2021 Ruling 2020-0852331R3 - Multi-Wing Split-Up Butterfly

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 the butterfly dividend is exempt from 55(2) as a result of qualifying under 55(3)(b)?

Position: Yes.

Reasons: Proposed transactions meet the requirements of 55(3)(b).

XXXXXXXXXX
										2020-085233

XXXXXXXXXX, 2021

Dear XXXXXXXXXX,

Re: Advance Income Tax Ruling
XXXXXXXXXX

We are writing in response to your request dated XXXXXXXXXX, for an advance income tax ruling on behalf of the taxpayers described below (the “Taxpayers”). We also acknowledge the additional information provided in your various email correspondence, as well as information provided during telephone conversations (XXXXXXXXXX).

We understand that to the best of your knowledge and that of the Taxpayers, none of the proposed transactions and/or issues involved in this ruling are the same as or substantially similar to transactions and/or issues that are:

i. in a previously filed return of the Taxpayers or a related person and;

A. being considered by the Canada Revenue Agency in connection with such return;

B. under objection by the Taxpayers or a related person; or

C. the subject of a current or completed court process involving the Taxpayers or a related person; or

ii. the subject of a ruling previously considered by the Income Tax Rulings Directorate.

The tax account numbers, Tax Services Offices and the Tax Centres and addresses of the

Taxpayers involved are as follows:

XXXXXXXXXX

Unless otherwise stated:

i. all references herein to a part, section, subsection, paragraph or subparagraph is a reference to the relevant provision of the Income Tax Act, R.S.C. 1985 (5th Suppl.) c.1, as amended, (the “Act”), or the Income Tax Regulations, C.R.C., c.945 (the “Regulations”), as appropriate;

ii. all terms and conditions used in this Ruling request that are defined in the Act (or in the Regulations) have the meaning given in such definition;

iii. all references to monetary amounts are in Canadian dollars; and

iv. the singular should be read as plural and vice versa where the circumstances so require.

DEFINITIONS

Unless otherwise specified, the following terms have the meanings specified below:

“ACB” means “adjusted cost base” as that expression is defined in section 54 and subsection 248(1);

“Act1” means the XXXXXXXXXX;

“arm’s length” has the meaning assigned by subsection 251(1);

“BN” means “business number” as that term is defined in subsection 248(1);

“capital property” has the meaning assigned by section 54;

“CCPC” means “Canadian-controlled private corporation” as that expression is defined in
subsection 125(7);

“CDA” means “capital dividend account” as that expression is defined in subsection 89(1);

“Class A Preferred Shares” means the Class A non-voting, redeemable, retractable preferred shares of each TC, which will entitle the holder to discretionary non-cumulative dividends. The Class A Preferred Shares are redeemable and retractable for a per share amount equal to the net consideration received for the first issuance of such shares divided by the total number of such shares first issued, together with all dividends declared but unpaid;

“Class B Preferred Shares” means the Class B voting, redeemable, retractable preferred shares preferred shares of each TC, which will entitle the holder to discretionary non-cumulative dividends. The Class B Preferred Shares are redeemable and retractable for a per share amount equal to the net consideration received for the first issuance of such shares divided by the total number of such shares first issued, together with all dividends declared but unpaid;

“cost amount” has the meaning assigned by subsection 248(1);

“CRA” refers to the Canada Revenue Agency;

“DC” means XXXXXXXXXX. incorporated under Act1;

“DC Class A Shares” means the Class A preferred shares of DC more fully described in Paragraph 2;

“DC Class B Shares” means the Class B preferred shares of DC more fully described in Paragraph 2;

“DC Class I Shares” means the Class I preferred shares of DC more fully described in Paragraph 2;

“DC common shares” means the authorized and issued common shares of DC more fully described in Paragraph 2;

“DC Transfer” refers to the transfer of property by DC on the distribution as described in Paragraph 28;

“distribution” has the meaning assigned by subsection 55(1);

“dividend refund” has the meaning assigned by subsection 129(1);

“dividend rental arrangement” has the meaning assigned by subsection 248(1);

“eligible dividend” has the meaning assigned by subsection 89(1);

“eligible property” has the meaning assigned by subsection 85(1.1);

“ERDTOH” means “eligible refundable dividend tax on hand” as that expression is defined in subsection 129(4);

“Estate” means the estate of the late XXXXXXXXXX;

“Estate Trustee” means XXXXXXXXXX;

“Father” XXXXXXXXXX;

“FMV” means fair market value or more specifically the highest price available in an open and unrestricted market, between informed prudent parties, acting at arm’s length and under no compulsion to act, expressed in terms of money or money’s worth;

“GC1” refers to XXXXXXXXXX, an individual who is a resident of Canada and the daughter of Sibling 2;

“GC2” refers to XXXXXXXXXX, an individual who is a resident of Canada and the son of Sibling 2;

“GC3” refers to XXXXXXXXXX, an individual who is a resident of Canada and the daughter of Sibling 3;

“GC4” refers to XXXXXXXXXX, an individual who is a resident of Canada and the son of Sibling 3;

“GRIP” means “general rate income pool” as that expression is defined in subsection 89(1);

“NERDTOH” means “non-eligible refundable dividend tax on hand” as that expression is defined in subsection 129(4);

“Paragraph” refers to a numbered paragraph in this letter;

“proceeds of disposition” has the meaning assigned by section 54;

“Proposed Transactions” means the transactions described in Paragraphs 14 to 39;

“PUC” means “paid-up capital” has the meaning assigned by subsection 89(1);

“series of transactions or events” includes the transactions or events referred to in subsection 248(10);

“Sibling 1” refers to XXXXXXXXXX, an individual who is a resident of Canada and the daughter of Father, and sibling of Sibling 2 and Sibling 3;

“Sibling 2” refers to XXXXXXXXXX, an individual who is a resident of Canada and the daughter of Father, and sibling of Sibling 1 and Sibling 3;

“Sibling 3” refers to XXXXXXXXXX, an individual who is a resident of Canada and the daughter of Father, and sibling of Sibling 1 and Sibling 2;

“Siblings” means collectively, Sibling 1, Sibling 2 and Sibling 3;

“TCC” means “taxable Canadian corporation” as that expression is defined in subsection 89(1);

