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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: whether new fiscal period on change of control
Position: yes
Reasons: 249.1(1) Act; 249(4) ; new fiscal period not more than 53 weeks
1999-000918
XXXXXXXXXX Denise Dalphy
(613) 957-9231
Attention: XXXXXXXXXX
June 28, 2000
Dear Sirs:
Re: Definition of Fiscal Period
This is in reply to your request for our comments on the application of the definition of "fiscal period" in subsection 249.1(1) of the Income Tax Act (the "Act") to a particular fact situation.
You have presented us with the following facts:
1. ACO is a private corporation as defined in subsection 89(1) of the Act and is resident in Canada for purposes of subsection 2(1) of the Act.
2. ACO has a regular year end of July 31. ACO's recent year ends were July 31, 1998 and July 31, 1999.
3. ACO is a wholly-owned subsidiary of BCO.
4. On October 28, 1999, BCO sold all of its shares in ACO to an arm's length third party.
5. ACO will not file an election under subsection 256(9) of the Act.
6. On November 1, 1999, the Board of Directors of ACO passed a resolution establishing that the fiscal period of ACO will end on October 31 of each year, commencing in the year 2000.
You have asked whether ACO will be required to file an income tax return for the period October 28, 1999 to October 31, 1999 or whether ACO may file a return for the period October 28, 1999 to October 31, 2000.
As a result of the application of subsection 249(4) of the Act and the definition of "fiscal period" in subsection 249.1(1) of the Act, ACO may fix the end of its first fiscal period after the change in control at October 31, 2000.
The foregoing comments represent our general views with respect to the subject matter. As indicated in paragraph 22 of Information Circular 70-6R3, the above comments do not constitute an advance income tax ruling and accordingly are not binding on the Canada Customs and Revenue Agency. Our practice is to make this specific disclaimer in all instances in which we provide an opinion.
Yours truly,
Paul Lynch
Manager
Partnerships Section
Resources, Partnerships and Trusts Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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