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.
24(1) 920301
Bill Guglich
(613) 957-2102
Attention: 19(1)
March 31, 1992
Dear Sirs:
Re: Prescribed Shares
This is in reply to your letter of January 27, 1992, concerning the requirements of clause 6205(4)(f)(iii)(A) of the Income Tax Regulations.
It is our view that the requirements of clause 6205(4)(f)(iii)(A) of the Regulations would be met in a situation where pursuant to an employee share purchase agreement the requirements of subclause 6205(4)(f)(iii)(A)(I) are satisfied during some fixed period of time after the share purchase by the employee and thereafter the requirements of subclause 6205(4)(f)(iii)(A)(II) are satisfied. Whether either subclause is satisfied will be a question of fact, the determination of which will require a consideration of all the circumstances and not only the terms of the employee share purchase agreement.
This opinion is our best interpretation of the law as it applies generally. It may, however, not always be appropriate in the circumstances of a particular case, and as stated in paragraph 24 of Information Circular 70-6R2, it is not binding on the Department.
We trust our comments will be of assistance to you.
Yours truly,
E. Wheelerfor DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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