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.
5-950453
XXXXXXXXXXJ. Teixeira
(613) 957-8953
Attention: XXXXXXXXXX
July 19, 1995
Dear Sirs:
Re: Specified Investment Business
This is in reply to your letter of February 9, 1995 requesting a technical interpretation regarding the definition of "specified investment business" in subsection 125(7) of the Income Tax Act (the "Act").
The situation described in your letter appears to relate to an actual fact situation related either to a past transaction or to an actual proposed transaction. If the situation described relates to an actual transaction which has already been carried out, the review of such transactions falls within the responsibility of the District Office in which the taxpayer files his income tax return for the year. If the situation relates to actual proposed transactions, confirmation of the tax consequences of such proposed transactions will only be provided in response to a request for an advance tax ruling. The procedures for requesting an advance ruling are set out in Information Circular 70-6R2. Having said this, we are able to offer the following general comments on your situation.
The Department's position regarding income from an active business, a specified investment business and a personal services business is contained in Interpretation Bulletin IT-73R4. In your situation, whether there are more than five full-time employees employed in the business throughout the year should be determined on the basis described in paragraph 14 of IT-73R4. Where the business is carried out by corporations in a joint venture or other form of co-ownership, to determine whether more than 5 full-time employees are employed by the corporations, the total number of full-time employees who work jointly for all the co-owners must be allocated to each co-owner in accordance with the co-owner's percentage interest in the property.
The foregoing comments are not rulings and, in accordance with the guidelines set out in Information Circular 70-6R2 dated September 28, 1990, are not binding on the Department.
Yours truly,
for Director
Reorganizations and Foreign Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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