“TC1” refers to the new corporation incorporated by Sibling 1 as described in Paragraph 16;

“TC1 Redemption Note” has the meaning assigned in Paragraph 31;

“TC2” refers to the new corporation incorporated by Sibling 2 as described in Paragraph 17;

“TC2 Redemption Note” has the meaning assigned in Paragraph 31;

“TC3” refers to the new corporation incorporated by Sibling 3 as described in Paragraph 18;

“TC3 Redemption Note” has the meaning assigned in Paragraph 31;

“TC4” refers to the new corporation incorporated by GC1 as described in Paragraph 19;

“TC4 Redemption Note” has the meaning assigned in Paragraph 31;

“TC5” refers to the new corporation incorporated by GC2 as described in Paragraph 20;

“TC5 Redemption Note” has the meaning assigned in Paragraph 31;

“TC6” refers to the new corporation incorporated by GC3 as described in Paragraph 21;

“TC6 Redemption Note” has the meaning assigned in Paragraph 31;

“TC7” refers to the new corporation incorporated by GC4 as described in Paragraph 22;

“TC7 Redemption Note” has the meaning assigned in Paragraph 31;

“TC8” refers to the new corporation incorporated by the Testamentary Trust as described in Paragraph 23;

“TC8 Redemption Note” has the meaning assigned in Paragraph 31;

“TCs” means collectively, TC1, TC2, TC3, TC4, TC5, TC6, TC7, and TC8, and “TC” means any of TC1, TC2, TC3, TC4, TC5, TC6, TC7, and TC8 in the singular;

“TC Common Shares” means the authorized and issued common shares of each TC; and

“Testamentary Trust” means a testamentary trust created by Father’s Will and Codicil in accordance with the terms described therein, the contents of which are to be held in trust further to the terms of the testamentary trust and until GC4 attains the age of XXXXXXXXXX years. Upon GC4 turning XXXXXXXXXX years of age, the contents of the Testamentary Trust will be distributable to GC4.

FACTS

1. DC is a TCC and a CCPC. DC was incorporated by Father on XXXXXXXXXX under Act1. DC does not employ more than XXXXXXXXXX full-time employees and therefore all of DC’s income from the marketable securities is reported for income tax purposes as income from a specified investment business. DC has a taxation year ending XXXXXXXXXX.

2. DC’s authorized share capital consists of an unlimited number of:

a. Common shares which are voting and participating with their FMV equivalent to the value of DC less the aggregate FMV of the Class A, B and I Preference shares (“DC common shares”);

b. Class A Preference shares which are non-voting, redeemable, retractable preferred at $XXXXXXXXXX per share (“DC Class A Shares”);

c. Class B Preference shares which are voting, redeemable, retractable preferred shares at $XXXXXXXXXX per share(“DC Class B Shares”); and

d. Class I Preference shares which are non-voting, redeemable preferred shares at $XXXXXXXXXX per share(“DC Class I Shares”).

3. Father passed away on XXXXXXXXXX with a Will dated XXXXXXXXXX and a Codicil dated XXXXXXXXXX. Father was predeceased by his wife, who passed away on XXXXXXXXXX. As part of her will, her shares in DC were distributed to Sibling 1, Sibling 2, Sibling 3, GC1, GC2, GC3 and GC4.

4. As per Father’s Will and Codicil, the beneficiaries of the Estate are Sibling 1, Sibling 2, Sibling 3, GC1, GC2, GC3, and GC4. GC4’s beneficial interest in the Estate is to be held in the Testamentary Trust until GC4 turns XXXXXXXXXX years of age.

5. As at XXXXXXXXXX, DC’s issued and outstanding shares were held as follows:

a. Estate owned XXXXXXXXXX DC Class A Shares and XXXXXXXXXX DC Class B Shares;

b. Sibling 1 owned XXXXXXXXXX DC common shares;

c. Sibling 2 owned XXXXXXXXXX DC common shares;

d. Sibling 3 owned XXXXXXXXXX DC common shares;

e. GC1 owned XXXXXXXXXX DC common shares;

f. GC2 owned XXXXXXXXXX DC common shares;

g. GC3 owned XXXXXXXXXX DC common shares;

h. GC4 owned XXXXXXXXXX DC common shares;

i. XXXXXXXXXX DC Class I Shares were held by Sibling 2 in trust for GC1 and GC2; and

j. XXXXXXXXXX DC Class I Shares were held by Sibling 3 in trust for GC3 and GC4.

6. The shares of DC are held as capital property by each of the shareholders.

7. XXXXXXXXXX

8. XXXXXXXXXX

9. Immediately after the redemption of the DC Class I Shares as described in Paragraph 8, DC’s issued and outstanding shares were held as follows:

Shareholder Shares PUC ACB Redemption Amount
Sibling 1 XXXX DC common shares XXXX XXXX XXXX
Sibling 2 XXXX DC common shares XXXX XXXX XXXX
Sibling 3 XXXX DC common shares XXXX XXXX XXXX
GC1 XXXX DC common shares XXXX XXXX XXXX
GC2 XXXX DC common shares XXXX XXXX XXXX
GC3 XXXX DC common shares XXXX XXXX XXXX
GC4 XXXX DC common shares XXXX XXXX XXXX
Estate XXXX DC Class A Shares XXXX XXXX XXXX
Estate XXXX DC Class B Shares XXXX XXXX XXXX

10. Further to Father’s Will and Codicil, the residue of the Estate is to be divided in the following manner:

a. XXXXXXXXXX% for Sibling 1;
b. XXXXXXXXXX% for Sibling 2;
c. XXXXXXXXXX% for Sibling 3;
d. XXXXXXXXXX% for GC1;
e. XXXXXXXXXX% for GC2;
f. XXXXXXXXXX% for GC3; and
g. XXXXXXXXXX% for GC4.

11. The significant assets of DC include: cash and marketable securities, which have an aggregate ACB of $XXXXXXXXXX and an aggregate FMV, as of XXXXXXXXXX, of $XXXXXXXXXX. DC’s liabilities include: income taxes payable and loans to shareholders. The net FMV of DC is approximately $XXXXXXXXXX.

12. Included in the marketable securities are XXXXXXXXXX shares of XXXXXXXXXX with an ACB of $XXXXXXXXXX and a FMV as of XXXXXXXXXX of $XXXXXXXXXX. DC does not have significant influence over XXXXXXXXXX.

13. DC had an ERDTOH balance of $XXXXXXXXXX, a NERDTOH balance of $XXXXXXXXXX, a GRIP balance of $XXXXXXXXXX and a CDA balance of $XXXXXXXXXX as at XXXXXXXXXX. These balances are not expected to materially change before the Proposed Transactions are implemented.

PROPOSED TRANSACTIONS

The following transactions will be implemented in the order presented unless otherwise noted.

Distribution of Trust Property

14. Pursuant to the Will and Codicil, the Estate will distribute its DC Class A Shares and DC Class B Shares to each of Sibling 1, Sibling 2, Sibling 3, GC1, GC2, GC3, and the Testamentary Trust in accordance with the percentages described in Paragraph 10 above. These transfers will be in partial satisfaction of each such beneficiaries’ capital interest in the Estate pursuant to subsection 107(2).

15. Upon distribution of the shares, the issued and outstanding shares of DC will be owned as follows:

a. Sibling 1 owns XXXXXXXXXX DC Class A Shares, XXXXXXXXXX DC Class B Shares, XXXXXXXXXX DC common shares;

b. Sibling 2 owns XXXXXXXXXX DC Class A Shares, XXXXXXXXXXDC Class B Shares, XXXXXXXXXX DC common shares;

c. Sibling 3 owns XXXXXXXXXX DC Class A Shares, XXXXXXXXXX DC Class B Shares, XXXXXXXXXX DC common shares;

d. GC1 owns XXXXXXXXXX DC Class A Shares, XXXXXXXXXX DC Class B Shares, XXXXXXXXXX DC common shares;

e. GC2 owns XXXXXXXXXX DC Class A Shares, XXXXXXXXXX DC Class B Shares, XXXXXXXXXX DC common shares;

f. GC3 owns XXXXXXXXXX DC Class A Shares and XXXXXXXXXX DC Class B Shares, XXXXXXXXXX DC common shares;

g. GC4 owns XXXXXXXXXX DC common shares; and

h. Testamentary Trust owns XXXXXXXXXX DC Class A Shares and XXXXXXXXXX DC Class B Shares.

Incorporation of the Transferee Corporations

16. Sibling 1 will incorporate TC1 under Act1. TC1 will be a CCPC and a TCC. The authorized share capital of TC1 will consist of an unlimited number of:

a) Voting, participating common shares;

b) Class A non-voting, redeemable, retractable preferred shares; and

c) Class B voting, redeemable, retractable preferred shares.

On incorporation, Sibling 1 will subscribe for XXXXXXXXXX TC Common Share for cash consideration of $XXXXXXXXXX.

17. Sibling 2 will incorporate TC2 under Act1. TC2 will be a CCPC and a TCC. The authorized share capital of TC2 will consist of an unlimited number of:

a) Voting, participating common shares;

b) Class A non-voting, redeemable, retractable preferred shares; and

c) Class B voting, redeemable, retractable preferred shares.

On incorporation, Sibling 2 will subscribe for XXXXXXXXXX TC Common Share for cash consideration of $XXXXXXXXXX.

18. Sibling 3 will incorporate TC3 under Act1. TC3 will be a CCPC and a TCC. The authorized share capital of TC3 will consist of an unlimited number of:

a) Voting, participating common shares;

b) Class A non-voting, redeemable, retractable preferred shares; and

c) Class B voting, redeemable, retractable preferred shares.

On incorporation, Sibling 3 will subscribe for XXXXXXXXXX TC Common Share for cash consideration of $XXXXXXXXXX.

19. GC1 will incorporate TC4 under Act1. TC4 will be a CCPC and a TCC. The authorized share capital of TC4 will consist of an unlimited number of:

a) Voting, participating common shares;

b) Class A non-voting, redeemable, retractable preferred shares; and

c) Class B voting, redeemable, retractable preferred shares.

On incorporation, GC1 will subscribe for XXXXXXXXXX TC Common Share for cash consideration of $XXXXXXXXXX.

20. GC2 will incorporate TC5 under Act1. TC5 will be a CCPC and a TCC. The authorized share capital of TC5 will consist of an unlimited number of:

a) Voting, participating common shares;

b) Class A non-voting, redeemable, retractable preferred shares; and

c) Class B voting, redeemable, retractable preferred shares.

On incorporation, GC2 will subscribe for XXXXXXXXXX TC Common Share for cash consideration of $XXXXXXXXXX.

21. GC3 will incorporate TC6 under Act1. TC6 will be a CCPC and a TCC. The authorized share capital of TC6 will consist of an unlimited number of:

a) Voting, participating common shares;

b) Class A non-voting, redeemable, retractable preferred shares; and

c) Class B voting, redeemable, retractable preferred shares.

On incorporation, GC3 will subscribe for XXXXXXXXXX TC Common Share for cash consideration of $XXXXXXXXXX.

22. GC4 will incorporate TC7 under Act1. TC7 will be a CCPC and a TCC. The authorized share capital of TC7 will consist of an unlimited number of:

a) Voting, participating common shares;

b) Class A non-voting, redeemable, retractable preferred shares; and

c) Class B voting, redeemable, retractable preferred shares.

On incorporation, GC4 will subscribe for XXXXXXXXXX TC Common Share for cash consideration of $XXXXXXXXXX.

23. The Testamentary Trust will incorporate TC8 under Act1. TC8 will be a CCPC and a TCC. The authorized share capital of TC8 will consist of an unlimited number of:

a) Voting, participating common shares;

b) Class A non-voting, redeemable, retractable preferred shares; and

c) Class B voting, redeemable, retractable preferred shares.

On incorporation, Testamentary Trust will subscribe for XXXXXXXXXX TC Common Share for cash consideration of $XXXXXXXXXX.

24. None of the TCs will acquire any assets or incur any liabilities other than those described in the Proposed Transactions.

