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.
1993 CANADIAN PETROLEUM TAX SOCIETY
QUESTION 15
(General Anti-Avoidance Rule and Large Corporation Tax: 245(2); Part I.3)
If a corporation uses its liquid assets immediately prior to year-end to invest in preferred shares of another corporation, thereby increasing its investment allowance and reducing its Part I.3 tax liability, and shortly after year-end causes the redemption of the preferred shares, would Revenue Canada consider applying 245(2)?
DEPARTMENT'S POSITION
The Department would consider applying subsection 245(2) where the primary purpose of the transactions is to obtain a tax advantage through a temporary shift to assets which qualify for the investment allowance under Part I.3.
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© Her Majesty the Queen in Right of Canada, 1993
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© Sa Majesté la Reine du Chef du Canada, 1993
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