1 June 1990 Ministerial Correspondence 59634 F - Taxable Capital Employed in Canada of a Financial Institution - Meaning of "Tangible Property"

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.

Attention:  19(1)

June 1, 1990

Dear Sir:

We are writing in response to your correspondence of February 19, 1990 wherein you requested clarification of the term "tangible property" as utilized in the determination of the taxable capital employed in Canada of a financial institution pursuant to draft subsection 181.3(1) of the Income Tax Act relating to the proposed Part I.3 Tax on Large Corporations.

It is our opinion that, for the purpose of the aforementioned subsection, real property used in a business and foreclosed property constitute tangible property while cash on hand, investments in marketable securities, funds on deposit at other financial institutions or loans receivable by a financial institution, the ordinary business of which includes the lending of money, would not be so included.  We would caution that these particular assets to be included or excluded in the determination of tangible property.

We would also advise that the opinions expressed above are based upon the amendments to the Income Tax Act proposed in Bill C-28 as passed by the House of Commons on December 20, 1989.  Further, while we trust that our comments are of assistance to you, they do not constitute an advance income tax ruling and are, therefore, not binding on the Department in respect of a particular situation.

Yours truly,

for DirectorFinancial Industries DivisionRulings Directorate