2009 Ruling 2008-0294391R3 - transfer to and from a XXXXXXXXXX foundation

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: Whether there is a disposition within the meaning of subsection 248(1) of the Act, where the legal title to shares is transferred by a foundation created pursuant to the laws of XXXXXXXXXX to a corporation (which corporation had transferred legal title to such shares to the foundation at an earlier time)?

Position: No.

Reasons: The transfer of the legal title to the shares by the foundation to the corporation will not result in a disposition within the meaning of subsection 248(1) of the Act, since 1. there is no change in the beneficial ownership of the shares; and 2. pursuant to subsection 104(1) of the Act, the arrangement between the foundation and the corporation is not a trust under the Act (except for certain purposes)

XXXXXXXXXX 							2008-029439

XXXXXXXXXX , 2009

Dear Sirs:

Re: XXXXXXXXXX Advance Income Tax Ruling

This is in reply to your letter dated XXXXXXXXXX requesting an advance income tax ruling on behalf of XXXXXXXXXX (the "taxpayers").

You have advised that to the best of your knowledge, and that of the taxpayers involved, none of the issues contained involved in this advance income tax ruling is:

• in an earlier return of the taxpayers, or a related person;
• being considered or under assessment by a tax services office or taxation centre in connection with a previously filed tax return of the taxpayers or a related person;
• under objection by the taxpayers or a related person;
• before the courts, and no judgement has been issued which may be under appeal; or
• the subject of a ruling previously issued by the Directorate.

Unless otherwise stated, all references herein to a statute are to the Income Tax Act R.S.C. 1985 (5th Supplement), c.1 (the "Act"), as amended to the date of this advance income tax ruling, and all terms and conditions used herein that are defined in the Act have the meaning given in such definitions unless otherwise indicated.

The ruling given herein is based solely on the facts, proposed transaction and purpose of the proposed transaction described below. Facts and proposed transaction in the documents submitted with your request that are not described below do not form part of the facts and proposed transaction on which this ruling is based and any reference to these documents is provided solely for the convenience of the reader.

DEFINITIONS

In this Ruling letter, the following words or expressions have the following meaning:

(a) The "Act" means the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp), as amended;

(b) "Administrative Conditions" has the meaning set forth in paragraph 20.b) hereof;

(c) "Bidco" means XXXXXXXXXX .;

(d) "Bidco Shares" means common shares of the capital stock of XXXXXXXXXX

(e) "Canco 1" means XXXXXXXXXX .;

(f) "CRA" means the Canada Revenue Agency;

(g) "Depositary Receipts" has the meaning set forth in paragraph 19 hereof;

(h) "Foreign Co 1" means XXXXXXXXXX .;

(i) "Foreign Co 2" means XXXXXXXXXX .;

(j) "Foreign Co 3" means XXXXXXXXXX .;

(k) "Foreign Co 3 Offer" has the meaning set forth in paragraph 18 hereto;

(l) XXXXXXXXXX ;

(m) "Foreign Country 1" means XXXXXXXXXX ;

(n) "Foreign Country 2" means XXXXXXXXXX ;

(o) "Indemnification Agreements" has the meaning set forth in paragraph 20.c) hereof;

(p) "Individual A" means XXXXXXXXXX ;

(q) "Individual B" means XXXXXXXXXX ;

(r) "Individual C" means XXXXXXXXXX ;

(s) "Special Entity" means XXXXXXXXXX ;

(t) "Special Entity Articles" means the articles of XXXXXXXXXX ;

and

(u) "Transfer Agreement" has the meaning set forth in paragraph 20.d) hereof.

Our understanding of the facts, proposed transaction and the purpose of the proposed transaction is as follows:

FACTS

1. Foreign Co 1 is a corporation incorporated pursuant to the laws of Foreign Country 1.

2. Foreign Co 1 is a resident of Foreign Country 1 within the meaning of Article 4 of the Canada-Foreign Country 1 Income Tax Convention.

3. Foreign Co 2 is a corporation incorporated pursuant to the laws of Foreign Country 1.

4. Foreign Co 2 is a resident of Foreign Country 1 within the meaning of Article 4 of the Canada-Foreign Country 1 Income Tax Convention.

5. Foreign Co 3 is a corporation incorporated pursuant to the laws of Foreign Country 2.

6. Foreign Co 3 is a resident of Foreign Country 2 within the meaning of Article 4 of the Canada-Foreign Country 2 Income Tax Convention.

