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.
Principal Issues:
Whether disposition arises on conversion of gold certificate into specified amount of gold bullion.
Position TAKEN:
Where the gold certificate evidences the ownership of a stated amount of gold bullion and is held as capital property, the exchange of same for such amount of gold bullion will not be considered to result in a disposition.
Reasons FOR POSITION TAKEN:
Reflects comments made in paragraph 4 of Interpretation Bulletin IT-387R2.
941219
XXXXXXXXXX A.A. Cameron
Attention: XXXXXXXXXX
August 11, 1994
Dear Sirs:
Re: Conversion of Gold Certificates
This is in reply to your letter of May 6, 1994 wherein you requested a technical interpretation as to whether upon the conversion of a gold certificate for a certain number of ounces of gold bullion into such stated amount of gold bullion would give rise to a disposition for purposes of the Income Tax Act (the "Act") to the holder of that certificate. You have also indicated, in your facsimile of August 5, 1994, that such certificate would be exchangeable by the holder for gold bullion at any time and that a storage fee would be charged during the period when the certificate would be held.
Since your letter would appear to relate to a specific taxpayer, we are unable to provide any comments concerning the particular situation detailed therein. We would note, however, that in the context of a gold certificate evidencing ownership of a stated amount of gold bullion and which is held as a capital property for purposes of the Act, the Department's view remains, as stated in the second sentence of paragraph 4 of Interpretation Bulletin IT-387R2, that an exchange of such a certificate for the corresponding amount of bullion will not be considered a disposition for purposes of the Act.
The foregoing comments represent our general views with respect to the above subject. In accordance with paragraph 21 of Information Circular 70-6R2 the comments expressed herein do not constitute an advance income tax ruling and consequently are not binding on Revenue Canada.
If you have any further questions concerning this matter, please do not hesitate to contact the writer.
Yours truly,
for Acting Director
Manufacturing Industries, Partnerships
and Trusts Division
Rulings Directorate
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