXXX;
"ABC Guarantee" means the agreement to be entered into by the Guarantors with the Term Lenders, and the Revolving Lenders respectively, pursuant to which a guarantee of the obligations of Finco and ABC XXXXXXXXXX under the Term Facility and/or the Canadian Revolving Facility and the U.S. Revolving Facility, respectively will be provided by each of the Guarantors in favour of the Term Lenders and Revolving Lenders;
"ABC Holding" means XXXXXXXXXX a corporation constituted under the CBCA;
"ABC XXXXXXXXXX" means XXXXXXXXXX a corporation constituted under the CBCA;
"ABC XXXXXXXXXX Group" means ABC Fund, ABC Trust, ABC GP and all direct and indirect subsidiaries collectively;
"ABC XXXXXXXXXX" means XXXXXXXXXX, a US resident corporation to be formed as an indirect wholly-owned subsidiary of ABC GP;
"ABC XXXXXXXXXX Tranche" means the portion of the Term Facility of up to US$XXXXXXXXXX to be provided by the Term Lenders pursuant to the Credit Agreement;
"ABC Trust" means XXXXXXXXXX an unincorporated open-ended trust established under the laws of the province of XXXXXXXXXX;
"ABC US" means XXXXXXXXXX, a corporation constituted under the laws of XXXXXXXXXX;
"Asset Sales" means the sale, disposition, alienation or transfer of assets (including equity interests in subsidiaries and debt owed by subsidiaries and affiliates) outside of the ordinary course of business in excess of CA$XXXXXXXXXX per year;
"Asset Sales Offer" means, the negative covenant described in section XXXXXXXXXX of the Credit Agreement under which all net proceeds of Asset Sales in excess of certain limits shall be offered (via a "Disposition Repayment Offer" as described in same section of the Credit Agreement) to the Term Lenders in permanent reduction of the Term Facility;
"Borrowers" means Finco and ABC XXXXXXXXXX;
"Canadian Revolving Facility" means a senior secured revolving credit facility of up to approximately CA$XXXXXXXXXX to be provided to Finco by the Canadian Revolving Lenders pursuant to section XXXXXXXXXX of the Credit Agreement;
"Canadian Revolving Loans" means any amount borrowed by Finco under the Canadian Revolving Facility;
"Canadian Revolving Lenders" means a syndicate of Canadian domiciled banks and institutional investors, including XXXXXXXXXX;
"CBCA" means Canada Business Corporations Act R.S. C.1985, c. C-44, as amended;
"Change of Control" means any event which results in equity interests representing more than 50% of the voting or economic interests in ABC Fund being held, directly or indirectly, by any person or associated group of persons;
"Closing Date" means the date at which the funds under the Term Facility shall be made available;
"CRA" means the Canada Revenue Agency;
"Credit Agreement" means the agreement to be entered into between Finco and ABC XXXXXXXXXX, the Term Lenders and the Revolving Lenders, outlining the terms and conditions of the Term Facility and the Canadian Revolving Facility and the U.S. Revolving Facility;
"EBITDA" means the earnings before interest, taxes, depreciation and amortization;
"Event of Default" has the meaning of paragraph 28c)(viii).
