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 16, 1990 |
| Returns Processing Division |
Financial Industries Division |
| Information Returns Group |
Peter Lee |
| |
957-2745 |
| Attention: J.M. Legault |
| Director |
| |
File No. 7-4580 |
| |
Your fileYour file |
HAV 8994-1 |
Subject: Reporting Requirements Respecting Convertible Securities
We are writing in reply to your memorandum of December 8, 1989, wherein you requested our opinion on the reporting requirements under section 230 of the Income Tax Regulations (the "Regulations") with respect to certain security transactions which may be subject to the application of sections 49, 76 or 77 of the Income Tax Act (the "Act").
Some securities, predominantly shares and bonds, commonly include conversion rights which the holder of the security may exercise in a variety of circumstances. The conversion may be for a similar security (e.g. bond to bond, share to share) or to a different security (e.g. bond to share, share to specified quantity of gold). Such securities are called "convertible securities" hereunder. In some instances, a conversion right is severable from a convertible security and can be traded separately in which cases the conversion right is considered to be a separate property (hereunder called "conversion option"). Provided the convertible securities and conversion options are "securities" within the meaning of the term under subsection 230(1) of the Regulations, the reporting requirements under section 230 of the Regulations are applicable in respect of purchases, sales, redemptions, acquisitions or cancellations of the convertible securities and convertible options, with the following exceptions:
(a) cases where subsection 230(7) is applicable, or
(b) transactions to which section 51, 86 (where there is no consideration receivable other than new shares) or 87 subsection 98(3) or (6) of the Act is applicable.
21(1)(b)
DirectorFinancial Industries DivisionRulings Directorate
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1990
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1990
Email this Content