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: Supplemental ruling to 2020-084806 Whether minor typographical and factual corrections affect the butterfly ruling previously issued?
Reasons: The changes do not impact the butterfly already completed.
Position: Favourable.
XXXXXXXXXX 2022-093005
XXXXXXXXXX, 2022
Dear XXXXXXXXXX:
Re: Supplemental Income Tax Ruling Request
XXXXXXXXXX
This is in reply to your letter dated XXXXXXXXXX. It is supplemental to our advance income tax ruling number 2020-084806 (the Ruling Letter) that was issued to the above-captioned taxpayers on XXXXXXXXXX. We also acknowledge the additional information provided to us in subsequent correspondence and during our various telephone conversations. The information that you provided in such correspondence and in the telephone discussions form part of this letter only to the extent described herein.
You indicated that the Proposed Transactions described in the Ruling Letter have been completed. As requested, the amendments (the Amendments), as set out below in this letter (the Supplemental Ruling Letter), are hereby made to the Ruling Letter.
Unless otherwise defined herein, all capitalized terms in the Supplemental Ruling Letter have the meanings assigned to them in the Ruling Letter, and, where the circumstances so require, the singular should be read as plural and vice versa.
RULING LETTER – DEFINITIONS
1. The definition of “A Family Trust” is amended by deleting XXXXXXXXXX and replacing it with XXXXXXXXXX.
2. The definition of “A Joint Spousal Trust” is amended by adding XXXXXXXXXX after the words “the XXXXXXXXXX Joint Spousal Trust”.
3. The definition of “B Family Trust” is amended by deleting XXXXXXXXXX and replacing it with XXXXXXXXXX.
4. The definition of “BCA3” is amended by deleting the words “C.R.C., c.427”” and replacing them with “RSC, 1985 c. C-44”.
5. The definition of “DC1 Amalco Class C Preferred Shares” is amended by deleting “Paragraph 205(c)” and replacing it with “Paragraph 205(b)”.
6. The definition of “DC1 Amalco Class D Preferred Shares” is amended by deleting “Paragraph 205(c)” and replacing it with “Paragraph 205(b)”.
7. The definition of “DC1 Amalco Class E Preferred Shares” is amended by deleting “Paragraph 205(c)” and replacing it with “Paragraph 205(b)”.
8. The definition of “DC1 Amalco Class F Preferred Shares” is amended by deleting “Paragraph 205(c)” and replacing it with “Paragraph 205(b)”.
9. The definition of “DC2 Amalco Common Shares” is deleted.
10. The definition of “E Spouse” is amended by deleting the word “XXXXXXXXXX” and replacing it with “XXXXXXXXXX”.
11. The definition of “Fifth Amalgamation” is amended by deleting “,” after Aco, inserting the word “and” after Aco, and deleting the words “and DC2 Amalco”, such that after the changes it reads:
“Fifth Amalgamation” means the amalgamation of Aco and DC1 Amalco, as described in Paragraph 306;
12. The definition of “Oco Sub-Subsidiary 1” is amended by deleting the word “BCA1” and replacing it with “BCA3”.
13. The definition of “Oco Subsidiary 2” is amended by deleting the word “BCA1” and replacing it with “BCA3”.
14. The definition of “Vco” is amended by adding the words “as described in Paragraph 142” after the word “BCA2”.
The following definitions are added following “DC2 Amalco”:
15. “DC2 Amalco Class A Shares” means a class of shares of DC2 Amalco described in Paragraph 247;
16. “DC2 Amalco Class B Shares” means a class of shares of DC2 Amalco described in Paragraph 247;
17. “DC2 Amalco Class C Shares” means a class of shares of DC2 Amalco described in Paragraph 247;
RULING LETTER – FACTS
18. Paragraph 12 is amended by deleting the words on “XXXXXXXXXX” and “XXXXXXXXXX” and replacing them with “XXXXXXXXXX” and XXXXXXXXXX”, respectively.
19. Paragraph 31 is amended by deleting the word “D” and replacing it with “Dco” in the last sentence of the Paragraph.
20. Paragraph 59 is amended by deleting the words “XXXXXXXXXX” and replacing them with “XXXXXXXXXX”.
21. Paragraph 62 is amended by deleting the words “Preferred” from “Class D Preferred” in both places in the final paragraph.
22. Paragraph 82 is amended by deleting “XXXXXXXXXX” and replacing it with “XXXXXXXXXX”.
23. Paragraph 105 is amended to delete XXXXXXXXXX from the name of “XXXXXXXXXX”.
24. Paragraph 109 is amended by replacing XXXXXXXXXX with XXXXXXXXXX.
25. Paragraph 113 is amended to insert the word “Preferred” into “Class F shares” and the word “Common” into “Class C shares” and “Class E Shares”, such that after the changes, it reads:
Shareholder Number Class
Nco XXXXXXXXXX Class F Preferred Shares
Sco XXXXXXXXXX Class C Common Shares
Sco XXXXXXXXXX Class E Common Shares
The aggregate PUC and ACB of the Class F Preferred Shares held by Nco is $XXXXXXXXXX; of the Class C Common Shares held by Sco is $XXXXXXXXXX; and of the Class E Common Shares held by Sco is $XXXXXXXXXX.
26. Paragraph 174 is amended by inserting the word “Yco” before the words “Management Employees”, such that the phrase reads “Yco Management Employees”.
RULING LETTER – PROPOSED TRANSACTIONS
27. Paragraph 190(b)(iv) is amended to delete the words “or within 120 days after issuance” before “(plus any declared but unpaid dividends)”.
28. Paragraph 190.1 is amended to delete the words “Concurrent with” at the start of the second sentence and replace them with “Immediately before or concurrently with”.
29. The last sentence of Paragraph 206 is amended to delete the word “and” before “DC1 Amalco Class E Preferred Shares” and replace it with “,” and to insert the words “and DC1 Amalco Class F Preferred Shares” after the words “DC1 Amalco Class E Preferred Shares”.
30. Paragraph 206.4 is amended by deleting the words “the DC1 Amalco Class E Common Shares and” after the words “the aggregate FMV of”.
31. The 5th line of Paragraph 232 is amended to add the word “Amalco” after “DC1” in reference to the Class D Preferred Shares.
32. Paragraph 234 is amended by deleting the words “Paragraph 234(a)” and replacing them with “Paragraph 236(a)”.
33. Paragraph 308 is amended by deleting the words “Class B” in reference to the Preferred Shares owned by A Joint Spousal Trust.
34. Paragraph 321.1 is amended to delete the words “Paragraph 183.1” and replacing them with “Paragraph 183.2”. In the third line of Paragraph 321.1, “o” is replaced with “to”.
CONFIRMATION
Provided that the preceding statements and the statements contained in the Ruling Letter constitute a complete and accurate disclosure of all the relevant facts and proposed transactions and of the purposes of the Proposed Transactions and the Amendments, notwithstanding the Amendments, we hereby confirm that, subject to the conditions, limitations, qualifications and comments set out in the Ruling Letter and in Information Circular 70-6R12 dated April 1, 2022, the Rulings given in the Ruling Letter will continue to be binding on the CRA.
Yours truly,
XXXXXXXXXX
for Division Director
Reorganizations Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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