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: Can CEE be renounced under a unit flow-through share agreement in respect of the portion of the subscription price allocated to a warrant to acquire a share that is not a flow-through share under both the current and proposed definitions of "flow-through share" in subsection 66(15)?
Position: See below.
Reasons: See below.
2010 CTF Conference November 28, 2010
Flow-through Shares
Question 19
Does the CRA consider that Canadian exploration expenses (CEE) can be renounced under a unit flow-through share agreement in respect of the portion of the subscription price allocated to a warrant to acquire a share that is not a flow-through share under both the current and proposed definitions of "flow-through share" in subsection 66(15)?
Response 19
It is the CRA's position that CEE can be renounced only in respect of the portion of the subscription price allocated to a warrant which represents a right to acquire a share that would be a flow-through share. Pursuant to paragraph (b) of both the current and proposed definitions of "flow-through share," the amount of resource expenses that may be renounced under the agreement cannot exceed the amount of consideration received by the corporation for the flow-through share or the right to acquire the flow-through share, as the case may be.
Ted Harris
2010-038434
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 2010
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 2010
Email this Content