2010 Ruling 2010-0363461R3 - Supplemental 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.

Principal Issues: Changes to Ruling 2009-033051

Position: Ruling modified

Reasons: Changes do not affect the validity of the rulings given.

XXXXXXXXXX

XXXXXXXXXX , 2010

Dear XXXXXXXXXX :

Re: XXXXXXXXXX
Supplemental Advance Income Tax Ruling

This is in reply to your email of XXXXXXXXXX (hereinafter "Email") and is supplemental to our advance income tax ruling number 2009-033051 that was issued to the above-captioned taxpayer on XXXXXXXXXX , 2010 (hereinafter the "Ruling"). Unless otherwise defined, all capitalized terms in this letter have the meanings assigned to them in the Ruling.

In your Email, you ask us to add to the Ruling two new proposed transactions and to amend the Ruling accordingly. The two new proposed transactions consist of (1) Child4 will settle a self benefit trust (XXXXXXXXXX ) with a $ XXXXXXXXXX dollar bill and the XXXXXXXXXX class A common shares of the capital stock of Holdco1 that he owns, and, (2) XXXXXXXXXX will distribute, by way of a capital distribution, the Amalco C Notes to Child4.

Consequently, we amend the Ruling as follows:

1. In the list of names of the taxpayers on page 2 of the Ruling;

(a) Replace:

• Collectively, Child1, Child2, Child3 and Child4.

"Children"

With:

• Collectively, Child1, Child2 and Child3.

"Children"

(b) Replace:

• Collectively, Parent and the Children.

"Family"

With:

• Collectively, Parent, the Children and Child4.

"Family"

(c) Insert:

• XXXXXXXXXX .

"Trust"

2. In paragraphs 4 and 13, insert immediately after Children "and Child4".

3. Replace paragraph 16 with the following new paragraph 16:

Parent, the Children and Child 4 hold their shares of the capital stock of Holdco1 as Capital Property. For Child1, the shares of the capital stock of Holdco1 it owns are Taxable Canadian Property.

4. Insert immediately after the heading "PROPOSED TRANSACTIONS" the following new paragraph 42.1:

Trust will be created by Child4 by transferring to Trust a $ XXXXXXXXXX dollar bill and the XXXXXXXXXX class A common shares of the capital stock of Holdco1 he owns. The sole beneficiary of Trust will be Child4 and the trustee of Trust will be XXXXXXXXXX . It is intended that the properties Child4 will transfer to Trust will be transferred in circumstances to which subsection 73(1.01) applies.

5. In the first bullet in paragraph 46 insert immediately after the Children "and Trust".

6. In paragraphs 58, 59, 61 and 63, replace the reference(s) to:

(a) Child4 with Trust;

(b) Child4's-Class D Redemption Value with Trust's-Class D Redemption Value;

(c) Child4's-Class E Redemption Value with Trust's-Class E Redemption Value;

7. In the first sentence in paragraph 58, replace the phrase "Amalco he owns" with "Amalco it owns".

8. In the last sentence in paragraph 63, replace the phrase "the redemption of his class D" with "the redemption of its class D" .

9. Insert immediately after paragraph 64 the following new paragraph 64.1:

Trust will distribute, by way of a capital distribution, the Amalco C Notes to Child4.

10. In the rulings F, G and I in the RULINGS GIVEN section of the Ruling, replace Child4 with Trust.

11. In the COMMENTS section of the Ruling:

(a) Renumber paragraph (c) as (d); and,

(b) Insert the following new paragraph (c):

The transactions described in paragraph 42.1.

Confirmation

Provided that the preceding statements and the statements contained in the Ruling constitute a complete and accurate disclosure of all the relevant facts and proposed transactions and of the purposes of the Proposed Transactions, notwithstanding the above changes and the preceding statements, we hereby confirm that, subject to the conditions, limitations, qualifications and comments set out in the Ruling and this letter, the Ruling will continue to be binding on CRA.

An invoice for our fees in connection with this file will be forwarded to you under separate cover.

Yours truly,

XXXXXXXXXX
for Director
Corporate Reorganizations and
Resources Industry Section
Reorganizations and Resources Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch