1999 Ruling 992411A - S.111(5) - CANNOT RULE ON CONTINGENT FACTS

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:

Request that we rule on whether, provided the taxpayer carries on business throughout a particular taxation year, following a change in control, in the manner described in the original ruling request (991245), for profit or with a reasonable expectation of profit, that such business will be considered the same business as that in which the non-capital losses were incurred.

Position:

Cannot rule, but can provide comments that the contingent facts would not in and of themselves prevent a finding that the business would be considered the same business as that in which the non-capital losses were incurred.

Reasons:

This is a question of fact, where the facts are contingent on the taxpayer's course of conduct in the future. We cannot provide a ruling where the facts are not certain.

XXXXXXXXXX
XXXXXXXXXX 992411
XXXXXXXXXX

Attention : XXXXXXXXXX

XXXXXXXXXX, 1999

Dear Sirs:

Re: XXXXXXXXXX
XXXXXXXXXX
Advance Income Tax Ruling (991245) dated XXXXXXXXXX, 1999 (the "Ruling")

This is in reply to your letter dated XXXXXXXXXX with regard to a particular ruling that was requested but was not provided in the Ruling. Specifically you requested that provided XXXXXXXXXX carries on business throughout a particular taxation year following the change of control, in the manner described in the Ruling, for profit or with a reasonable expectation of profit such business will be considered the same business as that in which the non-capital losses were incurred.

As explained we cannot provide a ruling with regard to a determination of fact that is based on a taxpayer's course of conduct in the future. With regard to this subsequent determination of fact, the temporary reduction in the scale of XXXXXXXXXX business, XXXXXXXXXX and the absence of branch locations, while factors to be considered in determining whether the business carried on by XXXXXXXXXX in a particular taxation year following the acquisition of control by XXXXXXXXXX is the business in which the non-capital losses were incurred, would not in and by themselves prevent such a finding in this case.

We hope that this adequately explains our position with regard to this matter.

Yours truly,

for Director
Financial Industries Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch

.../cont'd