"Existing Term Facility" means ABC GP's current term loan facilities;
"Finco" means a wholly-owned subsidiary of ABC Holding constituted on XXXXXXXXXX under the CBCA;
"Finco Guarantee" means the agreement to be entered into by Finco, ABC Holding, ABC Trust, ABC Fund, and all of its direct and indirect subsidiaries pursuant to which a guarantee of the obligations of ABC GP under the Finco Term Facility will be provided by each of ABC Holding, ABC Trust, ABC Fund and all of its direct and indirect subsidiaries, in favor of Finco;
"Finco Revolving Facility" means a revolving facility of up to approximately CA$ XXXXXXXXXX to be provided to ABC GP by Finco;
"Finco Revolving Loans" means any amount borrowed by ABC GP under the Finco Revolving Facility;
"Finco Term Facility" means a term facility of up to approximately US$XXXXXXXXXX (equivalent of approximately CA$XXXXXXXXXX) to be provided by Finco to ABC GP;
"Finco Term Loan" means the amount borrowed by ABC GP under the Finco Term Facility;
"Finco Tranche" means the portion of the Term Facility of up to an equivalent of approximately CA$XXXXXXXXXX (CA$XXXXXXXXXX less US$XXXXXXXXXX) to be provided to Finco by the Term Lenders pursuant to section XXXXXXXXXX of the Credit Agreement;
"Guarantors" means by ABC Holding, ABC Trust, ABC Fund, ABC GP and all of its direct and indirect subsidiaries;
"Leverage Ratio" means as of any date of determination the ratio of (i) the debt of ABC GP and Finco on an adjusted consolidated basis to (ii) EBIDA on an adjusted consolidated basis for the relevant period ending on such a date;
XXXXXXXXXX;
"Obligors" means the Borrowers and the Guarantors;
"Revolving Lenders" means the Canadian Revolving Lenders and the U.S. revolving lenders pursuant to the Credit Agreement;
"Target" means XXXXXXXXXX US resident entities currently owning the Targeted Assets;
"Targeted Assets" means XXXXXXXXXX in the US;
"Taxable Canadian corporation" has the meaning assigned by subsection 89(1);
XXXXXXXXXX;
"Term Facility" means a senior secured Term Loan Facility, including both the ABC XXXXXXXXXX Tranche and the Finco Tranche, provided by the Term Lenders pursuant to the Credit Agreement, for an aggregate maximum amount of an equivalent of CA$XXXXXXXXXX;
"Term Lenders" means a syndicate of US institutional investors arranged by XXXXXXXXXX;
"Term Loan" means the amount borrowed by Finco under the Finco Tranche of the Term Facility;
"U.S." means United States of America;
"U.S. Revolving Facility" means a senior secured revolving credit facility of up to CA$XXXXXXXXXX to be provided to ABC XXXXXXXXXX by the U.S. revolving lenders pursuant to the Credit Agreement;
"U.S. Revolving Loan" means any amount borrowed by ABC XXXXXXXXXX under the U.S. Revolving Facility.
FACTS
1. ABC Fund is an unincorporated open-ended limited purpose trust established under the laws of the Province of XXXXXXXXXX pursuant to a trust agreement made as of XXXXXXXXXX as amended and restated on XXXXXXXXXX and XXXXXXXXXX.
2. ABC Fund was created for the purpose of acquiring, investing in, holding, transferring, disposing of and otherwise dealing with debt or equity securities of ABC Trust and other corporations or trusts whose operations consist in owning and operating market XXXXXXXXXX and ancillary assets.
3. An unlimited number of fund units can be issued pursuant to ABC Fund's trust agreement. Each fund unit is transferable and represents an equal undivided beneficial interest in any distributions from ABC Fund. All fund units are of the same class with equal rights and privileges. ABC Fund qualifies as a "unit trust" pursuant to subsection 108(2) and as a "mutual fund trust" pursuant to subsection 132(6). ABC Fund is not in the business of providing guarantees.
4. ABC Trust is an unincorporated open-ended trust established under the laws of the Province of XXXXXXXXXX pursuant to a trust agreement made as of XXXXXXXXXX, as amended and restated on XXXXXXXXXX and XXXXXXXXXX.
5. ABC Trust was created for the purpose of acquiring, investing in, holding, transferring, disposing of and otherwise dealing with debt or equity securities of ABC Holding and ABC GP. All of the units of ABC Trust and the secured notes issued by ABC Trust are owned by ABC Fund.
6. ABC GP is a general partnership formed under the laws of the Province of XXXXXXXXXX pursuant to a partnership agreement made as of XXXXXXXXXX, as amended and restated on XXXXXXXXXX and XXXXXXXXXX.
7. XXXXXXXXXX.
8. ABC GP is entitled to issue various classes of partnership interests. As of the date hereof, outstanding partnership units consist of Class A and Class B Exchangeable Units. Each partnership unit entitles the holder thereof to one vote. As of XXXXXXXXXX, ABC Trust held XXXXXXXXXX Class A Units and XXXXXXXXXX Class B Exchangeable Units of ABC GP (representing more than XXXXXXXXXX% of all ABC GP units). As of XXXXXXXXXX, ABC Holding held XXXXXXXXXX Class A Units of ABC GP.
9. ABC XXXXXXXXXX is a corporation constituted under the CBCA on XXXXXXXXXX. All of ABC XXXXXXXXXX outstanding shares are held by ABC GP.
10. ABC Holding is a corporation constituted under the CBCA on XXXXXXXXXX. All of ABC Holding's outstanding shares are held by ABC Trust. Pursuant to administration agreements, ABC Holding provides certain administrative and support services to ABC Fund and ABC Trust.
11. ABC Holding also acts as managing partner of ABC GP and, as such, ABC Holding is authorized to carry on the business of ABC GP with full power and authority to exclusively administer, manage, control and operate the same.
12. The registered office and head office of ABC Fund, ABC Trust, ABC GP, ABC XXXXXXXXXX and ABC Holding is located at XXXXXXXXXX.
13. ABC US is a corporation constituted under the laws of XXXXXXXXXX on XXXXXXXXXX. All of ABC US's outstanding shares are held by ABC XXXXXXXXXX. The registered office of ABC US is located at XXXXXXXXXX.
14. As of XXXXXXXXXX, ABC GP owed CA$XXXXXXXXXX under the Existing Term Facility, consisting of a XXXXXXXXXX-year, CA$XXXXXXXXXX term loan and an XXXXXXXXXX -year CA$XXXXXXXXXX term loan.
15. The Existing Term Facility bears interest based on the Canadian banker's acceptance rate, plus a margin, which averaged approximately XXXXXXXXXX % in XXXXXXXXXX . Under the terms of the Existing Term Facility, ABC GP must comply with certain restrictive covenants, including the requirement to maintain certain financial ratios.
16. The Existing Term Facility was put in place in XXXXXXXXXX, at a time when ABC GP was generating substantially higher EBITDA than it is today. Last XXXXXXXXXX months EBITDA as at XXXXXXXXXX was CA$XXXXXXXXXX compared to CA$XXXXXXXXXX for the last XXXXXXXXXX months ended XXXXXXXXXX. As such, leverage at the time the Existing Term Facility was put in place was significantly lower than it is today. Based on those facts, should ABC GP need to refinance its existing debt today, such refinancing would be done on less attractive terms and conditions.
17. In XXXXXXXXXX, ABC GP was approached with the opportunity to acquire the Targeted Assets, and a letter of intent was signed on XXXXXXXXXX.
18. ABC Holding incorporated a new corporation ("Finco") under the CBCA. Finco will be a taxable Canadian corporation and will operate as a private financing corporation with its head office and principal place of business located at XXXXXXXXXX. The directors and officers of Finco will be substantially the same people who are the directors and officers of ABC Holding. On incorporation, ABC Holding has subscribed for common shares of Finco and is Finco's sole shareholder.
19. ABC XXXXXXXXXX is incorporating a new US corporation ("ABC XXXXXXXXXX") under the laws of the State of XXXXXXXXXX to purchase the Targeted Assets.
PROPOSED TRANSACTIONS
20. ABC Fund will issue units for approximately US $XXXXXXXXXX and convertible securities for approximately US $XXXXXXXXXX on the market. ABC Fund will use approximately US $XXXXXXXXXX of the net proceeds to equity finance ABC XXXXXXXXXX and approximately US $ XXXXXXXXXX of the net proceeds to equity finance ABC GP to repay part of its Existing Term Facility.
