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.
Principal Issues: Various butterfly issues were considered
Position: favourable rulings were given
Reasons: Complies with legislation
XXXXXXXXXX 2008-030437
XXXXXXXXXX , 2009
Dear XXXXXXXXXX :
Re: XXXXXXXXXX
Advance Income Tax Ruling
This is in reply to your letter of XXXXXXXXXX , as amended by your letters of XXXXXXXXXX , in which you requested an advance income tax ruling on behalf of the above-noted taxpayers. We also acknowledge the information provided during our various telephone conversations (XXXXXXXXXX ) and in your email messages.
To the best of your knowledge, and that of the taxpayers involved, none of the issues involved in this ruling request is
(i) in an earlier return of any of the taxpayers or a related person;
(ii) being considered by a tax services office or taxation centre in connection with a previously filed tax return of any of the taxpayers or a related person;
(iii) under objection by any of the taxpayers or a related person;
(iv) before the courts or, if a judgment has been issued, the time limit for appeal to a higher court has expired; or
(vi) the subject of a ruling previously issued to a taxpayer involved or a related person.
To the best of your knowledge and that of the taxpayers involved, the Proposed Transactions will not impact the ability of the taxpayers involved to pay their existing tax liabilities.
The tax account numbers, Tax Services Offices and the Tax Centres of the parties involved in the Proposed Transactions are:
Name Tax Account Tax Service Office/
Number /SIN Taxation Centre
XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX
DEFINITIONS
In this letter, unless otherwise indicated, all statutory references are to the Act and the following terms have the meanings specified:
(a) "A Holdco" means XXXXXXXXXX as described in paragraphs 4 to 10 below;
(b) "A Sub Holdco" means XXXXXXXXXX as described in paragraphs 11 to 15 below;
(c) "A Co" means XXXXXXXXXX as described in paragraph 49 below;
(d) "Act" means the Income Tax Act (Canada), R.S.C. 1985 (5th supp.) c. 1, as amended;
(e) "adjusted cost base" has the meaning assigned by section 54;
(f) "agreed amount" in respect of a property means the amount that the transferor and transferee of the property have agreed upon in an election under subsection 85(1);
(g) "arm's length" has the meaning assigned by section 251;
(h) "B Holdco" means XXXXXXXXXX as described in paragraphs 16 to 20 below;
(i) "B NomineeCo" means XXXXXXXXXX , a special purpose nominee corporation recently incorporated as described in paragraph 53 below;
(j) "B Opco GRIP Purchase Note" has the meaning assigned in paragraph 70 below;
(k) "B Opco Purchase Note" has the meaning assigned in paragraph 70 below;
(l) "B Sub Holdco" means XXXXXXXXXX as described in paragraphs 21 to 25 below;
(m) "B Sub Holdco Redemption Note" has the meaning assigned in paragraph 71 below;
(n) "B Sub Holdco Special Shares" has the meaning assigned in paragraph 55 below;
(o) "B Sub Holdco Special Share Redemption Amount" has the meaning assigned in paragraph 56 below;
(p) "Canadian-controlled private corporation" has the meaning assigned by subsection 125(7);
(q) "capital dividend" has the meaning assigned by subsection 83(2);
(r) "capital dividend account" has the meaning assigned by subsection 89(1);
(s) "capital property" has the meaning assigned by section 54;
(t) "Child A1" means XXXXXXXXXX of Mr. A as defined below, who is one of the shareholders of A Holdco;
(u) "Child A2" means XXXXXXXXXX of Mr. A as defined below, who is one of the shareholders of A Holdco;
(v) "Child A3" means XXXXXXXXXX of Mr. A as defined below, who is one of the shareholders of A Holdco;
(w) "connected" has the meaning assigned by subsection 186(4);
(x) "Corporations Act 1" means the Business Corporations Act XXXXXXXXXX ;
(y) "Corporations Act 2" means the Business Corporations Act XXXXXXXXXX ;
(z) "depreciable property" has the meaning assigned by subsection 13(21);
(aa) "distribution" has the meaning assigned by subsection 55(1);
(bb) "dividend refund" has the meaning assigned by subsection 129(1);
(cc) "dividend rental arrangement" has the meaning assigned by subsection 248(1);
(dd) "eligible capital property" has the meaning assigned by section 54;
(ee) "eligible property" has the meaning assigned by subsection 85(1.1);
(ff) "excepted dividend" has the meaning assigned by section 187.1;
(gg) "excluded dividend" has the meaning assigned by subsection 191(1);
(hh) "fair market value" means the highest price available in an open and unrestricted market between informed prudent parties acting at arm's length and under no compulsion to act, expressed in terms of cash;
(ii) "financial intermediary corporation" has the meaning assigned by subsection 191(1);
(jj) "forgiven amount" has the meaning assigned by subsection 80(1) or 80.01(1);
(kk) "general rate income pool" ("GRIP") has the meaning assigned by subsection 89(1);
(ll) "guarantee agreement" has the meaning assigned by subsection 112(2.2);
(mm) "Mr. A" means XXXXXXXXXX as described in paragraphs 1 and 3 below;
(nn) "Mr. A Family Trust" means XXXXXXXXXX which is one of the shareholders of A Holdco as defined above;
(oo) "Mr. B" means XXXXXXXXXX as described in paragraphs 2 and 3 below;
(pp) "Opco" means XXXXXXXXXX as described in paragraphs 26 to 36 below;
(qq) "Opco Common Shares" means the authorized common shares of Opco as described in paragraph 27 below;
(rr) "Opco Common Share Purchase Amount" has the meaning assigned in paragraph 70 below;
(ss) "Opco GRIP Common Share Purchase Amount" has the meaning assigned in paragraph 70 below;
(tt) "paid-up capital" has the meaning assigned by subsection 89(1);
(uu) "Prepaid Rent" has the meaning assigned in paragraph 32 below;
(vv) "principal amount" has the meaning assigned by subsection 248(1);
(ww) "Proposed Transactions" means the proposed transactions described in paragraphs 55 to 72 below;
(xx) "refundable dividend tax on hand" has the meaning assigned by subsection 129(3);
(yy) "Regulations" means the Income Tax Regulations;
(zz) "Related Party Loans" has the meaning assigned in paragraph 34 below;
(aaa) "related persons" has the meaning assigned by section 251;
(bbb) XXXXXXXXXX ;
(ccc) "series of transactions or events" includes the transactions or events referred to in subsection 248(10);
(ddd) "significant influence" has the meaning assigned by section 3051 of the CICA Handbook;
(eee) "specified financial institution" has the meaning assigned by subsection 248(1);
(fff) "specified investment business" has the meaning assigned by subsection 125(7);
(ggg) "stated capital account" has the meaning assigned by section XXXXXXXXXX of Corporations Act 1 and section XXXXXXXXXX of Corporations Act 2;
(hhh) "Subco A" means XXXXXXXXXX , a taxable Canadian corporation recently incorporated as described in paragraph 51 below;
(iii) "SubcoB" means XXXXXXXXXX , a taxable Canadian corporation recently incorporated as described in paragraph 52 below;
(jjj) "Subco1" means XXXXXXXXXX as described in paragraphs 37 to 40 below;
(kkk) "Subco1 Common Shares" has the meaning assigned in paragraph 39 below;
(lll) "Subco2" means XXXXXXXXXX as described in paragraphs 41 to 44 below;
(mmm) "Subco2 Common Shares" has the meaning assigned in paragraph 43 below;
(nnn) "subsidiary wholly-owned corporation" has the meaning assigned by subsection 248(1);
(ooo) "substantial interest" has the meaning assigned by subsection 191(2);
(ppp) "taxable Canadian corporation" has the meaning assigned by subsection 89(1);
(qqq) "taxable dividend" has the meaning assigned by subsection 89(1);
(rrr) "Trust" means XXXXXXXXXX as described in paragraphs 45 to 48 below;
(sss) "Trustee" means XXXXXXXXXX as described in paragraph 45 below; and
(ttt) "undepreciated capital cost" has the meaning assigned by subsection 13(21).
FACTS
Our understanding of the relevant facts, Proposed Transactions and purpose of the Proposed Transactions is as follows:
Individuals
1. Mr. A is an individual resident in Canada for purposes of the Act.
2. Mr. B is an individual resident in Canada for purposes of the Act.
3. Mr. A and Mr. B are not related persons for purposes of the Act.
A Holdco
4. A Holdco is a Canadian-controlled private corporation and taxable Canadian corporation and has a taxation year ending on XXXXXXXXXX . A Holdco was incorporated under the Corporations Act 2 on XXXXXXXXXX .
5. A Holdco has authorized share capital consisting of an unlimited number of common shares, Class A preferred shares, Class B preferred shares, and Class C voting preferred shares.
6. The common shares of A Holdco have no par value and are non-voting and participating.
7. The Class A preferred shares and Class B preferred shares of A Holdco XXXXXXXXXX are non-voting and entitled to non-cumulative annual dividends not exceeding XXXXXXXXXX % on the amounts paid up on the shares.
8. The Class C preferred shares are voting and not entitled to any dividends.
9. The issued and outstanding share capital of A Holdco consists of XXXXXXXXXX non-voting common shares, XXXXXXXXXX Class A preferred shares, XXXXXXXXXX Class B preferred shares and XXXXXXXXXX Class C voting preferred shares owned as follows:
Shareholder Number Class
Mr. A XXXXXXXXXX Class A non-voting preferred
XXXXXXXXXX Class B non-voting preferred
XXXXXXXXXX Class C voting preferred
Child A1 XXXXXXXXXX Class B non-voting preferred
Child A2 XXXXXXXXXX Class B non-voting preferred
Child A3 XXXXXXXXXX Class B non-voting preferred
Mr. A Family Trust XXXXXXXXXX Non-voting common
10. A Holdco is an investment holding company. A Holdco owns XXXXXXXXXX % of the shares in A Sub Holdco as described below, marketable securities and revenue producing real properties.
A Sub Holdco
11. A Sub Holdco is a Canadian-controlled private corporation and taxable Canadian corporation and has a taxation year ending on XXXXXXXXXX . A Sub Holdco was incorporated under the Corporations Act 2 on XXXXXXXXXX .
12. A Sub Holdco has authorized share capital consisting of an unlimited number of common shares.
13. The common shares of A Sub Holdco are participating and voting.
14. The issued and outstanding share capital of A Sub Holdco consists of XXXXXXXXXX common shares all of which are owned by A Holdco.
15. A Sub Holdco's only activity is the ownership and holding of shares of Opco as described below.
B Holdco
16. B Holdco is a Canadian-controlled private corporation and taxable Canadian corporation and has a taxation year ending on XXXXXXXXXX . B Holdco was incorporated under the Corporations Act 2 on XXXXXXXXXX .
17. B Holdco has authorized share capital consisting of an unlimited number of common shares without par value.
18. The common shares of B Holdco are participating and voting.
19. The issued and outstanding share capital of B Holdco consists of XXXXXXXXXX common shares, all of which are owned by Mr. B.
20. B Holdco is XXXXXXXXXX and owns XXXXXXXXXX % of the shares in B Sub Holdco.
B Sub Holdco
21. B Sub Holdco is a Canadian-controlled private corporation and taxable Canadian corporation and has a taxation year ending on XXXXXXXXXX . B Sub Holdco was incorporated under the Corporations Act 1 on XXXXXXXXXX .
22. B Sub Holdco has authorized share capital consisting of an unlimited number of common shares.
23. The common shares of B Sub Holdco are participating and voting.
24. The issued and outstanding share capital of B Sub Holdco consists of XXXXXXXXXX common shares, all of which are owned by B Holdco. Consequently, B Sub Holdco is a subsidiary wholly-owned corporation of B Holdco.
25. B Sub Holdco's only activity is the ownership and holding of shares of Opco as described below. It is not expected that B Sub Holdco will have any refundable dividend tax on hand at the end of the taxation year in which the Proposed Transactions are implemented.
Opco
26. Opco is a Canadian-controlled private corporation and taxable Canadian corporation and has a taxation year ending on XXXXXXXXXX . Opco was formed as a result of an amalgamation under the Corporations Act 2 on XXXXXXXXXX .
27. Opco has authorized share capital consisting of an unlimited number of preference shares and an unlimited number of common shares (the "Opco Common Shares").
28. The Opco Common Shares are participating and voting.
29. The issued and outstanding share capital of Opco consists of XXXXXXXXXX Opco Common Shares, XXXXXXXXXX .
30. A Sub Holdco and B Sub Holdco each acquired their Opco Common Shares from its parent company, A Holdco and B Holdco, respectively, on XXXXXXXXXX for share consideration consisting of XXXXXXXXXX common shares issued from their respective treasury stocks. The transfers of the Opco Common Shares were completed pursuant to subsection 85(1) of Act.
31. Opco is in the business of XXXXXXXXXX . Opco employs more than five full-time employees in carrying on its business of XXXXXXXXXX .
32. Opco's assets include cash and cash equivalents, tenant receivables, income taxes receivable (if any), prepaid expenses, deposits, deferred expenses, revenue producing commercial rental properties, other capital assets, the Subco1 Common Shares, the Subco2 Common Shares as described below, a 98% unitholder interest in the Trust and non-interest bearing loans receivable with no fixed term of repayment due from the Trust, A Holdco and B Holdco. Included in the prepaid expenses is an amount of prepaid rent relating to a long-term lease of land on which Opco has constructed a building (the "Prepaid Rent").
33. The commercial rental properties consist of land, buildings, parking areas and fencing. The buildings are depreciable property and are included in separate classes of Class 1 and 3 of Schedule II to the Regulations pursuant to paragraph 1101(1ac) of the Regulations, XXXXXXXXXX . The parking areas and fencing are depreciable property included in Class 17 and Class 6, respectively, of Schedule II to the Regulations.
34. Opco's liabilities include bank indebtedness, mortgages payable, accounts payable and accrued liabilities, tenant deposits, bonuses payable, income taxes payable, if any, future income taxes and loans payable owing to Mr. A, Mr. B, A Holdco, B Holdco, the Trust and individuals related to Mr. B (the "Related Party Loans"). Opco's bank indebtedness includes amounts that have been borrowed under Opco's operating demand loan facilities. XXXXXXXXXX .
35. All of the Related Party Loans have no specific terms of repayment, except for the amount due to the Trust which has a blended monthly payment term.
36. Opco's refundable dividend tax on hand as of XXXXXXXXXX is expected to be a nominal amount.
Subco1
37. Subco1 was incorporated under the Corporations Act 2 on XXXXXXXXXX . Subco1 has authorized share capital consisting of an unlimited number of common shares.
38. The common shares of Subco1 are participating and voting.
39. The issued and outstanding share capital of Subco1 consists of XXXXXXXXXX common shares (the "Subco1 Common Shares"), all of which are owned by Opco.
The Subco1 Common Shares were formerly owned by Mr. A, who transferred the shares to A Holdco on XXXXXXXXXX for XXXXXXXXXX Class A non-voting preferred shares of A Holdco. A Holdco transferred the Subco1 Common Shares to Opco on XXXXXXXXXX . Both transfers were completed pursuant to subsection 85(1) of the Act.
40. Subco1's only activity is the holding of a XXXXXXXXXX % unitholder interest in the Trust and a XXXXXXXXXX % share ownership in the Trustee as described below in paragraph 45.
Subco2
41. Subco2 was incorporated under the Corporations Act 2 on XXXXXXXXXX . Subco2 has authorized share capital consisting of an unlimited number of common shares.
42. The common shares of Subco2 are participating and voting.
43. The issued and outstanding share capital of Subco2 consists of XXXXXXXXXX common shares (the "Subco2 Common Shares"), all of which are owned by Opco.
The Subco2 Common Shares were formerly owned by Mr. B, who transferred the shares to B Holdco on XXXXXXXXXX for XXXXXXXXXX common shares of B Holdco. B Holdco transferred the Subco2 Common Shares to Opco on XXXXXXXXXX . Both transfers were completed pursuant to subsection 85(1) of the Act.
44. Subco2's only activity is the holding of a XXXXXXXXXX % unitholder interest in the Trust and a XXXXXXXXXX % share ownership in the Trustee as described below in paragraph 45.
Trust
45. The Trust was settled on XXXXXXXXXX by the Trustee, a taxable Canadian corporation jointly owned by Subco1 and Subco2. The beneficiary units of the Trust are held XXXXXXXXXX % by Opco XXXXXXXXXX .
46. The Trust was established for the principal purpose of acquiring and operating a revenue producing property for the benefit of the unitholders. The assets owned by the Trust include cash and cash equivalents, tenant receivables, deferred expenses, prepaid expenses and deposits, a revenue producing property and an interest bearing loan receivable due from Opco as described in paragraphs 34 and 35 above.
47. The revenue producing property consists of land and building. The building is a depreciable property included in Class 1 of Schedule II to the Regulations. Pursuant to a management agreement, the revenue producing property is managed by Opco for a management fee determined based on "cost plus".
48. The Trust's liabilities include mortgages payable, accounts payable and accrued liabilities, and a non-interest bearing loan payable due to Opco as described in paragraph 32 above.
A Co
49. A Co is a taxable Canadian corporation owned 100% by Mr. A. XXXXXXXXXX .
XXXXXXXXXX
50. XXXXXXXXXX
XXXXXXXXXX
51. SubcoA was incorporated under the Corporations Act 2 on XXXXXXXXXX for the purpose of re-organizing certain properties owned by Opco as described in paragraph 58 below. SubcoA has authorized share capital consisting of an unlimited number of common shares, XXXXXXXXXX .
52. SubcoB was incorporated under the Corporations Act 2 on XXXXXXXXXX for the purpose of re-organizing certain properties owned by Opco as described in paragraph 58 below. SubcoB has authorized share capital consisting of an unlimited number of common shares, XXXXXXXXXX .
53. B NomineeCo was incorporated under the Corporations Act 2 on XXXXXXXXXX for the purpose of holding the registered legal title to certain real property as described in paragraph 64 below, in respect of certain real property to be transferred to B Sub Holdco as described in paragraph 67 below. B NomineeCo has authorized share capital consisting of an unlimited number of common shares. On its incorporation, B Sub Holdco subscribed for common shares of B NomineeCo for nominal consideration.
54. XXXXXXXXXX
PROPOSED TRANSACTIONS
The following transactions will generally be implemented in the order presented below unless otherwise noted.
B Sub Holdco Articles of Amendment
55. B Sub Holdco will file articles of amendment to create a new class of shares being the "B Sub Holdco Special Shares".
56. B Sub Holdco will be authorized to issue an unlimited number of the B Sub Holdco Special Shares each of which will be voting, redeemable and retractable at an amount (the "B Sub Holdco Special Share Redemption Amount") equal to the result obtained when the aggregate fair market value of the property transferred to B Sub Holdco on the date of issuance as consideration for the B Sub Holdco Special Shares less the aggregate amount of the non-share consideration, if any, paid, assumed or delivered by B Sub Holdco for the acquisition of such property is divided by the number of B Sub Holdco Special Shares issued as consideration therefor.
57. An amount will be specified with respect to the B Sub Holdco Special Shares for the purposes of subsection 191(4) to be designated by a resolution of directors of B Sub Holdco at the time of their issue and will not exceed the fair market value of the consideration received for their issue. The amount specified will not be described by reference to a formula or subject to change thereafter.
Opco Articles of Amendment
57.1 Opco will file articles of amendment to create a new class of common shares (hereinafter referred to as the "Opco New Common Shares") which will have substantially the same rights and entitlements as the Opco Common Shares, including the same number of votes per share. Opco will be authorized to issue an unlimited number of Opco New Common Shares.
Reorganization of Property Owned by Opco
58. Prior to the distribution by Opco of a proportionate share of its property to B Sub Holdco as described in paragraph 67 below, Opco will transfer certain properties to each of SubcoA and SubcoB as described below.
(a) The properties to be transferred to SubcoA will consist of:
(i) The Subco1 Common Shares and any amount receivable from Subco1;
(ii) The Subco2 Common Shares and any amount receivable from Subco2;
(iii) The XXXXXXXXXX % unitholder interest in the Trust and the non-interest bearing loan receivable due from the Trust as described in paragraph 32 above. The registered legal title to the revenue producing owned by the Trust will be transferred to SubcoA.
(iv) XXXXXXXXXX joint venture investments in each of which Opco owns a XXXXXXXXXX % interest and XXXXXXXXXX % of the shares of XXXXXXXXXX nominee corporations each of which holds the registered legal title of the respective joint venture's revenue producing commercial rental property as described in this subparagraph. Each of the joint venture's assets includes cash and cash equivalents, tenant receivables and a revenue producing commercial rental property. The commercial rental property held by each of the joint ventures consists of land and building. Both buildings are depreciable properties and included in separate classes of Class 1 of Schedule II to the Regulations pursuant to paragraph 1101(1ac) of the Regulations.
(v) Any amounts receivable from the joint ventures described in (iv) above.
(vi) Intangible property or goodwill, if any, associated with the right to use the name of "Opco", including any domain names.
(b) As consideration for these property transfers, SubcoA will:
(i) assume certain undertakings of Opco, if any, to which paragraph 12(1)(a) is applicable;
(ii) assume other liablities of Opco relating to the transferred properties, including the loan payable to the Trust referred to in paragraphs 34 and 35 and any liabilities payable to the XXXXXXXXXX joint ventures described in (iv) above; and
(iii) issue common shares of its capital stock to Opco, having a fair market value equal to the aggregate fair market value of the properties transferred as described in (a)(i) to (vi) above less the amount of liabilities assumed by Subco as described in (i) and (ii).
XXXXXXXXXX
Due to the transfer of its XXXXXXXXXX % unitholder interest in the Trust to SubcoA, the management agreement between Opco and the Trust described in paragraph 47 will be terminated and a new management agreement will be entered into between the Trust and SubcoA.
(c) The properties to be transferred to SubcoB will consist of a revenue producing property and related assets, including amounts receivable, prepaid expenses and deposits, as the case may be. The revenue producing property is a commercial rental property consisting of land and building. The building is depreciable property and is included in a separate Class 1 of Schedule II to the Regulations pursuant to paragraph 1101(1ac) of the Regulations. The registered legal title to the revenue producing property will also be conveyed by Opco to SubcoB.
(d) As consideration for these property transfers, SubcoB will:
(i) assume certain undertakings of Opco, if any, to which paragraph 12(1)(a) is applicable;
(ii) assume other liablities of Opco relating to the transferred properties; and
(iii) issue common shares of its capital stock to Opco, having a fair market value equal to the aggregate fair market value of the properties transferred as described in (c) above less the amount of liabilities assumed by SubcoB as described in (i) and (ii).
59. Opco and each of SubcoA and SubcoB will elect jointly, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer of all eligible property that is transferred to the particular transferee as described in paragraph 58 above so that the agreed amount in each joint election will not be less than the least of:
(i) the amounts specified in subparagraphs 85(1)(d)(i), (ii) and (iii), in the case of eligible capital property;
(ii) the amounts specified in subparagraphs 85(1)(e)(i), (ii) and (iii), in the case of depreciable property of a prescribed class; and
(iii) the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii), in the case of property described in paragraph 85(1)(c.1).
In each case, the agreed amount will not exceed the fair market value of the property transferred, nor will it be less than the amount permitted under paragraph 85(1)(b).
In respect of the consideration paid by Opco to SubcoA and SubcoB for the assumption of Opco's undertakings, if any, as described in subparagraphs 58(b)(i) and (d)(i) above, Opco and each of SubcoA and SubcoB will jointly elect under subsection 20(24), in the manner and within the time referred to in subsection 20(25).
60. Each of SubcoA and SubcoB will add to the stated capital account maintained for its common shares an amount not to exceed the amount by which the aggregate agreed amounts of the properties so transferred exceeds the total amount of liabilities to be assumed by SubcoA or SubcoB, as the case may be.
XXXXXXXXXX
61. XXXXXXXXXX
62. XXXXXXXXXX
Capital Dividend
63. The directors of Opco will pass a resolution to increase the stated capital (and consequently the paid-up capital) of the issued and outstanding common shares of Opco by an amount that will not exceed the amount of Opco's CDA immediately before such paid-up capital increase. Opco will file an election, pursuant to subsection 83(2), in prescribed manner and prescribed form, in respect of the entire amount of the dividend deemed to be paid by Opco to the holders of its common shares under subsection 84(1) as a result of this paid-up capital increase.
Exchange of Opco Common Share for Opco New Common Shares
63.1 A Sub Holdco will exchange all of its Opco Common Shares for an equivalent number of Opco New Common Shares, which were created as described in paragraph 57.1 above. As a result, the aggregate stated capital of the Opco New Common Shares will be equal to the aggregate stated capital of the Opco Common Shares so exchanged by A Sub Holdco. This share exchange will be carried out such that the Opco Common Shares owned by A Sub Holdco will be cancelled for purposes of the Corporations Act 2 on the exchange.
