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.
Financial Industries Division F. Francis Sections: 41, 42, 44
Financial Difficulty Rulings
This to advise that the following additional rulings, if requested, are now considered "standard" rulings for financial difficulty rulings:
1. No amount will be included in the income of DistressCo pursuant to subsections 15(1) and 246(1) of the Act solely by virtue of the fact that interest will not be paid or payable by DistressCo to Newco on the Debt.
2. Provided that the Debt arose from one or more loans made by the SFI in the course of its money lending business, the Debt reacquired by the SFI will be considered to have been acquired by the SFI in the ordinary course of its business of lending money for purposes of paragraphs 20(1)(l) and 20(1)(p) of the Act.
3. Subsection 112(4) of the Act will not apply, in respect of any dividends received by the SFI on the Distressed Preferred Shares, to any loss realized by the SFI on the Debt subsequent to it being reacquired by the SFI or to any loss realized by the SFI on any loan made by the SFI as described above.
Director Financial Industries DivisionRulings Directorate
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