2009 Ruling 2009-0348861R3 - Amendment to 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: Is any part of the delivery of a troy ounce of gold and, if applicable cash as referred therein, in satisfaction for each XXXXXXXXXX of principal amount of XXXXXXXXXX notes subject to Canadian non-resident withholding tax pursuant to paragraph 212(1)(b) of the Act?

Position: No

Reasons: The notes constitute the forward sale of gold.

XXXXXXXXXX 							2009-034886

XXXXXXXXXX , 2009

Dear XXXXXXXXXX :

Re: XXXXXXXXXX (the "Taxpayer")

Business No. XXXXXXXXXX

This is in reply to your letter of XXXXXXXXXX , wherein you requested a supplemental ruling with respect to advance income tax ruling 2008-032688 (the "Original Ruling") which was issued on XXXXXXXXXX , 2009.

In this letter, unless otherwise noted, all capitalized terms have the meanings specified in the Original Ruling.

As a result of your letter, the following changes are made to the Original Ruling:

1. The following definitions will be added to the Original Ruling:

"Dealerco" means XXXXXXXXXX ., a dealer in gold and other precious metals;

"Non-institutional Purchasers" means, collectively, the Purchasers who hold XXXXXXXXXX principal amount of the Notes and, as of XXXXXXXXXX , are unable to open an account with XXXXXXXXXX due to circumstances beyond their or the Taxpayer's control;

2. The first sentence of paragraph 7 of the Original Ruling is deleted and replaced with:

Each of the Purchasers will have an account with XXXXXXXXXX to which the physical gold will be delivered. However, with respect to the Non-institutional Purchasers, the Taxpayer will make arrangements with Dealerco to establish individual accounts, to which the physical gold will be delivered, for the Non-institutional Purchasers.

As required, and at least for the first Repayment Date, the Taxpayer will physically deliver the gold to the Non-institutional Purchasers by selling to Dealerco the required number of troy ounces of gold (at a negotiated price which is lower than the price at which Dealerco sells gold to its customers). The Taxpayer will immediately thereafter purchase from Dealerco, for the benefit of the Non-institutional Purchasers, the same number of troy ounces of gold at Dealerco's retail price. The amount of gold purchased will be partitioned among and credited to the Dealerco accounts of the Non-institutional Purchasers in accordance with their entitlement under the Notes. Thereafter, the Taxpayer will have no further rights with respect to such gold or control over the Non-institutional Purchasers' accounts with Dealerco.

We confirm that the ruling provided in the Original Ruling shall continue to apply to the Taxpayer in the manner set out in the Original Ruling.

Yours truly,

XXXXXXXXXX
for Director
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch