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.
Principal Issues:
The issues are whether the positions in three documents concerning dividend reinvestment plans are still valid.
Position TAKEN:
The positions are still valid.
Reasons FOR POSITION TAKEN:
The positions have not been changed.
940553
XXXXXXXXXX M. Eisner
Attention: XXXXXXXXXX
June 20, 1994
Dear Sirs:
Re: Dividend Investment and Stock Option Plans
This is in reply to your letter of February 25, 1994 in which you attached copies of correspondence authored by this Direcorate concerning the subject obtained by you under the Access to Information Act. You asked whether the positions set out therein can be considered to be current. The three documents you enclosed are dated March 28, 1991 and November 8, 1991, (document numbers 910235 and 912013 respectively) on the subject of dividend investment plans and November 5, 1991 (document number 912999) relating to a stock option plan.
The positions set out in the letters you attached can be regarded as being current. However, we also note that the comments set out on page 3 of the letter dated November 8, 1991, which concern a dividend investment plan where shares would be acquired at a discount of 5%, relate to a public corporation. In addition, those comments only relate to such a plan the tax consequences of which would not be considered to be offensive. Accordingly, the Department's position on such plans is usually obtained through the advance income tax rulings process.
While we have provided you with the comments you requested in this instance, please be advised that it is not the Department's practice to provide comments on the validity of positions set out in previous correspondence obtained under the Access to Information Act. Should you have a factual situation involving proposed transactions contemplated by a particular taxpayer, a request for an advance income tax ruling should be submitted in accordance with the instructions and guidelines set out in Information Circular 70-6R2 dated September 28, 1990 and Special Release dated September 30, 1992. If you require the Department's non-binding views on a hypothetical set of facts, a request for an opinion, describing as many of the details as possible and a discussion of the relevant law, should be submitted. A request for the Department's opinion on completed transactions should be submitted to the District Taxation Office serving the geographical location of the taxpayer involved.
We trust our comments will be of assistance to you.
Yours truly,
P.D. Fuoco
for Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
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