7. XXXXXXXXXX

8. XXXXXXXXXX

9. Canco 1 is a corporation incorporated pursuant to the laws of Canada and is resident in Canada for the purposes of the Act.

10. Bidco was incorporated on XXXXXXXXXX under the Canada Business Corporations Act.

11. Bidco's head office is located in XXXXXXXXXX .

12. Individual A is a XXXXXXXXXX who was independent from Foreign Co 1.

13. Following its incorporation, Bidco was a wholly-owned subsidiary of Foreign Co 1.

14. Bidco is a corporation resident in Canada for the purpose of the Act. Its shares are not listed on any stock exchange.

Bidco was formed by Foreign Co 1 to acquire the shares of Canco 1 pursuant to a public takeover bid. XXXXXXXXXX

15. Between XXXXXXXXXX , Bidco acquired approximately XXXXXXXXXX % of the outstanding common shares of Canco 1 from the shareholders of Canco 1.

16. On XXXXXXXXXX , Bidco acquired the remaining common shares of Canco 1 under the statutory compulsory acquisition (or squeeze-out) procedure under the Canada Business Corporations Act.

17. XXXXXXXXXX

18. XXXXXXXXXX , Foreign Co 1 decided to temporarily transfer to SPECIAL ENTITY, a newly-formed "XXXXXXXXXX " created under the laws of Foreign Country 2 specifically for this purpose, legal title to the Bidco Shares representing XXXXXXXXXX % of the issued and outstanding common shares of Bidco against the issuance by SPECIAL ENTITY of one Depositary Receipt for each Bidco common share so transferred (the "Depositary Receipts"). (Foreign Co 1 continued to hold the remaining XXXXXXXXXX % of the Bidco common shares.)

19. In order to implement this plan, a number of steps took place on XXXXXXXXXX , including the following:

a) SPECIAL ENTITY was created; Individual A, acted as the incorporator; Individual A, Individual B (then an executive of Foreign Co 1), and Individual C (a former executive of Foreign Co 1) were appointed as the initial members of the board of directors of SPECIAL ENTITY; Individual A was appointed as chairman;

b) SPECIAL ENTITY, through its chairman, Individual A; executed the "Administrative Conditions" to deal with the rights and obligations of SPECIAL ENTITY with respect to the Bidco Shares and the rights and obligations of Foreign Co 1 as holder of the Depositary Receipts issued by SPECIAL ENTITY (the "Administrative Conditions");

c) Foreign Co 1 and SPECIAL ENTITY entered into indemnification agreements (the "Indemnification Agreements") in favour of Individual A, Individual B and Individual C pursuant to which SPECIAL ENTITY agreed to indemnify those persons and Foreign Co 1 guaranteed SPECIAL ENTITY's obligations thereunder; Foreign Co 1, as transferor, and SPECIAL ENTITY, as transferee, entered into the Transfer Agreement whereby Foreign Co 1 agreed to transfer to SPECIAL ENTITY for administration purposes the Bidco Shares; Foreign Co 1 also agreed to transfer à fonds perdu to SPECIAL ENTITY an amount of XXXXXXXXXX to fund SPECIAL ENTITY's ongoing costs and expenses to perform its obligations under the Transfer Agreement, the Administrative Conditions, the SPECIAL ENTITY Articles and the Indemnification Agreements (the "Transfer Agreement");

d) the securities register of Bidco was changed to reflect the transfer of the Bidco Shares; and

e) new share certificates reflecting such transfer were issued by Bidco.

21. The Administrative Conditions and the Transfer Agreement provide specifically that they are governed by and must be construed in accordance with the laws of Foreign Country 2.

22. Although Foreign Co 1 did not execute the Administrative Conditions, it is nevertheless bound by the Administrative Conditions as section XXXXXXXXXX of the Transfer Agreement, which was executed by both Foreign Co 1 and SPECIAL ENTITY, provides that the Administrative Conditions form an integral part of the Transfer Agreement and will apply between Foreign Co 1 and SPECIAL ENTITY.

