14 March 1990 Income Tax Severed Letter AC59622 - Estimate Cost of Obtaining an Advance Income Tax Ruling

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.

19(1) 5-9622

J.E. Harms

March 14, 1990

Dear Sirs: Re: Request for an estimate as to the cost of obtaining an advance income tax ruling.

This is in response to your letter of February 9, 1990 in which you requested an estimate of the cost of obtaining an advance income tax ruling in respect of certain proposed transactions.

We have enclosed for your information a copy of Information Circular 70-6R issued by Revenue Canada, taxation which sets out the guidelines under which advance income tax rulings are issued. The fee currently charged for advance income tax rulings is minimum fee of $325.00 (which must accompany the rulings request) and $65.00 for each additional hour in excess of 5 spent in considering the request and furnishing the rulings requested. We regret that it is not possible in advance to provide a meaningful estimate of the amount of time required to renew any particular request and issue the rulings requested. Issues often arise during the course of a review of a rulings request that cannot reasonably be anticipated in advance of the review.

A proposal to increase the hourly fee from $65.00 to $80.00 and to increase the amount required to accompany the rulings request from $325.00 to $400.00 is currently under consideration.

We have not reviewed your summary of the proposed transactions in detail. However, it appears form our cursory review that subsection 84.1(1) of the Income Tax Act would apply to the disposition by Mr. and Mrs. X of their shares of the operating company to their holding company. If it does, Mr. and Mrs. X, depending on the facts, might be deemed to receive taxable dividends on the disposition. You might wish to address this issue before requesting any advance rulings in respect of the proposed transactions.

If you decide to seek an advance income tax ruling or rulings in respect of the proposed transactions, please follow the procedures outlined in Information Circular 70-6R.

Yours truly,

for Director Reorganizations and Non-resident Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch

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