63.2 The directors of Opco will pass a resolution to increase the stated capital (and consequently the paid-up capital) of the issued and outstanding Opco New Common Shares held by A Sub Holdco by an amount equal to XXXXXXXXXX times Opco's refundable dividend tax on hand at the end of the year that will end immediately before the acquisition of control as described in Ruling J below. Opco will be deemed to have paid a taxable dividend to A Sub Holdco under subsection 84(1) as a result of this paid-up capital increase.
64. Prior to the transfer of properties described in paragraph 67 below, Opco will register legal title to certain of the properties that will be transferred to B Sub Holdco in the name of B NomineeCo, XXXXXXXXXX .
Types of Property Analysis
65. Subsequent to Opco's transfer of property to SubcoA and SubcoB as described in paragraph 58 above and immediately before the transfers of property described in paragraph 67 below, Opco will not own any shares in any other corporation (other than the shares in SubcoA, SubcoB and any nominee corporation that will not be the beneficial owner of any property) or interests in partnerships or trusts over which it has the ability to exercise significant influence. As described in subparagraph 67 below, Opco will transfer a proportionate number of shares of each of SubcoA and SubcoB to B Sub Holdco. Therefore, immediately before the transfers of property described in paragraph 67 below, the property owned by Opco, other than its shares of SubcoA and SubcoB, will be classified into three types of property for the purposes of the definition of "distribution" in subsection 55(1), as follows:
(a) cash or near-cash property, consisting of all of the current assets of Opco, including any cash and cash equivalents, tenant receivables, prepaid expenses (other than the Prepaid Rent), deposits, and any income tax receivable;
(b) business property, consisting of all of the assets of Opco (other than cash or near-cash property and the shares of SubcoA and SubcoB) any income from which would, for purposes of the Act, be income from a business (other than a specified investment business); and
(c) investment property, consisting of all of the assets of Opco (other than cash or near-cash property and the shares of SubcoA and SubcoB) any income from which would, for purposes of the Act, be income from property or a specified investment business.
For greater certainty, for purposes of determining the net fair market value of the property of Opco as described in this paragraph and paragraph 66 below, the following principles will apply:
(d) any tax accounts, such as any non-capital loss, net capital loss, the balance of any refundable dividend tax on hand or capital dividend account of Opco, will not be considered property for purposes of the Proposed Transactions described herein;
(e) for greater certainty deferred expenses, which were expenditures deferred and amortized for accounting purposes but fully deducted for tax purposes, will not be considered property for purposes of the Proposed Transactions described herein;
(f) for greater certainty, for the purposes of the Proposed Transactions, the loans receivable from A Holdco and B Holdco, which have no specified terms of repayment and are described in paragraph 32 above, will be considered cash or near-cash property; while the revenue producing properties of Opco and the Prepaid Rent will be considered business property;
(g) no amount will be considered a liability unless it represents a true legal liability capable of quantification. For greater certainty, the amount of any deferred income taxes recorded in the financial statements of Opco will not be considered a liability because such amount does not represent a legal obligation of Opco;
(h) the Related Party Loans, which have no specified terms of repayment, will be considered current liabilities of Opco; and
(i) for greater certainty, the current liabilities of Opco will include any amounts normally classified as current liabilities pursuant to section 1510 of the CICA Handbook.
As a result of the classification of Opco's property as described in this paragraph, it is expected that Opco will only have cash or near-cash property and business property and will not have any investment property.
66. In determining the net fair market value of each type of property of Opco immediately before the transfers described in paragraph 67 below, the liabilities of Opco will be allocated to, and will be deducted in the calculation of the net fair market value of each such type of property of Opco, in the following manner:
(a) current liabilities of Opco will be allocated to the cash or near-cash property (including any cash, tenant receivables and prepaid expenses, other than the Prepaid Rent) of Opco in the proportion that the fair market value of each such property is of the fair market value of all cash or near-cash property of Opco. The allocation of current liabilities as described herein shall not exceed the fair market value of all the cash or near-cash property of Opco;
(b) following the allocation of current liabilities to each cash or near-cash property in (a) above, the remaining net fair market value, if any, of any amounts receivable and prepaid expenses of Opco (other than the Prepaid Rent) will be reclassified as business property and excluded from cash or near-cash property, to the extent that such property will be collected or used in the ordinary course of the business to which such property relates;
(c) liabilities of Opco, other than current liabilities, that relate to a particular property will be allocated to the particular property (and to the type of property to which such property belongs) to the extent of its fair market value. The liabilities that pertain to a type of property but not to a particular property will be allocated to that type, but not in excess of the net fair market value of such type after the allocation of liabilities to a particular property as described herein; and
(d) the excess, if any, of liabilities remaining after the allocations described in subparagraphs (a) and (c) above are made will be allocated to the cash or near-cash property and business property of Opco, on the basis of the relative net fair market value of each type of property prior to the allocation of such excess.
Following the allocation of liabilities as described herein, it is not expected that Opco will have any cash or near cash property (determined on a net fair market value basis) as Opco's current liabilities are expected to exceed its current assets. Consequently, Opco should only have business property and the shares of SubcoA and SubcoB for purposes of the distribution described in paragraph 67.
Distribution
67. Immediately following the determination of the net fair market value of its types of property as described in paragraphs 65 and 66, Opco will transfer to B Sub Holdco a proportionate share of the following properties:
(a) any cash or near cash property of Opco;
(b) business property of Opco, including revenue producing commercial rental properties and related assets; and
(c) common shares of each of SubcoA and SubcoB
such that, immediately after such transfers, the net fair market value, calculated as described in paragraphs 65 and 66 above, of each such type of property of Opco transferred to B Sub Holdco will approximate that proportion of the net fair market value of that type of property of Opco, determined immediately before the transfer described in this paragraph, that:
(e) the fair market value of the Opco Common Shares owned by B Sub Holdco immediately before the transfers described in this paragraph
is of
(f) the aggregate fair market value of all the issued and outstanding shares of Opco immediately before the transfers described in this paragraph.
For the purpose of this paragraph, the expression "approximate that proportion" means that the discrepancy from that proportion, if any, would not exceed XXXXXXXXXX %, determined as a percentage of the net fair market value of each type of property which B Sub Holdco has received on such transfer as compared to what it would have received had it received its appropriate pro rata share of the net fair market value of that type of property.
