17 October 1996 External T.I. 9624695 - EXTENDED DEFINITION OF CHILD

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)Would a granddaughter-in-law be considered a child for purposes of subsection 70(9) and 70(9.2)
2)Would she still be considered a child if grandson predeceases taxpayer

Position:

1)Yes
2)No as she would no longer be a spouse of grandson and would no longer meet the extended definition of child pursuant to 252(4)

Reasons:

XXXXXXXXXX							5-962469

Attention: XXXXXXXXXX

October 17, 1996

Dear Sirs:

Re: Technical Interpretation of paragraph 252(1)(e) and subsections 70(9) and 70(9.2) of the Income Tax Act

This is in reply to your letter of July 9, 1996 in which you request a technical interpretation regarding the transfer of farmland under subsection 70(9) of the Income Tax Act (the "Act") and/or shares in a family farm corporation under subsection 70(9.2) of the Act.

The situation described in your letter is an actual fact situation and written confirmation of the tax implications inherent in proposed transactions are given by this Directorate only where the transactions are the subject of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R2. Where a completed transaction is involved, the enquiry should be addressed to your local District Tax Services Office. Consequently, we can only offer the following general comments.

Pursuant to paragraph 252(1)(e) of the Act, the meaning of "child" is extended to include a spouse of a child of a taxpayer and for the purposes of section 70 of the Act, subsection 70(10) expands the meaning of "child" to include a grandchild.

Accordingly, for the purposes of section 70, it is our view that a granddaughter-in-law would be considered a child of a taxpayer. However, as noted in paragraph 8 of Interpretation Bulletin IT-359R2, for the purposes of the rollover provisions described in section 70, the child relationship must exist at the time of death. Accordingly, if the grandson predeceases the taxpayer, the granddaughter-in-law would not be considered a child of the taxpayer.

We trust our comments will be of assistance to you.

Yours truly,

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