25 March 1994 External T.I. 9407005 - GAINS AND LOSSES ON STOCK INDEX FUTURES

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.

			940700
XXXXXXXXXX	J.P. Dunn

Attention: XXXXXXXXXX

March 25, 1994

Dear Sirs:

Re: Gains and Losses on Stock Index Futures Contracts

We are writing in response to your facsimile correspondence of March 16, 1994 wherein you had requested clarification of certain matters contained in our letter of March 7, 1994 regarding the above referenced topic.

In the aforementioned letter, the Department expressed the view that gains realized or losses incurred by a mutual fund in respect of its investment in stock index futures would be presumed to be on account of income rather than on account of capital.

Pursuant to your current request, we would confirm that the expression of this view should not be construed as implying that a conclusion to this effect was reached by the Department with respect to the particular hypothetical fact situation described in your original letter. Written statements which bind the Department to a particular interpretation of taxation law are issued as advance income tax rulings however, as noted in Information Circular IC 70-6R, the Department will generally not provide such a ruling in circumstances which involve a determination of the treatment for income tax purposes of any proposed transaction as being on account of income or capital.

We trust that this is the information which you require.

Yours truly,

for Director
Financial Industries Division
Rulings Directorate