23. On XXXXXXXXXX , Foreign Co 1 applied to the CRA for a clearance certificate under section 116 of the Act confirming that no Canadian federal income taxes were payable as a result of the transfer of the Bidco Shares to SPECIAL ENTITY. The certificate was issued by CRA on XXXXXXXXXX The covering letter attached to the application form referred to a sale of shares and a proposed disposition of taxable Canadian property. It also stated that no gain resulted from the transfer as the proceeds of disposition of the Bidco Share were equal to their adjusted cost base and that in any event, any gain would be exempt from tax in Canada pursuant to the Canada-Foreign Country 1 Income Tax Convention. Foreign Co 1, however, never filed a Canadian tax return in which it would have reported a disposition of the Bidco Shares.

24. On XXXXXXXXXX , the board of directors of Foreign Co 1 accepted a revised offer from Foreign Co 3.

25. Foreign Co 1 and Foreign Co 3 were later merged in a two-step process. First, Foreign Co 3 was merged into Foreign Co 2; Foreign Co 2 was then merged into Foreign Co 1, which was renamed Foreign Co 2 upon completion of the merger. Foreign Co 2 is therefore the legal successor to Foreign Co 1and holds the Depositary Receipts that were originally issued by SPECIAL ENTITY to Foreign Co 1.

Pursuant to the relevant provisions of Foreign Country 1 income tax law, the merger of Foreign Co 2 into Foreign Co 1 was a merger whereby Foreign Co 1 was the surviving entity. The former shareholders of Foreign Co 1 received no consideration on the amalgamation; whereas the former shareholders of Foreign Co 2 received shares of Foreign Co 1 on the amalgamation. Thus, Foreign Co 1 continued to exist and was the surviving entity following the merger of Foreign Co 1 and Foreign Co 2.

26. Neither of the two step merger transactions described above resulted as a legal matter in the transfer or disposition by Foreign Co 1 of its beneficial ownership in the Bidco Shares.

27. For accounting purposes, Foreign Co 1 (or Foreign Co 2 as successor to Foreign Co 1) has continuously treated the Bidco Shares as property of Foreign Co 1 (or Foreign Co 2 as successor to Foreign Co 1) and the Depositary Receipts issued by SPECIAL ENTITY to Foreign Co 1 are not treated in Foreign Co 1's (or Foreign Co 2's) financial statements as securities or property distinct from the Bidco Shares.

28. Since its creation, SPECIAL ENTITY has not had any activity other than the activities contemplated in the SPECIAL ENTITY Articles and the Administrative Conditions and has not held any property other than (i) the Bidco Shares, (ii) the amounts contributed by Foreign Co 1 pursuant to the Transfer Agreement to fund its operating expenses and (iii) its rights under the Administrative Conditions and the Transfer Agreement.

29. For Foreign Country 1's tax purposes, the transfer by Foreign Co 1 to SPECIAL ENTITY in XXXXXXXXXX of legal title to the Bidco Shares was not treated as a sale, disposition or other form of taxable transaction.

SPECIAL ENTITY Articles

31. The objectives of SPECIAL ENTITY are described in section XXXXXXXXXX of the SPECIAL ENTITY Articles and include:

a) the administration of and maintenance of legal ownership of at least XXXXXXXXXX % of the Bidco Shares against the issuance of limited voting Depositary Receipts for shares;

b) through the legal ownership of the Bidco Shares, causing Foreign Co 1 to maintain direct or indirect legal ownership of all or substantially all of the shares of any Bidco subsidiaries and other group companies (including Canco 1, in order to (i) assure the integration of Canco 1 as an integral part of the Foreign Co 1 group while enabling the potential direct or indirect sale of a non-controlling minority interest in Canco 1 to a strategic partner of Foreign Co 1, (ii) to preserve the ability of Bidco to comply with all undertakings given to the Minister responsible for the Investment Canada Act and (iii) for the benefit of all shareholders of Foreign Co 1 to avoid any corporate waste of assets of Foreign Co 1 particularly where this might benefit any of Foreign Co 1's (current or future) competitors and/or any single or any group of shareholders of Foreign Co 1, to the detriment of the interests of Foreign Co 1, or any of its minority shareholders and other stakeholders;

c) stabilizing ownership of all of Bidco's direct and indirect subsidiaries, including Canco 1, for the benefit of their employees and other stakeholders;

d) facilitating the direct or indirect sale of all or part of the shares of a subsidiary of Canco 1;

e) exercising the voting rights and other rights attached to the Bidco Shares in a manner consistent with the SPECIAL ENTITY Articles and the Administrative Conditions; and

f) the collection of ordinary cash dividends paid on the Bidco Shares and the remittance of such ordinary cash dividends to Foreign Co 1, as the holder of SPECIAL ENTITY Depositary Receipts.

