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: Changes to ruling 2012-044308
Position: Ruling modified.
Reasons: See below
Re: XXXXXXXXXX (Business Number XXXXXXXXXX)
Supplemental Advance Income Tax Ruling Request
This is in reply to your email correspondence of XXXXXXXXXX, and is supplemental to our advance income tax ruling 2012-044308 that was issued to the above-mentioned taxpayer on XXXXXXXXXX, 2013 (the "Ruling"). All capitalized terms in this letter have the meanings assigned to them in the Ruling.
The following amendments are hereby made to the Ruling:
Ruling I is deleted and replaced with
I. By virtue of paragraph 88(2)(b) and subsection 84(2), but subject to (c) and (d) herein, on the wind-up of BCo:
(a) Newco will be deemed to have received a winding-up dividend on the BCo Shares equal to the proportion of the amount, by which the aggregate fair market value of the property of BCo distributed in respect of the Class F shares of BCo on the winding-up exceeds the amount by which the paid-up capital of the Class F shares of BCo is reduced, that the Class F shares of BCo held by Newco is of the total number of issued Class F shares of BCo;
(b) ACo will be deemed to have received a winding-up dividend on the Class B shares of BCo equal to the proportion of the amount, by which the aggregate fair market value of the property of BCo distributed in respect of the Class B shares of BCo on the winding-up exceeds the amount by which the paid-up capital of the Class B shares is reduced, that the Class B shares of BCo held by ACo is of the total number of issued Class B shares of BCo;
(c) pursuant to subparagraph 88(2)(b)(ii), the portion of the winding-up dividend that is equal to BCo's pre-1972 CSOH, as determined immediately before the payment of the winding-up dividend, shall be deemed not to be a dividend; and
(d) pursuant to subparagraph 88(2)(b)(iii), the winding-up dividend, to the extent that it exceeds the portion thereof referred to in (c) herein that is deemed not to be a dividend, will be deemed to be a separate dividend that is a taxable dividend.
Provided that the statements contained in the Ruling constitute a complete and accurate disclosure of all the relevant facts, transactions, and purposes of the Proposed Transactions, notwithstanding the amendments described herein, we hereby confirm that, subject to the conditions, limitations, qualifications and comments set out in the Ruling, the Ruling will continue to be binding on the CRA.
for Division Director
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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