30 November 1998 External T.I. 9829035 - TIMBER RESOURCE PROPERTY

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: Whether rights of "truck loggers" in BC are a "timber resource property" within the meaning of subsection 13(21) of the Act.

Position: Question of fact.

Reasons: We were not provided with a "timber harvesting license/evergreen contract" to review to make a determination of whether or not it is a timber resource property.

A. Seidel
XXXXXXXXXX 						(613) 957-8974
							982903
Attention:  XXXXXXXXXX 

November 30, 1998

Dear Sirs:

Re: Timber Resource Property

Your facsimile to the Vancouver Tax Services office, dated August 5, 1998, concerning “truck loggers” and the definition of “timber resource property” in subsection 13(21) of the Income Tax Act (the “Act”) has been referred to us for reply.

The situation described in your letter appears to relate to specific taxpayers and an actual fact situation. To the extent that you require confirmation of the tax consequences of proposed transactions, we bring to your attention Information Circular 70-6R3 dated December 30, 1996 issued by Revenue Canada. Confirmation with respect to proposed transactions involving specific taxpayers should be the subject of a request for an advance income tax ruling. If you wish to obtain an advance income tax ruling for particular taxpayers with respect to specific contemplated transactions, a written request for an advance income tax ruling should be submitted in accordance with the Information Circular.

Pursuant to the definition of timber resource property in subsection 13(21) of the Act, a taxpayer must have “a right or license to cut or remove timber from a limit or area in Canada.” Whether or not a taxpayer has such a right would be determined by the terms of a particular “tree farm license,” “forest license,” “timber harvesting license” or “evergreen contract,” as the case may be. Accordingly, without an actual review of the timber harvesting license/evergreen contract referred to in your facsimile, it is not possible to determine whether or not a vendor/purchaser of such a license has disposed of/acquired a timber resource property.

If you choose to request an advance income tax ruling with respect to your particular situation, please include a copy of the timber harvesting license/evergreen contract and a reference to the relevant provisions in the Forest Act (British Columbia) with your request.

These comments are provided in accordance with the guidelines set out in paragraph 22 of IC 70-6R3.

Yours truly,

for Director
Resources, Partnerships and Trusts Division
Income Tax Rulings and Interpretations Directorate
Policy and Legislation Branch
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