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:
Whether amendments to terms and conditions of distress preferred shares relating to redemption of shares would cause the shares to lose their status as distress preferred shares
Position TAKEN:
Can only answer after a review of a specific fact situation
Reasons FOR POSITION TAKEN:
Question of fact
941775
XXXXXXXXXX F. Francis
Attention: XXXXXXXXXX
August 3, 19941
Dear Sirs:
Re: Distress preferred Shares
This is in reply to your letter of July 7, 1994, wherein you requested our views with respect to the tax consequences of proposed amendments to the terms and conditions of shares issued which initially met the exception under (e)(iii) of the definition of "term preferred shares" in subsection 248(1) of the Income Tax Act ("distress preferred shares"). You enquire as to whether amendments to the terms and conditions would cause these shares to lose their status as distress preferred shares.
Whether changes made to the terms and conditions of distress preferred shares, or a related agreement in respect of the shares, would cause the shares to lose their status as "distress preferred shares" is a question of fact to be determined on a case by case basis. We do not have any general guidelines. Should you have a specific situation in mind, we would be pleased to consider it in the context of a request for an advance income tax ruling.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
Policy and Legislation Branch
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