21. Finco and ABC XXXXXXXXXX, together with the Term Lenders and Revolving Lenders, will enter into a Credit Agreement under which the Term Lenders will provide the Term Facility and the Revolving Lenders will provide the Canadian Revolving Facility and the U.S. Revolving Facility.
22. The Guarantors will enter into the ABC Guarantee agreement with the Term Lenders and the Revolving Lenders respectively, pursuant to which a guarantee of the obligations of Finco and ABC XXXXXXXXXX under the Term Facility and/or the Canadian Revolving Facility and U.S. Revolving Facility, respectively will be provided by each of the Guarantors, in favor of the Term Lenders and Revolving Lenders. ABC Fund will not receive any fees for providing the ABC Guarantee.
23. Finco and ABC GP will enter into a similar credit agreement under which Finco will provide the Finco Term Facility and the Finco Revolving Facility.
24. Finco, ABC Holding, ABC Trust, ABC Fund, and all of its direct and indirect subsidiaries will enter into the Finco Guarantee agreement pursuant to which a guarantee of the obligations of ABC GP under the Finco Term Facility will be provided by each of ABC Holding, ABC Trust, ABC Fund and all of its direct and indirect subsidiaries, in favor of Finco. ABC Fund will not receive any fees for providing the Finco Guarantee.
25. The principal amount under the Term Facility is up to approximately US$XXXXXXXXXX (equivalent of CA$XXXXXXXXXX). The amount of the drawdown will not exceed the sum of the acquisition price paid by ABC XXXXXXXXXX for the Targeted Assets, the amount required for the refinancing of the Existing Term Facility and the payment of all associated fees and expenses.
26. Finco and ABC XXXXXXXXXX will be obliged under the Term Facility to pay to the Term Lenders various fees.
27. At this time, it is expected that a maximum of approximately US$XXXXXXXXXX (CA$XXXXXXXXXX) will be made available to Finco as a borrowing under the Term Facility and the remaining US$XXXXXXXXXX (CA$XXXXXXXXXX) would be made available to ABC XXXXXXXXXX as a borrowing under the Term Facility. The full amount of the Term Facility will be drawn in a single drawing on the Closing Date.
28. The principal terms of the Term Facility will be as follows:
a) The interest rate of the Term Facility will be, at the Borrowers' request, based on either U.S. base rate plus XXXXXXXXXX basis points or LIBOR rate plus XXXXXXXXXX basis points.
b) Principal repayments will be due quarterly and will amortize at a rate of XXXXXXXXXX% per year of the original amount of the Term Loan, commencing XXXXXXXXXX . The balance will be due and payable at the maturity date which is XXXXXXXXXX years from the Closing Date;
c) Mandatory repayment of the Term Facility will be required in the following circumstances:
(i) XXXXXXXXXX % of all debt issuances in excess of permitted debt;
(ii) XXXXXXXXXX % of all equity issuances of ABC Fund when Leverage Ratio exceeds XXXXXXXXXX, and
(iii) Commencing with the fiscal year ended before XXXXXXXXXX, from excess cash flow (ECF) as per the table below;
Leverage Ratio Cash Sweep
XXXXXXXX XXXXXXXX
(iv) During the XXXXXXXXXX -year period commencing on the Closing Date, principal repayments as described in b) above applied to the outstanding loans under the Finco Tranche of the Term Facility or repaid as a result of the application of any of the mandatory repayment provisions other than as a result of an acceleration following an Event of Default cannot exceed XXXXXXXXXX% of approximately XXXXXXXXXX% of the aggregate principal amount of the Term Facility on the Closing Date. More specifically, section XXXXXXXXXX of the Credit Agreement provides that notwithstanding any provision of the Credit Agreement or of any other agreement to the contrary, there is no obligation to make any mandatory repayment if, as a result of such mandatory repayment, the Term Lenders would receive from Finco, within XXXXXXXXXX from the date of the initial advance of the Finco Tranche to Finco under the Term Facility, an amount that, when added to all of the scheduled repayments contemplated by (b) above and to all other mandatory repayments made by Finco under the Term Facility prior to that date, would be equal to or would exceed XXXXXXXXXX% of the Finco Tranche.
