2096 Ruling 9610783 - LEASING

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:

1.Is XXXXXXXXXX subject to specified leasing rules and\or leasing property rules in the Regulations?

2.Has XXXXXXXXXX acquired depreciable property?

Position:

1. No.

2. Yes

Reasons:

1.Exception found in Reg. 1100(17.3), property used in a business carried on by XXXXXXXXXX
2. XXXXXXXXXX

XXXXXXXXXX 961078

Attention: XXXXXXXXXX

XXXXXXXXXX 1996

Dear Sirs:

Re: XXXXXXXXXX

We are writing in response to your letters of XXXXXXXXXX wherein you requested an advance income tax ruling with respect to the above noted taxpayer. We also acknowledge your letters dated XXXXXXXXXX our meeting of XXXXXXXXXX and our several telephone conversations (XXXXXXXXXX).

Except as otherwise noted, all statutory references in this ruling application are references to the provisions of the Income Tax Act Canada (the "Act").

To the best of XXXXXXXXXX knowledge, none of the matters referred to in this request for advance income tax rulings is currently under objection or consideration by a District Taxation Office or Taxation Centre in connection with a return already filed.

Our understanding of the statements of facts and proposed transactions is as follows:

Facts

1.XXXXXXXXXX is a "Canadian Corporation" and a "taxable Canadian corporation" within the meaning of subsection 89(1).

XXXXXXXXXX

2. XXXXXXXXXX was incorporated in

XXXXXXXXXX

3.XXXXXXXXXX has one inactive subsidiary, XXXXXXXXXX in which it holds XXXXXXXXXX of the voting stock.

4. XXXXXXXXXX

XXXXXXXXXX

Proposed Transactions

XXXXXXXXXX

Other Information

XXXXXXXXXX

Purpose Of The Proposed Transactions

The purpose of the proposed transactions is to allow XXXXXXXXXX to concentrate its business on the area in which XXXXXXXXXX
hopes that it will be able to provide XXXXXXXXXX.

Rulings Given

Provided that the preceding statements constitute a complete and accurate disclosure of all the relevant facts and proposed transactions and the purposes of the proposed transactions, we confirm the following:

(A) XXXXXXXXXX will be regarded as "depreciable property" (Class 10) acquired by XXXXXXXXXX for the purposes of section 13 and paragraph 20(1)(a), and Part XI of the Income Tax Regulations (the "Regulations"). For greater certainty, the XXXXXXXXXX payments will not be regarded as payments made by XXXXXXXXXX for the acquisition of property.

(B) The depreciable property acquired by XXXXXXXXXX will not constitute "specified leasing property" within the meaning of subsection 1100(1.11) of the Regulations and therefore subsection 1100(1.1) of the Regulations will not be applicable thereto.

(C) The depreciable property acquired by XXXXXXXXXX will not constitute "leasing property" within the meaning of subsection 1100(17) of the Regulations and therefore subsection 1100(15) of the Regulations will not be applicable thereto.

These rulings are given subject to the general limitations and qualifications set out in Information Circular 70-6R2 dated September 28, 1990 and are binding on Revenue Canada, Taxation provided that the proposed transactions described herein are completed by XXXXXXXXXX

Our rulings are based on the Act in its present form and do not take into consideration any proposed amendments to the Act.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch