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:
Amendment to Ruling 963802
Position:
1.Amount to be borrowed increased to $XXXXXXXXXX - this amount may change but this is the amount currently estimated.
2.Slight change to wording in ruling.
3.Time extension to XXXXXXXXXX
Reasons:
N/A
XXXXXXXXXX 964130
XXXXXXXXXX
Attention: XXXXXXXXXX
XXXXXXXXXX, 1997
Dear Sirs:
Re: XXXXXXXXXX
We are writing further to our (XXXXXXXXXX) telephone conversation wherein we had discussed certain aspects of the advance income tax ruling (our file number 963802) which was dated XXXXXXXXXX, 1996 and issued to your firm on behalf of XXXXXXXXXX We also acknowledge your facsimile transmission of XXXXXXXXXX in which you advised that the correct corporate account number for XXXXXXXXXX.
As discussed in our telephone conversation, Paragraph 5 of the Proposed Transactions is amended as follows:
XXXXXXXXXX will borrow an amount currently estimated to be approximately $XXXXXXXXXX from XXXXXXXXXX pursuant to a subordinated debenture (the "Debenture"). The Debenture will have a term to maturity of XXXXXXXXXX years and the outstanding principal amount will be repayable on XXXXXXXXXX
Also the original advance income tax ruling is replaced with the following:
Provided that the funds borrowed by XXXXXXXXXX under the Debenture are used by XXXXXXXXXX for the purpose of earning income from a business or property (other than to acquire property the income from which would be exempt or to acquire a life insurance policy) in a year, the amount paid or payable under the Debenture by XXXXXXXXXX (other than an amount on account of the principal amount thereof) in respect of that year (depending upon the method regularly followed by XXXXXXXXXX in computing its income) or a reasonable amount in respect thereof, whichever is lesser, will, subject to the provisions of subsection 18(4) of the Act, be deductible pursuant to paragraph 20(1)(c) of the Act by XXXXXXXXXX in computing its income for income tax purposes in respect of the year.
Also, as noted in the original income tax ruling, this ruling is provided subject to the limitations and qualifications set out in Information Circular 70-6R3 issued by Revenue Canada on December 30, 1996 and is binding upon the Department provided that the proposed transactions are completed by XXXXXXXXXX This ruling is based on the Act and the Income Tax Regulations in their present form and does not take into account the effects of any proposed amendments thereto.
Yours truly,
for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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