(v) The Term Facility may be permanently prepaid at any time in whole or in part at the option of Finco and/or ABC XXXXXXXXXX without premium or penalty (subject to certain restrictions and call protection, if any), subject to customary breakage costs for LIBOR contracts, and provided that bankers' acceptances may not be prepaid, but may be cash collateralized. The minimum amount of such prepayment shall be CA$XXXXXXXXXX and multiples thereof; such prepayments shall be applied at the discretion of Finco and/or ABC XXXXXXXXXX.
(vi) Each Borrower and Obligor agrees to respect certain covenants as described in section XXXXXXXXXX of the Credit Agreement including:
a) The maintenance of proper insurance coverage and if any proceeds of such insurance become payable prior to an Event of Default such proceeds shall be used in accordance with the same section;
b) In respect of the Term Facility, the proceeds must be used as follows:
i) If the funds are proceeds of the Term Facility collateral and such proceed is in excess of a minimum amount but not exceeding a maximum amount, the Obligor entitled to receive such proceeds shall be entitled to retain it and shall not be required to make an Asset Sales Offer if (i) the relevant Obligor provides to the Term Lenders a notice of its good faith intention to use (or cause one or more of the other Obligors to use) such proceeds for the repair or replacement of the damaged or lost property in a manner consistent with the core business, and (ii) such proceeds are used for such purpose within one year following their receipt; or if such funds have not been reinvested within such one-year period, the relevant Obligor shall deliver an Asset Sales Offer as if such proceeds arose from an Asset Sale per incident.
ii) If the funds are proceeds of Term Facility collateral in excess of the maximum amount applicable for the purposes of paragraph 28c)(vi)(b)(i) hereof, the relevant Obligor shall deliver an Asset Sales Offer as if such proceeds arose from an Asset Sales, unless the majority lenders (50.1%) consent to permit the relevant Obligor to reinvest it substantially in accordance (i) above.
c) The Borrowers maintain certain financial ratios.
d) The Borrowers shall pay to the Lenders any amounts required to be paid in accordance with paragraph 28c) above, and any amounts required to be paid following an accepted Asset Sales Offer.
e) In respect of the use of any excess cash flow, the Credit Agreement provides that if any excess cash flow is generated that, but for the limitation set forth in paragraph 28c)(iv) above, would have required a Borrower to make a mandatory repayment, the relevant Borrower shall deposit the portion of such excess cash flow that would have been used to prepay the loan under the Term Facility in an account with the US agent of the Term Lenders, in the relevant Borrower's name, or, at its option, shall purchase cash equivalents, which in either case will be considered to be Term Facility collateral. The relevant Borrower shall be entitled to use the amounts in question for its permitted capital expenditures, investments or other long-term purposes.
(vii) Negative covenants pursuant to which each Borrower and Obligor agrees that it shall not do certain things including:
a) Proceed to a reorganization other than as permitted by section XXXXXXXXXX of the Credit Agreement;
b) Sale of assets, otherwise than as permitted by section XXXXXXXXXX of the Credit Agreement. That section further provides that upon the occurrence of an Asset Sales (in excess of certain annual limits) by Finco, ABC XXXXXXXXXX, ABC GP or any of its subsidiaries, subject to certain reinvestment options, Finco and/or ABC XXXXXXXXXX would be required to make an Asset Sales Offer to repay the Term Loan. Failure to make an Asset Sales Offer, as required, would constitute an Event of Default;
(viii) The Credit Agreement provides for Events of Default that are described in section XXXXXXXXXX and includes:
a) Failure to pay the amount due under an Asset Sales Offer;
b) The failure to comply with certain financial tests set out in section XXXXXXXXXX of the Credit Agreement (paragraph 28c)(vi)c) above);
c) If any Obligor is in default with respect to any Debt (other than amounts due to the Lenders hereunder) in excess of an amount of $XXXXXXXXXX or its equivalent in US Dollars;
d) If an Obligor fails to make an Asset Sales Offer when required;
e) If a Change of Control occurs.
