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: new facts
Position: supplemental issued
Reasons: no impact on rulings given
XXXXXXXXXX 962148
XXXXXXXXXX
Attention: XXXXXXXXXX
XXXXXXXXXX, 1996
Dear Sirs:
Re: XXXXXXXXXX
We are writing in response to your letter dated XXXXXXXXXX, and our telephone conversation of XXXXXXXXXX wherein you requested certain changes to advance income tax ruling 961624 dated XXXXXXXXXX, 1996 (the "Ruling") concerning the above mentioned taxpayer.
As a result of your letter the following changes are made to the Ruling.
1.Paragraph 3 is amended to add immediately before the last sentence, the following sentences, "XXXXXXXXXX has made certain advances (the "Advances") to XXXXXXXXXX to permit XXXXXXXXXX to effect certain capital improvements to its assets. The outstanding balance is approximately $XXXXXXXXXX and bears interest at a reasonable commercial rate."
2.Line 1 of paragraph 9 is amended to delete the words, "XXXXXXXXXX".
3.Line 1 of the first sentence in paragraph 10 is amended to add after the word "XXXXXXXXXX", the words, "and the Advances".
4.Paragraphs 11, 12, 13, 14 and 15 are renumbered 12, 13, 14, 15 and 16 respectively.
5.New paragraph 11 is added as follows, "XXXXXXXXXX is entitled to certain fees from XXXXXXXXXX in respect of guarantees given by the Province of XXXXXXXXXX in respect of XXXXXXXXXX indebtedness. The aggregate amount of such fees is approximately XXXXXXXXXX proposes selling its entitlement to such fees to Newco for an amount equal to the present value thereof. Any amount received by XXXXXXXXXX in consideration for such a transfer would be included in XXXXXXXXXX income and would be considered as a cost of the entitlement to receive such amounts to Newco."
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 and that the Ruling is applicable to Newco as well as XXXXXXXXXX.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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