As consideration for the transfers of property described herein, B Sub Holdco will:
(g) assume certain undertakings of Opco, if any, relating to the properties transferred to it to which paragraph 12(1)(a) is applicable;
(h) assume some of the remaining liabilities of Opco, and
(i) issue to Opco B Sub Holdco Special Shares having a redemption amount and fair market value equal to the B Sub Holdco Special Share Redemption Amount.
The B Sub Holdco Special Shares issued to Opco will entitle Opco to more than 10% of the voting rights under all circumstances in respect of the issued share capital of B Sub Holdco and will represent more than 10% of the fair market value of all of the issued share capital of B Sub Holdco such that B Sub Holdco will be connected with Opco by virtue of paragraph 186(4)(b).
68. Opco will jointly elect with B Sub Holdco, in prescribed form and within the time referred to in subsection 85(6), to have the provisions of subsection 85(1) apply to the transfer, as described in paragraph 67, of each eligible property of Opco so that the agreed amount in each joint election will not be less than the least of:
(a) the amounts specified in subparagraphs 85(1)(d)(i), (ii) and (iii), in the case of eligible capital property;
(b) the amounts specified in subparagraphs 85(1)(e)(i), (ii) and (iii), in the case of depreciable property of a prescribed class; and
(c) the amounts specified in subparagraphs 85(1)(c.1)(i) and (ii), in the case of property described in paragraph 85(1)(c.1).
In each case, the agreed amount will not exceed the fair market value of the property transferred, nor will it be less than the amount permitted under paragraph 85(1)(b).
For purposes of each election described in this paragraph, the portion, if any, of the principal amount of any liability of Opco that is assumed by B Sub Holdco that exceeds the amount determined under (a), (b) or (c) above in respect of the particular transferred property to which it relates shall be treated as being assumed in consideration for the transfer of other property by Opco to B Sub Holdco such that the aggregate amount of liabilities assumed by B Sub Holdco does not exceed the aggregate of the agreed amounts under subsection 85(1) in respect of all eligible property so transferred to B Sub Holdco.
The amount added to the stated capital account maintained for the B Sub Holdco Special Shares will equal the amount by which the aggregate cost to B Sub Holdco, as determined pursuant to subsection 85(1), where relevant, of the properties transferred by Opco (as described in paragraph 67) exceeds the aggregate amount of liabilities assumed by B Sub Holdco as described in paragraph 67.
69. Opco will jointly elect with B Sub Holdco under subsection 20(24), in the manner and within the time referred to in subsection 20(25), in respect of the consideration, if any, paid by Opco to B Sub Holdco for the assumption of the undertakings of Opco, if any, as described in subparagraph 67(f) above.
Purchase for Cancellation of Opco Common Shares
70. In the event that Opco has a balance in its GRIP, Opco will purchase for cancellation a number of the Opco Common Shares held by B Sub Holdco such that the resulting dividend will not exceed the amount of that balance and Opco will designate, pursuant to subsection 89(14), by notifying B Sub Holdco in writing that the entire dividend will be an "eligible dividend" as defined in subsection 89(1). The purchase price for such Opco Common Shares will be an amount equal to the fair market value of such Opco Common Shares (the "Opco GRIP Common Share Purchase Amount"). Opco will satisfy the Opco GRIP Common Share Purchase Amount by issuing and delivering to B Sub Holdco a non-interest bearing note (the "B Opco GRIP Purchase Note") payable on demand and having a principal amount and fair market value equal to the Opco GRIP Common Share Purchase Amount of the Opco Common Shares so purchased. B Sub Holdco will accept the B Opco GRIP Purchase Note as full payment of the Opco GRIP Common Share Purchase Amount.
Opco will then purchase for cancellation all of the remaining Opco Common Shares held by B Sub Holdco at an amount equal to the fair market value of such Opco Common Shares (the "Opco Common Share Purchase Amount"). Opco will satisfy the Opco Common Share Purchase Amount by issuing and delivering to B Sub Holdco a non-interest bearing note (the "B Opco Purchase Note") payable on demand and having a principal amount and fair market value equal to the Opco Common Share Purchase Amount of the Opco Common Shares so purchased. B Sub Holdco will accept the B Opco Purchase Note as full payment of the Opco Common Share Purchase Amount.
Opco will elect in its return of income under Part I to be filed for its taxation year ending immediately before the first purchase for cancellation of the Opco Common Shares held by B Sub Holdco as described herein not to have subsection 256(9) apply.
Redemption of B Sub Holdco Special Shares
71. B Sub Holdco will redeem all of the B Sub Holdco Special Shares held by Opco at the B Sub Holdco Special Share Redemption Amount. B Sub Holdco will satisfy the redemption price by issuing and delivering to Opco a non-interest bearing note (the "B Sub Holdco Redemption Note") payable on demand having a principal amount and fair market value equal to the B Sub Holdco Special Share Redemption Amount of the B Sub Holdco Special Shares so redeemed. Opco will accept such note as full payment of the redemption price.
Cancellation of Notes
71.1 Following the purchase for cancellation of the Opco Common Shares held by B Sub Holdco, the B Opco GRIP Purchase Note and the B Opco Purchase Note issued by Opco to B Sub Holdco will be set off against the B Sub Holdco Redemption Note issued by B Sub Holdco to Opco in full satisfaction of the respective obligations thereunder (although the aggregate principal amount of the B Opco GRIP Purchase Note and the B Opco Purchase Note may be different from that of the B Sub Holdco Redemption Note) and each such note will be cancelled.
72. Immediately following the Proposed Transactions described in paragraphs 67 to 71.1 above, the net fair market value of each type of property retained by Opco, determined in the manner described in paragraphs 65 and 66 above, will approximate that proportion of the aggregate net fair market value of that type of property of Opco, determined immediately before the transfers described in paragraph 67 above, that:
(a) the aggregate fair market value, immediately before the transfers of property described in paragraph 67 above, of the Opco New Common Shares owned by A Sub Holdco,
is of
(b) the aggregate fair market value, immediately before the transfers of property, of all of the issued and outstanding shares of Opco.
73. As consideration for the property acquired by B Sub Holdco on the distribution, B Sub Holdco will assume a certain amount of Opco's bank and mortgage indebtedness, some portion of which will be refinanced with another lender immediately following the distribution.
