25 September 1989 Ministerial Correspondence 58634 F - General Anti-Avoidance Rule

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.

September 25, 1989

Dear Sirs:

Re:  Section 245 of the Income Tax Act (the "Act")

We are writing in response to your letter of August 31, 1989 wherein you requested our opinion as to whether the provisions of section 245 of the Act would apply to the situation outlined in your letter.

The situation outlined in your letter appears to involved actual proposed transactions with identifiable taxpayers.  Assurance as to the tax consequences of proposed transactions can only be given in the context of an advance income tax ruling.  The procedures for requesting an advance income tax ruling are outlined in Information Circular 70-6R, dated December 18, 1978, and the Special Release thereto.

In order to determine whether or not subsection 245(2) of the Act would apply to a particular situation, we would have to examine all of the relevant facts of the particular situation.  Since all the facts of a particular situation can only be disclosed in the context of an advance income tax ruling, we are not able to express an opinion as to whether subsection 245(2) of the Act would apply to your situation.  Although your situation might be less objectionable that the situation outlined in paragraph 22 of Information Circular 88-2 because the partnerships will continue to exist, we are only prepared to give a definitive response int eh context of an advance income tax ruling.

Yours truly,

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