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.
Dear Sirs:
Re: Article 13 of the Canada-United Kingdom Income Tax Convention (the "Treaty")
This is reply to your letter dated August 24, 1990 whereby you requested our opinion concerning subparagraph 7(b) of Article 13 of the Treaty.
In our opinion, mines and minerals reserves and rights to explore for and/or exploit mineral deposits owned and used by a corporation in its business of exploitation of and/or exploration for minerals would constitute "property... in which the business of the company... was carried on" within the meaning of subparagraph 7(b) of Article 13 of the Treaty, provided the mines, mineral reserves or rights are not in respect of petroleum, natural gas or other related hydrocarbons referred to in paragraph 4 of Article 13. We note that coal is a "related hydrocarbon".
A determination of from what shares derive their value or the greater part of their value is essentially a question of fact that can only be determined after consideration of all relevant facts including the manner in which the various assets of the company have been financed.
Generally, subject to any special provisions such as paragraph 4 of Article 13 of the Treaty, our opinion set forth above in respect of subparagraph 7 (b) of Article 13 of the Treaty will also apply in respect of comparable provisions of other income tax conventions.
Yours truly,
for DirectorReorganizations and Non-Resident DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch.
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© Her Majesty the Queen in Right of Canada, 1991
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© Sa Majesté la Reine du Chef du Canada, 1991
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