25. The following share transfers will be made on a contemporaneous basis:

i. Sibling 1 will transfer the XXXXXXXXXX DC Class A shares, XXXXXXXXXX DC Class B shares, and XXXXXXXXXX DC common shares to TC1 in exchange for XXXXXXXXXX common shares of TC1 having an aggregate FMV equal to the aggregate FMV of the DC shares transferred to TC1. Immediately before, at the time of, and immediately after, the transfers described in this paragraph, Sibling 1 will own all of the issued and outstanding shares of the capital stock of TC1. Following such transfers, Sibling 1 will not own any shares of the capital stock of DC.

a. Sibling 1 and TC1 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfers of the XXXXXXXXXX DC Class A shares, XXXXXXXXXX DC Class B shares, and XXXXXXXXXX DC common shares by Sibling 1 to TC1. The agreed amount in respect of each DC share so transferred will be an amount not less than the lesser of the amounts described in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV thereof.

b. The amount to be added to the corporate stated capital account maintained for the TC1 common shares of TC1 as a result of the aforesaid transfers will not exceed the maximum amount that could be added to the PUC of those shares, without being subject to adjustment under paragraph 84.1(1)(a).

ii. Sibling 2 will transfer the XXXXXXXXXX DC Class A shares, XXXXXXXXXX Class B shares, and XXXXXXXXXX DC common shares to TC2 in exchange for XXXXXXXXXX common shares of TC2 having an aggregate FMV equal to the aggregate FMV of the DC shares transferred to TC2. Immediately before, at the time of, and immediately after, the transfers described in this paragraph, Sibling 2 will own all of the issued and outstanding shares of the capital stock of TC2. Following such transfers, Sibling 2 will not own any shares of the capital stock of DC.

a. Sibling 2 and TC2 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfers of the XXXXXXXXXX DC Class A shares, XXXXXXXXXX DC Class B shares, and XXXXXXXXXX DC common shares by Sibling 2 to TC2. The agreed amount in respect of each DC share so transferred will be an amount not less than the lesser of the amounts described in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV thereof.

b. The amount to be added to the corporate stated capital account maintained for the TC2 common shares of TC2 as a result of the aforesaid transfers will not exceed the maximum amount that could be added to the PUC of the shares, without being subject to adjustment under paragraph 84.1(1)(a).

iii. Sibling 3 will transfer the XXXXXXXXXX DC Class A shares, XXXXXXXXXX DC Class B shares, and XXXXXXXXXX DC common shares to TC3 in exchange for XXXXXXXXXX common shares of TC3 having an aggregate FMV equal to the aggregate FMV of the DC shares transferred to TC3. Immediately before, at the time of, and immediately after, the transfers described in this paragraph, Sibling 3 will own all of the issued and outstanding shares of the capital stock of TC3. Following such transfers, Sibling 3 will not own any shares of the capital stock of DC.

a. Sibling 3 and TC3 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfers of the XXXXXXXXXX DC Class A shares, XXXXXXXXXX DC Class B shares, and DC XXXXXXXXXX common shares by Sibling 3 to TC3. The agreed amount in respect of each DC share so transferred will be an amount not less than the lesser of the amounts described in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV thereof.

b. The amount to be added to the corporate stated capital account maintained for the TC3 common shares of TC3 as a result of the aforesaid transfers will not exceed the maximum amount that could be added to the PUC of the shares, without being subject to adjustment under paragraph 84.1(1)(a).

iv. GC1 will transfer the XXXXXXXXXX DC Class A shares, XXXXXXXXXX DC Class B shares, and XXXXXXXXXX DC common shares to TC4 in exchange for XXXXXXXXXX common shares of TC4 having an aggregate FMV equal to the aggregate FMV of the DC shares transferred to TC4. Immediately before, at the time of, and immediately after, the transfers described in this paragraph, GC1 will own all of the issued and outstanding shares of the capital stock of TC4. Following such transfers, GC1 will not own any shares of the capital stock of DC.

a. GC1 and TC4 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfers of the XXXXXXXXXX DC Class A shares, XXXXXXXXXX DC Class B shares, and XXXXXXXXXX DC common shares by GC1 to TC4. The agreed amount in respect of each DC share so transferred will be an amount not less than the lesser of the amounts described in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV thereof.

b. The amount to be added to the corporate stated capital account maintained for the TC4 common shares of TC4 as a result of the aforesaid transfers will not exceed the maximum amount that could be added to the PUC of the shares, without being subject to adjustment under paragraph 84.1(1)(a).

v. GC2 will transfer the XXXXXXXXXX DC Class A shares, XXXXXXXXXX DC Class B shares, and XXXXXXXXXX DC common shares to TC5 in exchange for XXXXXXXXXX common shares of TC5 having an aggregate FMV equal to the aggregate FMV of the DC shares transferred to TC5. Immediately before, at the time of, and immediately after, the transfers described in this paragraph, GC2 will own all of the issued and outstanding shares of the capital stock of TC5. Following such transfers, GC2 will not own any shares of the capital stock of DC.

a. GC2 and TC5 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfers of the XXXXXXXXXX DC Class A shares, XXXXXXXXXX DC Class B shares, and XXXXXXXXXX DC common shares by GC2 to TC5. The agreed amount in respect of each DC share so transferred will be an amount not less than the lesser of the amounts described in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV thereof.

b. The amount to be added to the corporate stated capital account maintained for the TC5 common shares of TC5 as a result of the aforesaid transfers will not exceed the maximum amount that could be added to the PUC of the shares, without being subject to adjustment under paragraph 84.1(1)(a).

vi. GC3 will transfer the XXXXXXXXXX DC Class A shares, XXXXXXXXXX DC Class B shares, and XXXXXXXXXX DC common shares to TC6 in exchange for XXXXXXXXXX common shares of TC5 having an aggregate FMV equal to the aggregate FMV of the DC shares transferred to TC6. Immediately before, at the time of, and immediately after, the transfers described in this paragraph, GC3 will own all of the issued and outstanding shares of the capital stock of TC6. Following such transfers, GC3 will not own any shares of the capital stock of DC.

a. GC3 and TC6 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfers of the XXXXXXXXXX DC Class A shares, XXXXXXXXXX DC Class B shares, and XXXXXXXXXX DC common shares by GC3 to TC6. The agreed amount in respect of each DC share so transferred will be an amount not less than the lesser of the amounts described in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV thereof.

b. The amount to be added to the corporate stated capital account maintained for the TC6 common shares of TC6 as a result of the aforesaid transfers will not exceed the maximum amount that could be added to the PUC of the shares, without being subject to adjustment under paragraph 84.1(1)(a).

vii. GC4 will transfer the XXXXXXXXXX DC common shares to TC7 in exchange for XXXXXXXXXX common shares of TC7 having an aggregate FMV equal to the aggregate FMV of the DC shares transferred to TC7. Immediately before, at the time of, and immediately after, the transfers described in this paragraph, GC4 will own all of the issued and outstanding shares of the capital stock of TC7. Following such transfers, GC4 will not own any shares of the capital stock of DC.

a. GC4 and TC7 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of the XXXXXXXXXX DC common shares transferred by GC4 to TC7. The agreed amount in respect of each DC share so transferred will be an amount not less than the lesser of the amounts described in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV thereof.

b. The amount to be added to the corporate stated capital account maintained for the TC7 common shares of TC7 as a result of the aforesaid transfers will not exceed the maximum amount that could be added to the PUC of the shares, without being subject to adjustment under paragraph 84.1(1)(a).

viii. Testamentary Trust will transfer the XXXXXXXXXX DC Class A shares and XXXXXXXXXX DC Class B shares to TC8 in exchange for XXXXXXXXXX common shares of TC8 having an aggregate FMV equal to the aggregate FMV of the DC shares transferred to TC8. Immediately before, at the time of, and immediately after, the transfers described in this paragraph, Testamentary Trust will own all of the issued and outstanding shares of the capital stock of TC8. Following such transfers, Testamentary Trust will not own any shares of the capital stock of DC.

c. Testamentary Trust and TC8 will jointly elect, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfers of the XXXXXXXXXX DC Class A shares and XXXXXXXXXX DC Class B shares by Testamentary Trust to TC8. The agreed amount in respect of each DC share so transferred will be an amount not less than the lesser of the amounts described in subparagraphs 85(1)(c.1)(i) and (ii) and will not exceed the FMV thereof.

d. The amount to be added to the corporate stated capital account maintained for the TC8 common shares of TC8 as a result of the aforesaid transfers will not exceed the maximum amount that could be added to the PUC of the shares, without being subject to adjustment under paragraph 84.1(1)(a).

Types of Property

26. Immediately before the transfer of property described in Paragraph 28, the property owned by DC will be classified into the following three types of property for the purposes of the definition of “distribution” in subsection 55(1), as follows:

a. cash or near-cash property, comprising all of the current assets of DC, including cash, interest and dividend receivables;

b. investment property, comprising all of the assets of DC other than cash or near-cash property, any income from which would, for purposes of the Act, be income from property or from a specified investment business; and

c. business property, comprising all of the assets of DC, other than cash or near-cash property, any income from which would, for purposes of the Act, be income from an active business carried on by DC (other than a specified investment business).

For greater certainty, for the purposes of this distribution:

(i) any tax accounts of DC, such as any non-capital loss, net capital loss, the balance of any ERDTOH, NERDTOH or CDA, will not be considered property or a liability, as the case may be;

(ii) deferred expenses, if any, which are expenses that are deferred and amortized for accounting purposes, but fully deducted for tax purposes, and any deferred income tax or future income tax assets recorded in the financial statements of DC, if any, will not be considered property;

(iii) any amount in respect of refunds of taxes, and interest thereon, actually receivable will be treated as cash or near-cash property and any potential refunds of taxes and interest thereon will, due to their contingent nature, be ignored;

(iv) the amount of any loan or advance owing to DC that is due in less than 12 months or is due on demand, if any, is considered cash or near-cash property;

(v) the amount of any loan or advance owing by DC that is due in less than 12 months or is payable on demand, if any, is considered a current liability; and

(vi) no amount will be considered a liability unless it represents a true legal liability capable of quantification. For greater certainty, the amount of any deferred income tax liability or future income taxes owing recorded in the financial statements of DC, if any, will not be considered a liability because such amount does not represent a legal obligation of DC at the time of the Proposed Transactions.

As a result of the classification of DC’s property as described above, it is expected that DC will have only cash and near-cash property and investment property.

27. In determining the net FMV of each type of property of DC immediately before the DC Transfer, the liabilities of DC will be allocated to, and deducted in, the calculation of the net FMV of each such type of property of DC in the following manner:

a. all current liabilities, will be allocated to each cash or near-cash property in the proportion that the FMV of each such property is of the aggregate FMV of all cash or near-cash property. The total amount of current liabilities to be allocated to cash or near cash property is not expected to exceed the aggregate FMV of DC’s cash or near-cash property;

b. liabilities of DC, other than those described in Paragraph 27(a), that relate to a particular property will then be allocated to the particular property (and effectively to the type of property to which the particular property belongs) to the extent of its FMV. The liabilities that pertain to a type of property but not to a particular property will be allocated to that type of property, but not in excess of the net FMV of such type of property after the allocation of liabilities to a particular property, as described herein; and

c. if any liabilities remain after the allocations described in Paragraphs 27(a) and (b) are made, such remaining liabilities will then be allocated to the cash or near-cash property, business property and investment property of DC, on the basis of the relative net FMV of each type of property immediately prior to the allocation of such remaining liabilities, but after the allocation of the liabilities as described in Paragraphs 27(a) and (b). However, where DC is considered to have a negative amount of a type of property because of the allocations in Paragraphs 27(a) or (b), for the purposes of allocating the remaining liabilities, the net FMV of that type of property will be deemed nil resulting in none of those remaining liabilities being allocated to that type of property.

