4 May 1988 Income Tax Severed Letter 7-2650 - [Agreement in Writing]

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.

MEMORANDUM NOTE DE SERVICE

                                     DATE MAY - 4 1988
                                          MAI

TO/À HALIFAX DISTRICT OFFICE` Audit Review

J.R. Miller

FROM/DE SMALL BUSINESS AND GENERAL
         DIVISION
        E. Mikhail
        (613) 957-2095

FILE DOSSIER 7-2650

SUBJECT: Agreement in Writing OBJET: --------------------

This is in reply to your memorandum of March 9, 1988, in which you asked for our view on whether the terms as agreed between XXXXXXXX as evidenced in writing in letters dated up to May 26, 1987, could be viewed as an agreement in writing entered into on or before June 17, 1987, for purposes of resolution 35 of the Notice of Ways and Means Motion dated December 16, 1987.

In the meantime the Department of Finance has released draft legislation to enact resolution 35. The Draft Legislation and Regulations to Implement Income Tax Reform released April 13, 1988, subsection 8(5), on page 21, deals with the grandfathering provision. The wording of the draft legislation differs from the wording used in the resolution. Accordingly, our reply addresses the question whether the requirements for grandfathering as proposed in the draft legislation have been met. Subsection 8(5) reads in part as follows:

"... with respect to dispositions of property occurring after June 17, 1987, otherwise than pursuant to the terms of an obligation entered into in writing before June 18, 1987, and before paragraph 14(5)(a) as enacted by subsection (2) comes into effect ..."

XXXX       it is our view that the correspondence between
XXXX                             dated up to May 26, 1987, 
does not likely create a legally binding obligation entered into before 
June 18, 1987, provided of course that subsection 8(5) as it presently 
reads will be enacted. However, because the issue is not free from doubt,
if   XXXX  wishes to make additional representations on this matter, 
we would be glad to consider them.

Original Signed by Original signé par J. HARRIS

Chief Merchandising, Manufacturing and Construction Section Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch