30 November 1996 Ruling 9703463 - GROUP LOSS UTILIZATION SCHEME

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: N/A supplementary to 963676

Position: n/a

Reasons: n/a

XXXXXXXXXX							1-970346
XXXXXXXXXX

Attention: XXXXXXXXXX

XXXXXXXXXX, 1997

Dear Sirs:

Re: XXXXXXXXXX
XXXXXXXXXX - Advance Income Tax Ruling
our file No. 3-963676 (the "Ruling")

We are writing in response to your letters of XXXXXXXXXX, wherein you requested amendments to the Proposed Transactions and Rulings described in our letter of XXXXXXXXXX, 1996.

XXXXXXXXXX

XXXXXXXXXX

Terms defined in the Ruling to have a certain meaning have the same meaning when used in this letter.

As a result of your request the following changes are made to the Ruling:

1.In paragraph 18, add the following subparagraph:

"The terms of the Holdco III Note will provide that a portion of the interest payable on the note (approximately XXXXXXXXXX%) will be paid in the taxation year the expense is incurred and the unpaid portion will be paid prior to the end of the second taxation year following the taxation year in which the expense was incurred."

2.In paragraph 20, add the following subparagraph:

"The terms of the Holdco IV Note will provide that a portion of the interest payable on the note (approximately XXXXXXXXXX%) will be paid in the taxation year the expense is incurred and the unpaid portion will be paid prior to the end of the second taxation year following the taxation year in which the expense was incurred."

3.Add the following ruling:

"R.To the extent that interest expense deductible by Holdco III and Holdco IV pursuant to Ruling A above is unpaid at the time Holdco III and Holdco IV are wound up, and the liability for the unpaid interest is assumed by XXXXXXXXXX on the windings-up of Holdco III and Holdco IV, subsection 78(2) will not apply, provided that the unpaid interest is paid by XXXXXXXXXX before what would have been the end of the second taxation year of Holdco III and Holdco IV following the taxation year in which the interest was incurred by Holdco III and Holdco IV, had Holdco III and Holdco IV not been wound up."

We confirm that the above changes and additional ruling will not 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