DC Transfer

28. Immediately following the determination of the net FMV of each type of property of DC, as described in Paragraphs 26 and 27, DC will contemporaneously transfer to each of TC1, TC2, TC3, TC4, TC5, TC6, TC7 and TC8, a pro-rata portion of the net FMV of each type of property owned by it at that time, such that immediately following the transfer of the properties and the assumption of DC’s liabilities as described in Paragraph 29(a), the aggregate net FMV of each type of property transferred by DC to TC1, TC2, TC3, TC4, TC5, TC6, TC7 or TC8, as the case may be, will be equal to or approximate that proportion of each type of property determined by the formula:

A x B/C, where

A is the net FMV (determined as described above), immediately before the DC Transfer, of all property of that type owned at that time by DC;

B is the FMV, immediately before the DC Transfer, of all the issued and outstanding shares of the capital stock of DC owned, at that time, by TC1, TC2, TC3, TC4, TC5, TC6, TC7 or TC8, as the case may be; and

C is the FMV, immediately before the DC Transfer, of all the issued and outstanding shares of the capital stock of DC.

For the purposes of this Paragraph, the expression “approximate that proportion” means that the discrepancy from that proportion, if any, will not exceed one percent (1%), determined as a percentage of the net FMV of each type of property TC1, TC2, TC3, TC4, TC5, TC6, TC7 and TC8 has received on such as compared to what each such TC would have received had it received its particular exact pro-rata share of the net FMV of that type of property.

29. As consideration for DC’s property transferred as described in Paragraph 28, each TC will

a. assume such liabilities of DC, as appropriate, so that each TC will receive a proportionate share of the net FMV of each type of property owned by DC; and

b. issue to DC a number of its Class A Preferred Shares having an aggregate redemption amount and aggregate FMV equal to the FMV of the property received by such TC less the amount of liabilities of DC assumed by the particular TC as described in (a).

30. DC will jointly elect with TC1, TC2, TC3, TC4, TC5, TC6, TC7 and TC8, as the case may be, in the prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of each eligible property that is transferred by DC to such TC. The agreed amount in respect of each eligible property so transferred will not be greater than the FMV of such property nor will it be less than the lesser of the FMV and the cost amount to DC of such property. For greater certainty, the agreed amount in respect of each such transferred property will be within the limits prescribed as follows:

a. in the case of capital property (other than depreciable property of a prescribed class) and inventory, an amount not less than the lesser of the amounts described in subparagraphs 85(1)(c.1)(i) and (ii);

b. in the case of depreciable property of a prescribed class, an amount not less than the least of the amounts described in subparagraphs 85(1)(e)(i), (ii) and (iii); and

c. in the case of eligible capital property, an amount not less than the least of the amounts described in subparagraphs 85(1)(d)(i), (ii) and (iii).

TC1, TC2, TC3, TC4, TC5, TC6, TC7 and TC8, as the case may be, will add to its respective stated capital account maintained for its Class A Preferred Shares, an amount equal to the aggregate of (a) the agreed amounts, in the case of each eligible property transferred to such TC, and (b) the aggregate FMV, in the case of each property transferred to such TC that is not an eligible property, less (c) the aggregate amount of DC’s liabilities assumed by such TCs described in Paragraph 29(a).

For greater certainty, the amount to be added to the stated capital account of such TC for it’s Class A Preferred Shares will not exceed the maximum amount that could be added to the PUC of such shares without a reduction taking place pursuant to subsection 85(2.1).

Redemption of Class A Preferred Shares

31. Immediately following the transfer of property to the TCs on the DC Transfer, each of TC1, TC2, TC3, TC4, TC5, TC6, TC7 and TC8, as the case may be, will redeem its Class A Preferred Shares owned by DC for an amount equal to the aggregate redemption amount and FMV of such shares. As sole consideration for such share redemption, TC1, TC2, TC3, TC4, TC5, TC6, TC7 and TC8, as the case may be, will issue a non-interest bearing demand promissory note (the “TC1 Redemption Note” in respect of TC1’s share redemption, the “TC2 Redemption Note” in respect of TC2’s share redemption, the “TC3 Redemption Note” in respect of TC3’s share redemption, the “TC4 Redemption Note” in respect of TC4’s share redemption, the “TC5 Redemption Note” in respect of TC5’s share redemption, the “TC6 Redemption Note” in respect of TC6’s share redemption, the “TC7 Redemption Note” in respect of TC7’s share redemption and the “TC8 Redemption Note” in respect of TC8’s share redemption) having a principal amount and FMV equal to the aggregate redemption amount and FMV of such TC’s Class A Preferred Shares so redeemed. DC will accept the TC1 Redemption Note, TC2 Redemption Note, TC3 Redemption Note, TC4 Redemption Note, TC5 Redemption Note, TC6 Redemption Note, TC7 Redemption Note and TC8 Redemption Note, respectively, as payment in full for the redemption of that particular TC’s Class A Preferred Shares.

TC First Taxation Year

32. At the end of the day on which the respective TCs Class A Preferred Shares are redeemed, each TC will cause its first taxation year to end.

Winding-Up, Liquidation and Dissolution of DC

33. The TCs will resolve to wind-up and dissolve DC pursuant to the relevant provisions of Act1.

34. In connection with the dissolution of DC, DC will distribute all of its assets, which will consist only of TC1 Redemption Note, TC2 Redemption Note, TC3 Redemption Note, TC4 Redemption Note, TC5 Redemption Note, TC6 Redemption Note, TC7 Redemption Note and TC8 Redemption Note and the rights to any tax refunds referred to in Paragraph 37, to TC1, TC2, TC3, TC4, TC5, TC6, TC7 and TC8, as the case may be, in accordance with their respective shareholdings. In particular, DC will:

(a) Assign and distribute TC1 Redemption Note to TC1;
(b) Assign and distribute TC2 Redemption Note to TC2;
(c) Assign and distribute TC3 Redemption Note to TC3;
(d) Assign and distribute TC4 Redemption Note to TC4;
(e) Assign and distribute TC5 Redemption Note to TC5;
(f) Assign and distribute TC6 Redemption Note to TC6;
(g) Assign and distribute TC7 Redemption Note to TC7; and
(h) Assign and distribute TC8 Redemption Note to TC8.

As a result of the assignment and distribution of the Redemption Notes held by DC as described in this Paragraph, the respective obligations of TC1, TC2, TC3, TC4, TC5, TC6, TC7 and TC8 under its particular TC note will merge and be extinguished.

35. To the extent that there is a positive balance in the CDA of DC immediately prior to the distribution of each TC Note, DC will elect, in the prescribed manner and prescribed form required under subsection 83(2), to treat the portion of the Winding-Up Dividend referred to in subparagraph 88(2)(b)(i) as a separate capital dividend paid. Pursuant to subparagraph 88(2)(b)(iv), each TC will each be deemed to have received a proportionate capital dividend from DC.

36. To the extent that there is a positive GRIP balance in DC at the time of the winding-up of DC, DC will designate, pursuant to subsection 89(14), to treat a portion of the Winding-Up Dividend referred to in subsection 88(2)(b)(iii) to be an eligible dividend by notifying TC1, TC2, TC3, TC4, TC5, TC6, TC7 and TC8 in writing, within the time limit prescribed in subsection 89(14), that the portion of such dividend is an eligible dividend.

37. Any refund of tax to which DC is entitled pursuant to the provisions of the Act as a result of over-payment of tax instalments will be distributed (under the terms of the agreement governing the dissolution of DC) pro-rata to each of the TCs.

38. After the distribution of the TC1 Redemption Note, TC2 Redemption Note, TC3 Redemption Note, TC4 Redemption Note, TC5 Redemption Note, TC6 Redemption Note, TC7 Redemption Note and TC8 Redemption Note as described in Paragraph 34 and the distribution of any tax refunds as described in Paragraph 37 but immediately before the formal dissolution of DC described in Paragraph 39, DC will not own or acquire any property or carry on any activity or undertaking.

39. Within a reasonable time following the transfer of such dividend refund, articles of dissolution will be filed by DC with the appropriate corporate registry and upon receipt of a certificate of dissolution DC will be dissolved.

ADDITIONAL INFORMATION

40. Except as described in this letter, no property has been or will be acquired, and no liabilities have been or will be incurred or paid by DC in contemplation of and before the Proposed Transactions, other than in a transaction described in subparagraphs 55(3.1)(a)(i) to (iv).

41. There has not been and will not be, as part of a series of transactions or events that includes the Proposed Transactions, any disposition or acquisition of property in circumstances described in subparagraphs 55(3.1)(b)(i) or (iii), or an acquisition of control in the circumstances described in subparagraph 55(3.1)(b)(ii).

42. Property received by a TC on the DC Transfer may be acquired by a person unrelated to a TC, or by a partnership, as part of a series of transactions or events that includes the Proposed Transactions in circumstances described in paragraph 55(3.1)(c). The disposition of such property (including shares of the XXXXXXXXXX), if and when they occur, will take place as taxable transactions and the value of any such properties sold or distributed will, for greater certainty, not represent more than XXXXXXXXXX% of the FMV, at the time of the Distribution, of all the property (other than money and indebtedness that is not convertible into other property) received by such TC on the Distribution.

43. At any time before and during the series of transactions and events that include the Proposed Transactions, none of the shares of any of the predecessor corporations, DC, TC1, TC2, TC3, TC4, TC5, TC6, TC7, or TC8, as the case may be, will be:

(a) the subject of any undertaking or agreement that is referred to in subsection 112(2.2) as a “guarantee agreement”;

(b) issued or acquired as part of a transaction, event or series of transactions or events of the type described in subsection 112(2.5);

(c) the subject of a dividend rental arrangement;

(d) the subject of any secured undertaking of the type described in paragraph 112(2.4)(a); or

(e) issued for consideration that is or includes:

(i) an obligation of the type described in subparagraph 112(2.4)(b)(i), other than an obligation of a corporation that is related (otherwise than by reason of a right referred to in paragraph 251(5)(b)); or

(ii) any right of the type described in subparagraph 112(2.4)(b)(ii).

44. None of the corporations referred to herein is, or will be, a specified financial institution.

45. None of the corporations referred to herein will be a corporation described in any of paragraphs (a) to (f) of the definition of “financial intermediary corporation” in subsection 191(1).

46. TC1, TC2, TC3, TC4, TC5, TC6, TC7, or TC8 will each have the financial capacity to honour, upon presentation for payment, the amount payable under the promissory note issued by it as part of the Proposed Transactions.

47. None of the Taxpayers have any outstanding tax liabilities that could be affected by the Proposed Transactions.

48. Subsequent to the Proposed Transactions, the Testamentary Trust will distribute the shares of TC8 to GC4 upon GC4 attaining the age of XXXXXXXXXX years in accordance with the terms of the Testamentary Trust.

PURPOSE OF THE PROPOSED TRANSACTIONS

49. The purpose of the Proposed Transactions is to divide the assets of DC among Sibling 1, Sibling 2, Sibling 3, GC1, GC2, GC3, GC4 and the Testamentary Trust so that each such person or trust will have direct and separate ownership of their pro-rata share of DC’s property. This will enable each shareholder to formulate and implement, in an independent manner, their own investment strategies with respect to their pro-rata share of DC’s property.

RULINGS GIVEN

Provided that the preceding statements constitute a complete and accurate disclosure of all relevant facts, proposed transactions and purposes of the Proposed Transactions, and provided that the Proposed Transactions are completed in the manner described above, we confirm the following:

A. Subject to the application of subsection 69(11), provided the appropriate joint elections are filed in the prescribed form and manner within the prescribed time specified in subsection 85(6) and provided each particular property so transferred is an eligible property in respect of which shares have been issued as full or partial consideration therefor, the provisions of subsection 85(1) will apply to:

(a) the transfers by Sibling 1, Sibling 2, Sibling 3, GC1, GC2, GC3, GC4 and the Testamentary Trust, as the case may be, of their respective DC Class A shares, DC Class B shares and DC common shares, as the case may be, to their respective TC as described in Paragraph 25; and

(b) the transfers of each eligible property owned by DC to TC1, TC2, TC3, TC4, TC5, TC6, TC7, or TC8, as the case may be, as part of the DC Transfer as described in Paragraph 28,

such that the agreed amount in respect of each such transfer will be deemed pursuant to paragraph 85(1)(a) to be the transferor’s proceeds of disposition of the particular property and the transferee’s cost thereof.

For greater certainty, paragraph 85(1)(e.2) will not apply to the transfers referred to herein.