(vii) Pursuant to the terms and conditions of the Term Facility, no part of the interest payable on the Term Facility will be contingent or dependent upon the use of or production from property in Canada or will be computed by reference to revenue, profit, cash flow, commodity price or any other similar criterion or by reference to dividends paid or payable to shareholders of any class of shares of the capital stock of a corporation.
(viii) The Term Facility, the Canadian Revolving Facility and the US Revolving Facility will be guaranteed under the ABC Guarantee.
29. The Finco Term Facility will be guaranteed under the Finco Guarantee.
30. Finco will then enter into the Finco Term Loan with ABC GP, under which, Finco will on-lend the proceeds of the Term Loan to ABC GP under the Finco Term Facility.
31. Any amount borrowed under the Canadian Revolving Facility by Finco would be on-lent to ABC GP pursuant to the Finco Revolving Facility.
32. ABC GP will be obliged to pay to Finco the fees charged by the Term Lenders to Finco.
33. The terms of the Finco Term Facility and the Finco Revolving Facility will be substantially identical to those of the Term Facility, the Canadian Revolving Facility and the US Revolving Facility, except that the Finco Term Loan and any Finco Revolving Loan will bear interest at a rate higher than the rate under the Term Facility, the Canadian Revolving Facility and the U.S. Revolving Facility such that Finco will earn a profit from the Finco Term Loan and Finco Revolving Loans.
PURPOSE OF THE PROPOSED TRANSACTIONS
By borrowing through Finco, a direct wholly-owned subsidiary of ABC Holding and a stand-alone financing vehicle for the ABC XXXXXXXXXX Group, the financing activities of Finco can be segregated from ABC Holding's role and functions as managing partner of ABC GP.
In summary, the purpose of the proposed financing structure under the Term Facility and the Finco Term Facility is to enable the ABC XXXXXXXXXX Group to obtain long term financing at the lowest cost of capital.
RULINGS GIVEN
Provided that the preceding statements constitute a complete and accurate disclosure of all of the relevant facts, proposed transactions and the purpose of the proposed transactions, and provided that the proposed transactions are completed in the manner described above, our rulings are as follows:
A. By virtue of the exemption contained in subparagraph 212(1)(b)(vii), no tax under Part XIII will be exigible in respect of any amounts paid or credited to Term Lenders as, on account, or in lieu of payment of, or in satisfaction of, interest on the Term Loan issued under the Term Facility, provided that at the time the amount is paid or credited the Term Lenders deal at arm's length with Finco.
B. Subsection 15(2.3) will apply with respect to loans made by Finco to ABC GP under the Finco Term Facility and Finco Revolving Facility.
C. The guarantee provided by ABC Fund pursuant to the ABC Guarantee and Finco Guarantee will not in and by itself result in ABC Fund failing to meet the mutual fund trust requirement in paragraph 132(6)(b) that the ABC Fund's only undertaking be the investing of its funds in property (other than real property or an interest in real property).
D. Subsection 245(2) will not apply to the Proposed Transactions, in and by themselves, to redetermine the tax consequences confirmed in Rulings A, B and C.
The above rulings are subject to the limitations and qualifications set out in Information Circular 70-6R5 dated May 17, 2002 and are binding on CRA provided that the Proposed Transactions are completed by XXXXXXXXXX . Facts and proposed transactions in the documents submitted with your request not described above do not form part of the facts and proposed transactions on which these rulings are based and any reference to these documents is provided solely for the convenience of the reader.
Nothing in this letter should be construed as implying that the CRA has confirmed, reviewed or has made any determination in respect of any other tax consequences relating to the facts, proposed transactions or any transaction or event taking place either prior to the implementation of the proposed transactions or subsequent to the implementation of the proposed transactions, whether described in this letter or not, other than those specifically described in the rulings given above.
Yours truly,
for Director
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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