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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department. Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Charlottetown District Office Specialty Rulings
Directorate
D. Holtz
Mr. Herb Terris (613) 957-2114
Chief of Audit
July 17, 1989 7-4125
SUBJECT: XXX
This is in response to your memorandum of July 7, 1989 which was forwarded to us by Mr. J.R. Robertson, Director General, Compliance Research and Investigations Directorate.
We agree with your conclusion to disallow the application of subsection 85(1) of the Act to the sale of the building to XXX in 1985 on the basis that the relevant shares to be given as consideration were never authorized or issued. In addition, we note that a capital dividend was paid on these preference shares (your exhibit 8). As the shares were never issued, the amount paid was not a dividend and the amount should be assessed pursuant to subsection 15(1) of the Act.
As for the amounts that you propose to assess pursuant to subsection 15(1) of the Act, we agree that such an assessment is warranted provided there is no documentary evidence that these were legitimate disbursements by the corporation.
Please contact the writer if you have any further questions.
R.J.L. Read
Acting Assistant Deputy Minister
Legislative and Intergovernmental Affairs Branch
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