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 a CRTC broadcast licence is a class 14 asset or eligible capital property.
Position TAKEN:
The broadcast licence is a class 14 asset.
Reasons FOR POSITION TAKEN:
Even though there is reasonable expectation that a renewal or similar licence would be issued at the expiration of the initial term, there is no basis to assume that an existing licence is for any term but the term specified in the licence.
951423
XXXXXXXXXX L. Barrows
Attention: XXXXXXXXXX
August 23, 1995
Dear Sirs:
Re: Tax Treatment of a Radio Broadcasting Licence
This letter is in response to your letter of May 17, 1995 and your subsequent follow-up directing our attention to previous correspondence relating to the above referenced subject.
In this correspondence, we expressed the view that broadcast licences were for a limited period even though there was a reasonable expectation that a renewal or similar licence would be issued at the expiration of the initial term of the licence. This opinion was based on the fact that there is no basis to assume that an existing licence is for any term but for the term specified in the licence. In addition, there was nothing expressed or implied in the licence that would cause it to be treated for a longer period similar to the circumstances discussed in paragraphs 14 through 17 of IT-477.
Since the facts summarized in your May 17th letter appear to reflect a similar situation to that considered in our previous opinion, we are of the view that the subject licence is also for a limited period and, therefore, a class 14 asset.
While the comments provided above are of a general nature only and not binding on the Department, we trust they will be of assistance.
Yours truly,
R. Albert
for Director
Business and General Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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