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.
DM'S OFFICE (2) 94-00085M
ADM'S OFFICE (3)
RETURN TO RULINGS, ROOM 303, MET. BLDG.
AUTHOR
SUBJECT OR CORPORATE FILE
April 5, 1994
XXXXXXXXXX
Dear XXXXXXXXXX:
The Honourable David Anderson, Minister of National Revenue, has asked me to reply to your letter of December 20, 1993, concerning investments for pension corporations. I apologize for the delay in replying to you.
You referred specifically to the Department's response to question 7 at the Round Table held by the Canadian Tax Foundation on December 1, 1993. The question dealt with the extent to which pension corporations may participate in real estate holdings without jeopardizing their tax exempt status.
I am pleased to inform you that the Department has re-examined its previous position and is now of the view that a pension fund realty corporation may acquire or hold capital property that is real property or an interest therein, whether or not there may be co-owners of the property who are non-qualified persons. Further, where such a corporation owns a 50 per cent undivided interest in real property, it may accept responsibility for 50 per cent of the obligation to maintain, improve, lease or manage the property. As a second example, where such a corporation owns a 50 per cent interest in a property, another corporation described in paragraph 149(1)(o.2) of the Income Tax Act owns a 25 per cent interest and a taxable entity owns the remaining 25 per cent interest, either one of the two paragraph 149(1)(o.2) corporations concerned may undertake up to 75 per cent of the maintaining, improving, leasing or managing responsibilities associated with the entire property.
Thank you for writing and I trust that this information will be helpful.
Yours sincerely,
Pierre Gravelle, Q.C.
J.D. Brooks
957-2103
March 14, 1994
940160
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