32. Article XXXXXXXXXX of the SPECIAL ENTITY Articles provides that SPECIAL ENTITY must at all times exercise the rights attached to the Bidco Shares in a manner consistent with the objectives of SPECIAL ENTITY.

33. Article XXXXXXXXXX of the SPECIAL ENTITY Articles provides that SPECIAL ENTITY does not aim to make a profit.

34. Article XXXXXXXXXX of the SPECIAL ENTITY Articles provides that the SPECIAL ENTITY board shall consist of XXXXXXXXXX members. (The original XXXXXXXXXX members of the board continue to be the members of the board, XXXXXXXXXX .)

35. Article XXXXXXXXXX of the SPECIAL ENTITY Articles provides that, subject to the provisions of the Administrative Conditions, the board of SPECIAL ENTITY must be unanimous in voting the Bidco Shares on matters relating to any direct or indirect sale or other disposal of the shares or assets of Bidco (which would include shares of Canco 1) or any amendment to the articles of Bidco, as well as several other fundamental changes including the amendment of the SPECIAL ENTITY Articles and Administrative Conditions, appointment of members to the SPECIAL ENTITY board, termination of the Depositary Receipts and the determination that the objectives of SPECIAL ENTITY have been fulfilled prior to its XXXXXXXXXX anniversary.

36. Article XXXXXXXXXX of the SPECIAL ENTITY Articles provides that the board of SPECIAL ENTITY is charged with the management of SPECIAL ENTITY.

37. Article XXXXXXXXXX of the SPECIAL ENTITY Articles provides that the board of SPECIAL ENTITY is entrusted with the administration and management of the property and assets of SPECIAL ENTITY.

38. Article XXXXXXXXXX of the SPECIAL ENTITY Articles provides that the board of SPECIAL ENTITY shall adopt administrative conditions ("Administrative Conditions") with respect to the Bidco Shares and is authorised to amend such Administrative Conditions without the consent of the holder of Depositary Receipts, subject to compliance with the provisions of Article XXXXXXXXXX of the SPECIAL ENTITY Articles and so long as such amendments are not inconsistent with the objectives of SPECIAL ENTITY set forth in Article XXXXXXXXXX of the SPECIAL ENTITY Articles and not materially adverse to the interests of the holder of Depositary Receipts.

39. Article XXXXXXXXXX of the SPECIAL ENTITY Articles prevents the SPECIAL ENTITY board from dissolving SPECIAL ENTITY unless the board determines, in its sole discretion that the objectives of SPECIAL ENTITY have been fulfilled or the administration of the Bidco Shares has been terminated in accordance with the provisions of the Administrative Conditions.

Administrative Conditions

40. The recitals of the Administrative Conditions refer to the terms under which SPECIAL ENTITY is willing to handle the administration of at least XXXXXXXXXX % of the Bidco shares.

41. Article XXXXXXXXXX of the Administrative Conditions provides that SPECIAL ENTITY shall issue one Depositary Receipt for each Bidco Share legal title to which has been transferred to SPECIAL ENTITY.

42. Article XXXXXXXXXX of the Administrative Conditions provides that the Depositary Receipts do not entitle the holders thereof to any rights relating to Bidco, other than the rights set out in Articles XXXXXXXXXX of the Administrative Conditions.

43. Article XXXXXXXXXX of the Administrative Conditions provides that the Depositary Receipts may not be transferred except when the administration is terminated. The term "transfer" is defined very broadly and includes any sale, monetization or transfer and the granting of an option or any security interest.

44. Articles XXXXXXXXXX of the Administrative Conditions provide that SPECIAL ENTITY must collect all dividends and distributions paid on the Bidco Shares and make such funds available to Foreign Co 1, as the holder of the Depositary Receipts. In the case of stock dividends, article XXXXXXXXXX provides that SPECIAL ENTITY must retain the dividends and issue additional Depositary Receipts. In the event of the liquidation of Bidco, article XXXXXXXXXX provides that the final distributions on the Bidco Shares must be made by SPECIAL ENTITY to Foreign Co 1 in exchange for cancellation of the Depositary Receipts.

