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.
XXXXXXXXXX
Attention: XXXXXXXXXX
Dear Sirs:
This is in reply to your letter dated December 13, 1993 with respect to the meaning of the phrase "vested indefeasibly" in the case of certain shares which are distributed to a taxpayer's spouse subject to the terms of the buy-sell provisions of a shareholders agreement to which both the taxpayer and the spouse are a party.
As indicated in our letter of November 30, 1993, the determination of whether or not property has vested indefeasibly in a particular person is a question of fact which can only be made following a review of all relevant information, including the will and any agreements which may have an impact on the manner in which the person may deal with the property.
We do not agree with your view that the judgement in the recent decision of the Federal Court of Appeal in The Queen v. Sharon Boechler, Executrix of the Estate of Alexander Boger, deceased 93 DTC 5276, means that a property will be vested indefeasibly in a person unless there is a condition subsequent or a determinable limitation set out in the will. In the situation described in your original letter, it would appear that, notwithstanding the terms of the will, the grant of the shares would also be subject to the terms of the shareholders agreement entered into by the parties. Consequently, we believe that any limitation or condition subsequent set out in the terms of the shareholders agreement would be considered as "a condition subsequent or a determinable limitation set out in the grant".
These comments are provided in accordance with the guidelines set out in paragraph 21 of Information Circular 70-6R2.
Yours truly,
for DirectorReorganizations and Foreign DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
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