14 May 1990 Income Tax Severed Letter RRRR350 - Whether a limitation in subparagraph 149.1(l)(e.1)(ii) was intentional or was it a oversight

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.

xxxxx 5-9659
R.S. Primeau
(613) 957-2060
May 14, 1990

xxxxx

Re: Subparagraph 149.1(l)(e.1)(ii) of the Income Tax Act.

This is in reply to your letter of February 22, 1990. We apologize for the delay in our response.

Your concern is with the following words contained at the end of subparagraph 149.1(1)(e.1)(ii) of the Act:

• (other than... a share that would be a qualifying share within the meaning assigned by subsection 196(6) if the subsection were read without reference to the words "after June 30, 1983 and before 1987").

You point out that because subsection 192(6) was amended by S.C. 1986, c. 6, s. 101(3) in respect of shares issued after May 22, 1985 (other than certain grandfathered shares) in order to, amongst other things, replace the words therein

issued after June 30, 1983 and before 1987

with

issued after May 22, 1985 and before 1987,

the above-mentioned words in subparagraph 149.1(1)(e.1)(ii) produce the result of actually requiring shares issued after May 22, 1985 to have been issued after May 22, 1985 and before 1987. You have asked whether this limitation was intended by the legislators or is an error that will be corrected in the next set of technical amendments to the Act.

In our opinion, the above result was not intended by the legislators, but rather has occurred because of an oversight in their not enacting an amendment to subparagraph 149.1(1)(e.1)(ii) consequential upon the above-mentioned amendment to subsection 192(6). This matter has been brought to the attention of the Department of Finance for consideration of an appropriate technical amendment.

We trust that you will find the above satisfactory.

Yours truly,

for Director
Business and General Division
Specialty Ruling Directorate
Legislative and Intergovernmental
Affairs Branch