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:
Ruling requested on whether a nephew and his uncle are dealing at arm's length
Position:
Unable to rule. File closed.
Reasons:
Question of fact
961295
XXXXXXXXXX V. Plant
(613) 957-2120
Attention: XXXXXXXXXX
April 25, 1996
Dear Sirs:
Re: Sale of shares to nephews
This is in reply to your letter of March 5, 1996 wherein you requested an advance income tax ruling that a sale of shares from XXXXXXXXXX to his nephews be treated as an arm's length transaction, and therefore would not be subject to paragraph 69(1)(b) of the Income Tax Act (the "Act").
As discussed in our telephone conversation, the determination of whether two unrelated parties deal at arm's length can only be made following a review of all the facts relating to any dealings between the parties. Therefore, for the reasons set out in subparagraph 14(j) of IC 70-6R2, we regret that we are unable to provide an advance income tax ruling which confirms whether two parties will deal at arm's length.
We refer you to paragraphs 15 through 19 of Interpretation Bulletin IT-419R, which provide comments on determining whether unrelated persons are dealing with each other at arm's length.
We trust you will find these comments to be of assistance to you.
for Director
Reorganizations and International Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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