6 April 1994 External T.I. 9406045 - AMALAGAMATION AND TAXABLE PREFERRED SHARES

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:

Does paragraph (e) of taxable preferred shares result
in a shares losing their granfathered status in an

amalgamation pursuant to 87(4.2)?

Position TAKEN:

We will deal with the subject only by way of Advance
Rulings

Reasons FOR POSITION TAKEN:

Agreement as to conversion or convertability

940604
XXXXXXXXXX C. Tremblay

Attention: XXXXXXXXXX

April 6, 1994

Dear Sirs:

Re: Amalgamations and Taxable Preferred Shares

This is in reply to your facsimile letter of March 9, 1994, and further to a telephone conversation of March 24, 1994
(XXXXXXXXXX/Tremblay) wherein you requested our confirmation with respect to the manner in which the Department would apply the taxable preferred share provisions of the Income Tax Act.

The situation that is described appears to involve a proposed transaction. It is not our practice to give written opinions concerning proposed transactions, other than by way of Advance Rulings as indicated in Information Circular 70-6R2. Accordingly, and further to our telephone conversation, we are unable to provide any opinion or confirm your interpretation in respect of the first four questions posed.

We can confirm, however, in answer to your question # 5, that the interpretation based on the facts given at paragraph 28 of Information Circular 88-2 is still our Position.

We trust our comments will be of assistance to you.

Yours truly,

for Director
Financial Industries Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch