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.
XXXXXXXXXX 951955
Attention: XXXXXXXXXX
July 28, 1995
Dear Sirs:
Re: Interpretation Bulletin IT-315
This is in reply to your letter of July 25, 1995 wherein you requested our view regarding the application of the administrative policy described in Interpretation Bulletin IT-315 to a situation where the acquisition of shares of a corporation is wholly or partly financed by interest bearing debt which is issued by the purchaser to the vending shareholder.
In our view the policy expressed in IT-315 is applicable not only to interest on funds borrowed by a taxpayer to finance a share acquisition which is deductible under subparagraph 20(1)(c)(i) of the Income Tax Act, but also to interest on the unpaid portion of the purchase price of the shares which is deductible under subparagraph 20(1)(c)(ii).
We trust that our comments will be of assistance.
The opinions expressed in this letter are provided in accordance with the practice described in paragraph 21 of Information Circular 70-6R2 dated September 28, 1990.
Yours truly,
for Director
Reorganizations and Foreign Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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