74. As part of the commercial arrangements between B Sub Holdco and Opco, B Sub Holdco will indemnify Opco for:
(a) any claims against Opco relating to the income producing properties transferred by Opco to B Sub Holdco, including environmental, slip and fall, mortgage covenants or other counterparty obligations, regardless of how such claims arose or whether such claims relate to periods prior to or after the completion of the Proposed Transactions;
(b) 50% of any claims relating to the income producing properties directly or indirectly transferred by Opco to SubcoA or SubcoB, as described in paragraph 58 above, including environmental, slip and fall, mortgage covenants or other counterparty obligations, regardless of how such claims arose or whether such claims relate to periods prior to or after the completion of the Proposed Transactions; and
(c) 50% of any tax liabilities (other than property taxes which would be dealt with as part of the usual real estate purchase adjustment mechanism) for the periods prior to the completion of the Proposed Transactions, or arising in respect of the Proposed Transactions.
In the event that Opco receives any amounts from third parties relating to the matters which are the subject to the above indemnity as described in (a), (b) and (c) above, B Sub Holdco would be entitled to share in such amounts to the same extent that Opco would have been indemnified on the assumption that such amount represented an obligation of Opco.
Opco will provide equivalent indemnities to B Sub Holdco.
75. Subsequent to the completion of the transactions described in paragraph 72 above, Opco may change its name to A Co.
76. At a future time subsequent to the Proposed Transactions described herein, B Holdco and B Sub Holdco may amalgamate under the provisions of the Corporations Act 1 in such manner that the provisions of subsection 87(1) will apply to the amalgamation.
77. Neither Opco nor any corporation controlled by Opco has acquired or will acquire any property, or has incurred or will incur any liability, in contemplation of and before the transfer described in paragraph 67 above, otherwise than as described herein or in the ordinary course of business.
78. None of Opco, B Sub Holdco, SubcoA or SubcoB will dispose of any of its assets as part of a series of transactions which includes the Proposed Transactions, otherwise than as described herein or as a result of a disposition in the ordinary course of business.
79. None of the shares of B Sub Holdco or Opco has been or will be, at any time during the implementation of the Proposed Transactions described herein:
(a) the subject of any undertaking that is referred to in subsection 112(2.2) as a "guarantee agreement";
(b) a share that is issued or acquired as part of a transaction, event or series of transactions or events of the type described in subsection 112(2.5); or
(c) the subject of a dividend rental arrangement.
80. Neither B Sub Holdco nor Opco is or will be prior to the completion of the Proposed Transactions:
(a) a corporation described in any of paragraphs (a) to (f) of the definition of "financial intermediary corporation" in subsection 191(1), or
(b) a specified financial institution.
81. Legal title to particular items of real property beneficially owned by Opco may be held by other corporations as nominees or bare trustees for Opco. References to transfers of property described in the Proposed Transactions are references to transfers of beneficial interests only.
PURPOSE OF THE PROPOSED TRANSACTIONS
82. The purpose of the Proposed Transactions is to effect a "split-up" of XXXXXXXXXX of Opco.
RULINGS
Provided that the preceding statements constitute complete and accurate disclosure of all of the relevant facts, Proposed Transactions and the purpose of the Proposed Transactions, and provided that the Proposed Transactions are completed in the manner described above, our rulings are as follows:
Opco Distribution
A. Subject to the application of subsection 69(11), the provisions of subsection 85(1) will apply to the transfer by Opco to B Sub Holdco as described in paragraph 67, of each eligible property which is the subject of an election described in paragraph 68, so that the agreed amount in respect of such transfer will be deemed to be the transferor's proceeds of disposition and the transferee's cost of the property transferred under paragraph 85(1)(a). For greater certainty, paragraph 85(1)(e.2) will not apply to the transfers referred to herein.
For the purposes of a joint election in respect of depreciable property of a prescribed class, as described in paragraph 68, the reference to "the undepreciated capital cost to the taxpayer of all the property of the class immediately before the disposition . . ." in subparagraph 85(1)(e)(i) will be read to mean the proportion of the undepreciated capital cost to Opco of all the property of that class that the capital cost of the property so transferred immediately before the disposition is of the capital cost of all property of that class immediately before the disposition.
B. By virtue of subsection 20(24), Opco will be entitled to deduct in computing its income for the taxation year in which the assumption occurs, the amount paid to B Sub Holdco in respect of the undertakings of Opco to which paragraph 12(1)(a) applies that are assumed by B Sub Holdco as described in paragraph 67 and which are the subject of an election described in paragraph 69, and the amount so assumed will be deemed to be an amount described in paragraph 12(1)(a) in respect of B Sub Holdco.
Dividends on Redemption
C. Subsection 84(3) will apply on the redemption of the B Sub Holdco Special Shares as described in paragraph 71, to deem B Sub Holdco to have paid and Opco to have received a dividend equal to the amount, if any, by which the aggregate amount paid thereon exceeds the paid-up capital in respect of such shares immediately before such redemption, and such dividend:
(a) will be included in computing the income of Opco pursuant to subsection 82(1) and paragraph 12(1)(j);
(b) will be deductible by Opco pursuant to subsection 112(1) in computing its taxable income for the year in which such dividend is deemed to have been received, and such deduction will not be prohibited by any of subsections 112(2.1), (2.2), (2.3) or (2.4);
(c) will be excluded in determining the proceeds of disposition to Opco of the shares so redeemed pursuant to paragraph (j) of the definition "proceeds of disposition" in section 54;
(d) will only be subject to tax under Part IV to the extent provided in paragraph 186(1)(b) as B Sub Holdco will be connected with Opco by virtue of paragraph 186(4)(b);
(e) will not, to the extent that the amount paid by B Sub Holdco to Opco on the redemption of the B Sub Holdco Special Shares does not exceed the amount specified in respect of those shares for the purposes of subsection 191(4), be subject to tax under Part IV.1 or Part VI.1 on the basis that the dividend will be deemed to be an excepted dividend and an excluded dividend, as the case may be, pursuant to subsection 191(4); and
(f) will, pursuant to the provisions of subsection 112(3), reduce any loss that would otherwise be realized by Opco as a result of the redemption of the B Sub Holdco Special Shares.
Dividends on Purchase for Cancellation
D. As a result of the purchases for cancellation of the Opco Common Shares held by B Sub Holdco as described in paragraph 70 above, by virtue of subsection 84(3), on each such purchase for cancellation Opco will be deemed to have paid and B Sub Holdco will be deemed to have received a dividend equal to the amount, if any, by which the aggregate amount paid thereon exceeds the paid-up capital, immediately before such purchase for cancellation, in respect of the Opco Common Shares included in the particular purchase and each such dividend:
(a) will be a taxable dividend and will be included in computing the income of B Sub Holdco pursuant to subsection 82(1) and paragraph 12(1)(j);
(b) will be deductible by B Sub Holdco pursuant to subsection 112(1) in computing its taxable income for the year in which such dividend is deemed to have been received, and such deduction will not be prohibited by any of subsections 112(2.1), (2.2), (2.3) or (2.4);
(c) will be excluded in determining the proceeds of disposition to B Sub Holdco of the Opco Common Shares so purchased pursuant to paragraph (j) of the definition "proceeds of disposition" in section 54;
(d) will, pursuant to the provisions of subsection 112(3), reduce any loss that would otherwise be realized by B Sub Holdco as a result of the purchase for cancellation of the Opco Common Shares;
(e) will only be subject to tax under Part IV to the extent provided in paragraph 186(1)(b), as Opco will be connected with B Sub Holdco by virtue of paragraph 186(4)(b);and
(f) will not be subject to tax under Part IV.1 or Part VI.1 by virtue of paragraph (b) of the definition of "excepted dividend" in subsection 187.1 and paragraph (a) of the definition of "excluded dividend" in subsection 191(1), respectively.
E. The extinguishment of the debt obligations as a result of the cancellation of the B Sub Holdco Redemption Note, the B Opco GRIP Purchase Note and the B Opco Purchase Note, as described in paragraph 71.1, will not give rise to a "forgiven amount", within the meaning thereof in subsections 80(1) or 80.01(1), and neither Opco nor B Sub Holdco will realize any gain or sustain any loss upon the extinguishment of the debt obligations as a result of the cancellation of the B Sub Holdco Redemption Note, the B Opco GRIP Purchase Note and the B Opco Purchase Note, as described in paragraph 71.1.
F. Provided that as part of the series of transactions or events that includes the Proposed Transactions described above, there is not:
(a) an acquisition of property in circumstances described in paragraph 55(3.1)(a);
(b) a disposition of property in the circumstances described in subparagraph 55(3.1)(b)(i);
(c) an acquisition of control in the circumstances described in subparagraph 55(3.1)(b)(ii);
(d) an acquisition of shares of Opco in the circumstances described in subparagraph 55(3.1)(b)(iii); or
(e) an acquisition of property in the circumstances described in subparagraph 55(3.1)(c) or 55(3.1)(d);
which has not been described herein, then by virtue of paragraph 55(3)(b), subsection 55(2) will not apply to the taxable dividends referred to in the rulings referred to in Rulings C and D and, for greater certainty, subsection 55(3.1) will not apply to exclude the application of paragraph 55(3)(b).
Other Rulings
G. The provisions of subsections 15(1), 56(2), 56(4), 69(4) and 246(1) will not apply to any of the Proposed Transactions, in and of themselves.
H. As a result of the Proposed Transactions, in and by themselves, subsection 245(2) will not be applied to redetermine the tax consequences confirmed in the rulings given above.
I. Provided B Sub Holdco continues to use the property acquired from Opco as described in paragraph 67 above for the purpose of gaining or producing income therefrom, B Sub Holdco will be entitled to deduct in computing its income amounts paid or payable as interest in a year or payable in respect of a year, depending upon the method regularly followed in computing its income, pursuant to a legal obligation to pay interest on any of the liabilities of Opco assumed by B Sub Holdco.
J. As a result of the purchase for cancellation the Opco Common Shares as described in paragraph 70 above, A Sub Holdco will acquire control of Opco such that subsection 249(4) will apply to deem the taxation year of Opco to have ended immediately before the time that control of Opco is acquired by A Sub Holdco.
Exchange of Opco Common Shares by A Sub Holdco
K. Provided that the Opco Common Shares represent capital property to A Sub Holdco, the provisions of subsection 86(1) will apply and the provisions of subsection 86(2) will not apply to the exchange of the Opco Common Shares by A Sub Holdco described in paragraph 63.1 above, such that:
(a) the cost of the Opco New Common Shares received by A Sub Holdco on the exchange of Opco Common Shares as described in paragraph 63.1 above will be deemed by paragraph 86(1)(b) to be an amount equal to the aggregate adjusted cost base to A Sub Holdco, immediately before the exchange of the Opco Common Shares; and
(b) A Sub Holdco will be deemed by paragraph 86(1)(c) to have disposed of its Opco Common Shares for aggregate proceeds of disposition equal to the aggregate cost to A Sub Holdco of the Opco New Common Shares received on the exchange of Opco Common Share as determined in (a) above.
Regulations
L. By virtue of subsection 1102(14) of the Regulations, each property which immediately before the transfer described in paragraph 67 above, is depreciable property of a prescribed class or separate prescribed class of Opco and which is acquired by B Sub Holdco on the transfer described in paragraph 67 above, will be depreciable property of the same prescribed class or separate prescribed class, as the case may be, of B Sub Holdco.
M. Provided that the condition specified in paragraph 1100(2.2)(f) or (g) of the Regulations is satisfied, paragraph 1100(2.2)(h) of the Regulations will apply so that no amount will be included by B Sub Holdco under paragraph 1100(2)(a) of the Regulations in respect of depreciable property of a prescribed class that is property acquired by B Sub Holdco on the transfer described in paragraph 67.
These rulings are given subject to the limitations and qualifications set out in Information Circular 70-6R5 issued by Canada Revenue Agency ("CRA") on May 17, 2002 and are binding on the CRA provided that the Proposed Transactions are completed by XXXXXXXXXX .
The above rulings are based on the Act and the Regulations in its present form and do not take into account any proposed amendments to the Act and the Regulations which, if enacted, could have an effect on the rulings provided herein.
Unless otherwise confirmed, nothing in this ruling should be construed as implying that CRA has confirmed, reviewed or has made any determination in respect of:
(a) the FMV or the cost amount of any particular asset or the PUC of any shares referred to herein; and
(b) any other tax consequence relating to the facts, Proposed Transactions or any transaction or event taking place either prior to the Proposed Transactions or subsequent to the Proposed Transactions, whether described in this letter or not, other than those specifically described in the rulings given above, including whether any of the Proposed Transactions would also be included in a series of transactions or events that includes other transactions or events that are not described in this letter.
Yours truly,
XXXXXXXXXX
Section Manager
for Division Director
Reorganizations and Resources Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Branch
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