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 1-961851
Attention XXXXXXXXXX
XXXXXXXXXX, 1996
Dear Sirs:
Re: XXXXXXXXXX
Advance Income Tax Ruling our file No. 3-960806 (the "Ruling")
We are writing in response to your letter of XXXXXXXXXX, wherein you requested certain amendments to the Ruling issued on XXXXXXXXXX, 1996. Terms defined in the Ruling to have a certain meaning have the same meaning when used in this letter.
As a result of your letter the following changes are made to the Ruling:
1.In paragraph 5, second last line, delete "XXXXXXXXXX" and replace with the word "XXXXXXXXXX".
2.In subparagraph 16(b), third line, delete the word "share" and replace with "shares".
3.In subparagraph 18(b), third line, delete the word "share" and replace with "shares".
4.In paragraph 23, second line, delete the word "XXXXXXXXXX" and replace with "XXXXXXXXXX".
5.Replace paragraphs 24 and 25 with the following:
"24.Following the wind-up of XXXXXXXXXX as described in paragraph 23 above, XXXXXXXXXX will purchase for cancellation, at fair market value, its common shares and redeem and cancel its Class A preferred shares, Class B preferred shares and Class C preferred shares held by XXXXXXXXXX in two stages:
(a) in the first stage, XXXXXXXXXX will purchase a sufficient number of common shares or part thereof which will result in a deemed dividend, pursuant to the provisions of subsection 84(3), equal to one half of XXXXXXXXXX capital dividend account immediately before that time, which XXXXXXXXXX will elect, pursuant to subsection 83(2), to have been paid from its capital dividend account; and
(b) in the second stage, XXXXXXXXXX will purchase the balance of its common shares and redeem its Class A preferred shares, Class B preferred shares and Class C preferred shares held by XXXXXXXXXX.
XXXXXXXXXX will issue to XXXXXXXXXX as consideration for the purchase of its common shares and redemption of its Class A preferred shares, Class B preferred shares and Class C preferred shares non-interest-bearing demand promissory notes having a principal amount equal to the fair market value of the common shares purchased ("XXXXXXXXXX") and equal to the redemption amount of the preferred shares redeemed ("XXXXXXXXXX").
25.Following the wind-up of XXXXXXXXXX as described in paragraph 23 above, XXXXXXXXXX will then purchase for cancellation, at fair market value, its common shares and redeem and cancel its Class A preferred shares, Class B preferred shares and Class C preferred shares held by XXXXXXXXXX in two stages:
(a)in the first stage, XXXXXXXXXX will purchase a sufficient number of common shares or part thereof which will result in a deemed dividend, pursuant to the provisions of subsection 84(3), equal to one half of XXXXXXXXXX capital dividend account immediately before that time, which XXXXXXXXXX will elect, pursuant to subsection 83(2), to have been paid from its capital dividend account; and
(b)in the second stage, XXXXXXXXXX will purchase the balance of its common shares and redeem its Class A preferred shares, Class B preferred shares and Class C preferred shares held by XXXXXXXXXX.
XXXXXXXXXX will issue to XXXXXXXXXX as consideration for the purchase of its common shares and the redemption of its Class A preferred shares, Class B preferred shares and Class C preferred shares non-interest-bearing demand promissory notes having a principal amount equal to the fair market value of the common shares purchased ("XXXXXXXXXX") and equal to the redemption amount of the preferred shares redeemed ("XXXXXXXXXX")."
6.In paragraph 26, first line, after the words "XXXXXXXXXX Note 1" add "A and XXXXXXXXXX Note 1B".
7.In paragraph 27, first line, after the words "XXXXXXXXXX Note 2" add "A and XXXXXXXXXX Note 2B".
8.In paragraph 28, first line, delete the words "The formal dissolution of XXXXXXXXXX will be delayed pending" and replace with "The dissolution of XXXXXXXXXX will not occur before".
9.Ruling H, fourth line, delete "24(b) and 25(b)" and replace with "24(a) and 25(a)".
10.Ruling I,
in subparagraph (i), after the words "XXXXXXXXXX" add "XXXXXXXXXX"; and
in subparagraph (ii), after the words "XXXXXXXXXX" add "XXXXXXXXXX".
We confirm that the above changes will not otherwise affect the rulings given in the Ruling and they will continue to be binding on the Department as indicated therein.
Yours truly,
for Director
Reorganizations and International Division
Income Tax Rulings and Interpretations
Directorate
Policy and Legislation Branch
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