B. On the redemption by each TC1, TC2, TC3, TC4, TC5, TC6, TC7, and TC8 of its Class A Preferred Shares owned by DC as described in Paragraph 31, by virtue of paragraph 84(3)(a) and (b), each of TC1, TC2, TC3, TC4, TC5, TC6, TC7, and TC8, as the case may be, will be deemed to have paid, and DC will be deemed to have received, a taxable dividend at that time equal to the amount, if any, by which the amount paid in respect of the redemption of such shares of that TC exceeds the aggregate PUC in respect of those particular shares immediately before such redemption.

C. Subsection 84(2) and paragraph 88(2)(b) will apply to the distributions by DC described in Paragraph 34 such that:

(a) Subject to Rulings C(b), (c) and (d), DC will be deemed to have paid a dividend (the “Winding-up Dividend”) on the DC shares held by TC1, TC2, TC3, TC4, TC5, TC6, TC7, and TC8, as the case may be, equal to the amount, if any, by which:

(i) the amount or value of the funds or property distributed with respect to the shares of that class, as the case may be,

exceeds

(ii) the amount, if any, by which the aggregate PUC in respect of the shares of that class is reduced on the distribution, as the case may be,

and each of TC1, TC2, TC3, TC4, TC5, TC6, TC7, as the case may be, will be deemed to have received a taxable dividend on such class equal to that proportion of the amount of the excess that the number of shares of that class held by TC1, TC2, TC3, TC4, TC5, TC6, TC7, and TC8, as the case may be, immediately before the distribution is of the number of shares of that class outstanding immediately before the distributions.

(b) to the extent that the CDA of DC has a positive balance immediately prior to its winding up, pursuant to subparagraph 88(2)(b)(i), such portion of the winding up dividend which arises from the distributions as does not exceed DC’s CDA, determined immediately before the payment of the winding up dividend, will be deemed, for the purposes of the subsection 83(2) election referred to in Paragraph 35, to be the full amount of a separate dividend that is a capital dividend;

(c) pursuant to subparagraph 88(2)(b)(iii), the winding up dividend arising from the distributions, to the extent that it exceeds the amount referred to in Ruling C(b), will be deemed to be a separate dividend that is a taxable dividend; and

(d) pursuant to subparagraph 88(2)(b)(iv), each of TC1, TC2, TC3, TC4, TC5, TC6, TC7, and TC8 will be deemed to have received its proportional share of the dividends described in Rulings C(b) and C(c).

D. The taxable dividends described in Rulings B and C:

(a) will be included in computing the income of the recipient corporation deemed to have received such a dividend pursuant to subsection 82(1) and paragraph 12(1)(j);

(b) will be deductible by the recipient corporation pursuant to subsection 112(1) in computing its taxable income in the year in which such a dividend is deemed to have been received, and, for greater certainty, will not be prohibited by subsections 112(2.1), (2.2), (2.3), or (2.4);

(c) will be excluded in determining the recipient corporation proceeds of disposition of the shares so redeemed, purchased or cancelled pursuant to paragraph (j) of the definition of “proceeds of disposition” in section 54;

(d) will, by virtue of subsection 112(3), reduce the loss, if any, in respect of the disposition of the shares on which the dividend is deemed to be received;

(e) will not give rise to tax under Part IV except as provided in paragraph 186(1)(b); and

(f) will not be subject to tax under Part IV.1 or VI.1.

E. Provided that as part of the series of transactions or events that includes the Proposed Transactions, there is not:

(a) an acquisition of property in the circumstances described in paragraph 55(3.1)(a);

(b) a disposition of property in the circumstances described in subparagraph 55(3.1)(b)(i);

(c) an acquisition of control in the circumstances described in subparagraph 55(3.1)(b)(ii);

(d) an acquisition of shares in the circumstances described in subparagraph 55(3.1)(b)(iii); or

(e) an acquisition of property in the circumstances described in subparagraph 55(3.1)(c) or (d);

which has not been described herein, then by virtue of paragraph 55(3)(b), subsection 55(2) will not apply to the taxable dividends referred to in Rulings B and C and, for greater certainty, subsection 55(3.1) will not apply to deny the exemption under paragraph 55(3)(b).

F. The provisions of subsection 15(1), 56(2), 69(1) and 246(1) will not apply to any of the Proposed Transactions, in and by themselves.

G. The provisions of subsection 245(2) will not be applied as a result of the Proposed Transactions, in and by themselves, to redetermine the tax consequences confirmed in the rulings given herein.

These rulings are given subject to the limitations and qualifications set forth in Information Circular 70-6R10 issued on September 29, 2020, and are binding on the CRA, provided that the Proposed Transactions are completed no later than six (6) months after the date of this letter. The above rulings are based on the law as it reads at the date of this letter and do not take into account any proposed amendments to the Act and the Regulations, which if enacted, could have an effect on the rulings provided herein.

OTHER COMMENTS

Unless otherwise confirmed in the above rulings, nothing in this letter should be construed as implying that the CRA has confirmed, reviewed or has made any determination in respect of:

a) the PUC of any share or the ACB or FMV of any property referred to herein;

b) the balance of the CDA, GRIP, ERDTOH or NERDTOH of any corporation;

c) the amount of any capital loss or terminal loss of any entity referred to herein;

d) any other tax consequence relating to the facts, Proposed Transactions, additional information, or any transaction or event taking place either prior to the Proposed Transactions or subsequent to the Proposed Transactions, whether described in this letter or not, other than those specifically described in the rulings given above, including whether any of the Proposed Transactions would also be included in a series of transactions or events that includes other transactions or events that are not described in this letter.

Nothing in this letter should be construed as confirmation, express or implied, that, for the purposes of any of the rulings given above, any adjustment to the FMV of the properties transferred or the redemption amount of the shares issued as consideration, whether pursuant to a price adjustment clause or otherwise, will be effective retroactively to the time of the transfer and issuance of shares. Furthermore, none of the rulings given in this letter are intended to apply to or in the event of the operation of a price adjustment clause, since such adjustment will be due to circumstances that do not constitute proposed transactions that are seriously contemplated. The general position of the CRA with respect to price adjustment clauses is stated in Income Tax Folio S4-F3-C1 Price Adjustment Clauses.

An invoice for our fees in connection with this ruling request will be forwarded to you under separate cover.

Yours truly,

XXXXXXXXXX
For Division Director
Reorganizations Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch