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.
5-960088
XXXXXXXXXXJ. Teixeira
(613) 957-8953
Attention: XXXXXXXXXX
January 10, 1996
Dear Sirs:
Re: Subsections 159(2) & (3) of the Income Tax Act (the "Act")
This is in reply to your letter of January 4, 1996, wherein you requested our confirmation that no certificate pursuant to subsection 159(2) of the Act is required to be obtained from the Minister in the circumstances described in your letter.
The particular circumstances outlined in your letter appear to be actual transactions involving specific taxpayers. As mentioned in paragraph 21 of Information Circular 70-6R2 dated September 28, 1990, it is not the practice of this Department to provide opinions with respect to proposed transactions other than in the form of advance income tax rulings. The question of whether a certificate is to be obtained from the Minister before distributing property by a responsible person is best determined by the relevant Tax Services Office. However, we are prepared to provide you with the following general comments.
Subsection 159(2) requires that every person (other than a trustee in bankruptcy) who is an assignee, liquidator, receiver, receiver-manager, administrator, executor or any other like person must request and obtain a clearance certificate before distributing property under his control. Under subsection 159(3) the person who distributes property under his control without obtaining a certificate pursuant to subsection 159(2) is personally liable for unpaid taxes, interest and penalties to the extent of the value of the property distributed.
Whether or not a person falls within the scope of subsection 159(2) of the Act will be determined in accordance with the facts of the particular case. A person may be found to be a de facto liquidator, notwithstanding the fact that the formalities of a liquidation under corporate law have not been carried out (see Charles Malka, David Malka v. Her Majesty the Queen (F.C.T.D.) 78 DTC 6144).
The foregoing comments are not rulings and, in accordance with the practice referred to in Information Circular 70-6R2, are not binding on Revenue Canada.
Yours truly,
for Director
Reorganization and Foreign Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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