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.
| 19(1) |
File No. 5-7953 |
| |
D. Turner |
| |
(613) 957-2094 |
June 6, 1989
Dear Sirs:
Re: Subparagraph 96(2.2)(d)(ii) of the Income Tax Act (the "Act")
We are writing in your letter of April 21, 1989, wherein you requested our technical interpretation with respect of subparagraph 96(2.2)(d)(ii) of the Act.
In your letter you requested that we provide an opinion with respect to the following questions:
1. Will the exception to the at-risk rules in subparagraph 96(2.2)(d)(ii) of the Act apply to any third party who acquires a right to a 'prescribed revenue guarantee"?
2. Must the recipient of the revenue guarantee have an ownership interest in the prescribed film production in order for the subparagraph 96(2.2)(d)(ii) of the Act to apply?
3. If an ownership interest in necessary, what degree of ownership is acceptable?
4. If an ownership interest is necessary, must the degree of participation in the revenue guarantee be the same as the degree of ownership in the film?
Our Comments
We offer the following opinions related to the above questions.
1. In our opinion, the scope of the words "in respect of" as used in subparagraph 96(2.2)(d)(ii) of the Act is such that the exception would apply to any third party who acquired a right to a "prescribed revenue guarantee".
2. In our opinion, it is not necessary for the recipient of a "prescribed revenue guarantee" to have an ownership interest in the prescribed film production in order for the subparagraph 96(2.2)(d)(ii) of the Act to Apply.
3. See response to question 2.
4. See response to question 2.
We trust our comments will be of assistance.
Yours truly,
for Director Small Business and General Division Specialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1989
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© Sa Majesté la Reine du Chef du Canada, 1989
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