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 having a company becoming a public company would be an acceptable event of default for purposes of 212(1)(b)(vii).
Position TAKEN:
No comments could be given.
Reasons FOR POSITION TAKEN:
Live deal. Should come in for a ruling. No established position on this issue.
941875
XXXXXXXXXX Allan Nelson
Attention: XXXXXXXXXX
July 28, 1994
Dear Sirs:
Re: Subparagraph 212(1)(b)(vii) of the Income Tax Act
This is in reply to your facsimile dated July 21, 1994, wherein you requested a technical interpretation concerning the application of subparagraph 212(1)(b)(vii) of the Act.
In particular you have advised us that your client is currently structuring a lending arrangement which would provide that if your client's shares ever become listed on a stock exchange, such listing will constitute an event of default. You have asked us whether such an event of default would meet the exception noted in clause 212(1)(b)(vii)(C) of the Act.
As explained in Information Circular 70-6R2, it is not the Department's practice to comment on proposed transactions other than in the form of advance income tax rulings. Taxpayers seriously contemplating proposed transactions are best advised to seek a formal ruling, submitting a complete statement of facts and issues as well as copies of all relevant documents.
Presently, we do not have an established position concerning this type of arrangement and we are therefore unable to give a more detailed response to your inquiry.
Should you decide to apply for an advance income tax ruling on this matter, we would be pleased to consider your request further.
Yours truly,
for Director
Financial Industries Division
Rulings Directorate
Policy and Legislation Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1994
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1994