45. Article XXXXXXXXXX of the Administrative Conditions provides that the Bidco Shares may not be transferred by SPECIAL ENTITY except when the administration is terminated.

46. Article XXXXXXXXXX of the Administrative Conditions provides that, subject to the SPECIAL ENTITY Articles, SPECIAL ENTITY will exercise all voting rights and other shareholders' rights resulting from legal ownership of the Bidco Shares, including the election and appointment of Bidco directors, under the supervision of and at the direction of the holder of Depositary Receipts (Foreign Co 1), with the exception of decisions and actions referred to as "Independent Actions".

47. The Independent Actions relate, inter alia, to the transfer of shares or all or substantially all of the assets of any subsidiary of Bidco (including Canco 1), the issuance of shares of any subsidiary of Bidco, amendments to the constituting documents of any subsidiary of Bidco and any other action where in SPECIAL ENTITY's board's opinion, at its sole discretion, SPECIAL ENTITY would, if following the direction of Foreign Co 1, breach or circumvent the intent of a provision of the SPECIAL ENTITY Articles, the Administrative Conditions or any law. In addition, Article XXXXXXXXXX of the Administrative Conditions provides that any Independent Action shall be taken by the SPECIAL ENTITY board in its sole discretion in a manner that is consistent with the objectives of SPECIAL ENTITY as laid down in the SPECIAL ENTITY objectives and without regard to any instruction, decision or the will of Foreign Co 1.

48. Article XXXXXXXXXX of the Administrative Conditions provides, inter alia, that any person put forward by the holder of Depositary Receipts (Foreign Co 1) and any person appointed or elected to serve on the board of Bidco or Canco 1 shall be required to be a full-time management board member or senior officer of Foreign Co 1, unaffiliated with any industrial group other than Foreign Co 1 (and its subsidiaries and other group companies). Initially, this requirement applied to the members of the board of Bidco and of all direct or indirect subsidiaries of Bidco including Canco1. However, pursuant to a resolution of SPECIAL ENTITY passed on XXXXXXXXXX , this requirement was eliminated for subsidiaries of Bidco except Canco 1. However, SPECIAL ENTITY has the right, as an Independent Action (i.e. in respect of which it is not required to act at the direction of Foreign Co 1), to appoint one member of the board of Bidco and of any Bidco subsidiary (including Canco 1). We understand this latter right has never been exercised by SPECIAL ENTITY.

49. Article XXXXXXXXXX of the Administrative Conditions provides that all costs and expenses in relation to the administration shall be borne by the holder of Depositary Receipts (i.e., Foreign Co 1).

50. Article XXXXXXXXXX of the Administrative Conditions governs the termination of the administration of the Bidco Shares. The administration may be unilaterally terminated by Foreign Co 1 or SPECIAL ENTITY on or after the XXXXXXXXXX anniversary of the signing of the Administrative Conditions. Generally, the administration may not be unilaterally terminated by Foreign Co 1 or SPECIAL ENTITY prior to that XXXXXXXXXX anniversary. However, under article XXXXXXXXXX the board of SPECIAL ENTITY can cause an early termination if all public offers for Foreign Co 1 securities (other than offers recommended by the Foreign Co 1 board) have been withdrawn or lapsed, no public offers (other than recommended offers) are threatened and no unapproved person holds more than XXXXXXXXXX % of the fully liquidated voting rights in Foreign Co 1 shares. For the avoidance of doubt the board of SPECIAL ENTITY is free, at its sole discretion, not to terminate the administration of the Bidco Shares where these events have occurred, including where a recommended offer has been made in circumstances where Foreign Co 1 had no independent director or the independent directors voting in favour of the recommended offer were affiliated with, controlled by, or acting for or on behalf of the person making the recommended offer.

51. Article XXXXXXXXXX of the Administrative Conditions provides that upon termination of the administration of the Bidco Shares, SPECIAL ENTITY must transfer back to Foreign Co 1 the Bidco Shares in exchange for the cancellation of the Depositary Receipts.

52. Article XXXXXXXXXX of the Administrative Conditions provides that the board of directors of SPECIAL ENTITY may unilaterally amend the Administrative Conditions without the consent of Foreign Co 1 so long as such amendments are not inconsistent with the objectives of SPECIAL ENTITY and are not materially adverse to the interests of Foreign Co 1.

