2008 Ruling 2008-0304041R3 - Supplementary 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.

Principal Issues: Amendments to ruling 2007-025168.

Position: Granted.

Reasons: No impact on issued rulings.

XXXXXXXXXX
2008-030404

XXXXXXXXXX , 2008

Dear XXXXXXXXXX :

Re: Supplementary Advance Income Tax Ruling - XXXXXXXXXX

Further to your email of XXXXXXXXXX in which you requested on behalf of the above named taxpayer the following amendments to our Advance Income Tax Ruling dated XXXXXXXXXX , 2008 on our file number 2007-025168 (the "Ruling"), the following amendments are made to the Ruling:

1. In the definition of "Children's Trusts", the punctuation and word ", Mr. B" are deleted.

2. In point (iv) of the definition of "Newco 3", the word "after" is replaced by the words "pari passu with".

3. In the definition of "Note C", the words "XXXXXXXXXX Non-Voting common shares" are replaced with the words "XXXXXXXXXX non-voting preferred shares".

4. In the definition of "Transferee A", the punctuation and word ", and" before (iii) is replaced by the punctuation ";" and the following punctuation and words are added at the end of point (iii) of that definition: "; and an unlimited number of Class B non-voting preferred shares which entitle their holder to (i) no votes; (ii) receive dividends if, as and when declared at the discretion of the Transferee A directors at a rate not to exceed XXXXXXXXXX % of their redemption amount per annum. A Transferee A Class B non-voting preferred share is redeemable and retractable for an amount equal to the fair market value of the consideration for which it was issued".

5. In paragraph 39(a) of the Ruling, the words:

"XXXXXXXXXX non-voting common shares of Transferee A. The amount to be added to the stated capital of the XXXXXXXXXX non-voting common shares"

are replaced by the words:

"XXXXXXXXXX class B non-voting preferred shares of Transferee A. The amount to be added to the stated capital of the XXXXXXXXXX class B non-voting preferred shares"

6. In paragraph 39(c) of the Ruling, both occurrences of the words "XXXXXXXXXX non-voting common shares" are replaced by the words "XXXXXXXXXX class B non-voting preferred shares".

7. In paragraph 63 of the Ruling, each of the three occurrences of the words "$XXXXXXXXXX " are replaced by "$XXXXXXXXXX ".

8. Paragraph 89 is added to the Ruling and reads as follows: "Following the implementation of the Proposed Transactions, the shares of Y Inc. held by Newco 1 will be replaced with shares that are redeemable and retractable for the amount for which they were subscribed.

We confirm that the rulings in the Ruling remain binding on the Canada Revenue Agency subject to the same limitations and qualifications set out in the Ruling.

Yours truly,

for Director
Reorganizations and Resources Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch