3 January 1990 Ministerial Correspondence 58714 F - Short-term Preferred Share Definition

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.

January 3, 1990

19(1)

Re:  Subsection 248(1) of the Income Tax Act (the "Act")  Short-term preferred share definition

We are writing in response to your letter of September 22, 1989, in which you have requested a technical interpretation concerning paragraphs (a) and (h) in the definition of Short-term Preferred Shares contained in subsection 248(1) of the Income Tax Act (the "Act").

Where a share is a short-term preferred share by virtue of the satisfaction of conditions described in paragraphs (a) or (h) of the definition of short-term preferred share in subsection 248(1), it is our view that if the conditions cease to be satisfied, then the characterization of the shares as short-term preferred shares could change at that time.

The above opinions are of a purely general nature.  In accordance with paragraph 24 of Information Circular 70-6R, they do not constitute advance income tax rulings and consequently are not binding on the Department.

Yours truly,

for DirectorFinancial Industries DivisionRulings Directorate