14 December 1989 Ministerial Correspondence 58374 F - Acquisition of Control of Subsidiary by Parent

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.

December 14, 1989

Dear Sirs:

Re:  Paragraphs 88(1)(c) and (d) of the Income Tax Act (Canada) (the "Act")

This is in reply to your letter of July 10, 1989 wherein you requested a technical interpretation of the application of the above-captioned provisions of the Act to the fact situation described by you in the said letter and reproduced below.

Facts Situation

24(1)

Comments

The situation which you set out is quite specific and it appears that it relates to a particular contemplated transaction.  Assurances as to the tax consequences of contemplated transactions can only be given in response to a request for an advance income tax ruling.  The procedure for requesting an advance income tax ruling.  The procedure for requesting an advance income tax ruling is outlined in Information circular 70-6R, published by Revenue Canada, Taxation on December 18, 1978 ("IC 70-6R").  If you wish to obtain any binding commitment with respect to an actual case with facts similar to your example, an advance income tax ruling application should be submitted.

Although we are unable to provide any binding assurance with respect to the queries you have raised, generally we would expect that the provisions of paragraph 88(1)(c) and (d) of the Act would be available in respect of property provided the property was capital property at the time the parent last acquired control of the subsidiary.  Whether or not the property was capital property at the time the parent last acquired control of the subsidiary.  Whether or not the property was capital property at that time is a question of fact.

These comments are made subject to the general limitations and qualifications contained in IC 70-6R.

Yours truly,

for DirectorReorganizations and Non-resident DivisionSpecialty Rulings DirectorateLegislative and IntergovernmentalAffairs Branch