Transfer Agreement

53. The recitals of the Transfer Agreement state that Foreign Co 1 wishes to protect certain interests with respect to its direct holding in Bidco and indirect holdings in Bidco's subsidiaries (which include Canco 1) in accordance with the objectives set forth in the SPECIAL ENTITY Articles and the provisions of the Administrative Conditions. The recitals also provide that Foreign Co 1 wishes to transfer legal title to the Bidco Shares to SPECIAL ENTITY and that SPECIAL ENTITY wishes to accept legal title to the Bidco Shares, against the issuance by SPECIAL ENTITY of Depositary Receipts.

54. Section XXXXXXXXXX of the Administrative Conditions provides that Foreign Co 1 transfers legal title to the Bidco Shares for administration purposes XXXXXXXXXX and SPECIAL ENTITY agrees to accept legal title to the Bidco Shares, against the issuance by SPECIAL ENTITY to Foreign Co 1 of one Depositary Receipt for each Bidco Share.

55. Section XXXXXXXXXX of the Administrative Conditions provides that the Administrative Conditions constitute an integral part of the Transfer Agreement and that the Administrative Conditions will apply between Foreign Co 1 and SPECIAL ENTITY for such period that Foreign Co 1 holds the Depositary Receipts.

56. In section XXXXXXXXXX of the Administrative Conditions, Foreign Co 1 represented to SPECIAL ENTITY that no Depositary Receipts or similar rights had previously been issued with respect to the Bidco Shares and that no third party had any other type of beneficial interest in the Bidco Shares.

57. Under section XXXXXXXXXX of the Administrative Conditions, Foreign Co 1 is required to transfer to SPECIAL ENTITY à fonds perdu an amount of XXXXXXXXXX to fund SPECIAL ENTITY's obligations under the Transfer Agreement, the Administrative Conditions, the SPECIAL ENTITY Articles and the Indemnification Agreements. This transfer of funds is non-refundable provided however that any balance that remains unused at the time of the liquidation of SPECIAL ENTITY must be returned to Foreign Co 1.

Depositary Receipts

58. The Depositary Receipts were issued in registered rather than certificated form and are not represented by physical certificates.

XXXXXXXXXX

59. XXXXXXXXXX

60. Foreign Co 2 (as successor to Foreign Co 1) transferred certain property to Bidco in exchange for one newly issued common share of Bidco.

PROPOSED TRANSACTION

Foreign Co 2 (as successor to Foreign Co 1) has requested that SPECIAL ENTITY terminate its administration of the Bidco Shares in accordance with sections XXXXXXXXXX of the Administrative Conditions and transfer the legal title to the Bidco Shares back to Foreign Co 2 (as successor to Foreign Co 1) in exchange for the cancellation of the Depositary Receipts.

PURPOSE OF PROPOSED TRANSACTION

The purpose of the proposed transaction is to unwind the structure that was set up in XXXXXXXXXX .

RULINGS

Provided that:

a) The preceding statements constitute a complete and accurate disclosure of all of the relevant facts, proposed transaction and the purpose of the proposed transaction;

b) The proposed transaction is completed in the manner described above; and

c) There are no other transactions which may be relevant to the rulings requested,

our rulings are as follows:

A. The transfer of the legal title to the Bidco Shares by SPECIAL ENTITY to Foreign Co 2 (as successor to Foreign Co 1) in accordance with the Administrative Conditions as a result of the termination of the administration of SPECIAL ENTITY and the resulting cancellation of the Depositary Receipts will not be a disposition of the Bidco Shares or of the Depositary Receipts for the purpose of the Act.

B. Section 116 does not apply to the proposed transaction.

These rulings are given subject to the limitations and qualifications set out in information Circular 70-6R5 issued by the CRA on May 17, 2002, and are binding on the CRA provided that the proposed transaction is entered into before XXXXXXXXXX .

Except as expressly stated, this advance income tax ruling does not imply acceptance, approval or confirmation of any other income tax implications of the facts or proposed transaction described herein, and in particular, does not consider the potential application of section 247 of the Act.

These rulings are based on the Act in its present form and do not take into account any proposed amendments to the Act which, if enacted, could have an effect on the rulings provided herein.

Yours truly,

XXXXXXXXXX
for Director
International & Trusts Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch