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) |
5-8831 |
| |
M. Eisner |
| |
(613) 957-2138 |
| December 13, 1989 |
Dear Sirs:
This is in reply to your letter of September 29, 1989 concerning "connected corporations" in relation to subparagraph (c)(ii) of the definition of "qualified small business corporation share" in subsection 110.6(1) of the Income Tax Act.
In relation to your enquiry, you have outlined a hypothetical situation where Mr. A. owns 100% of the outstanding shares of A Co. and Mr. B. owns 100% of the outstanding shares of B Co. A and B are brothers.
With respect to this situation, it is our general view that for the purposes of determining whether one corporation is connected with another corporation under subsection 186(4) for the purposes of subparagraph (c)(ii) of the definition of "qualified small business corporation share", the enlarged notion of control set out in subsection 186(2) is applicable. Accordingly, Co. A and Co. B are connected to each other for the purposes of that subparagraph.
These comments represent our opinion of the law as it applies generally. As indicated in paragraph 24 of Information Circular 70-6R dated December 18, 1978, this opinion is not a ruling and, accordingly, it is not binding on Revenue Canada, Taxation.
We trust that you will find the foregoing satisfactory.
Yours truly,
for DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and IntergovernmentalAffairs 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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