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.
Dear Sirs:
Re: Subsection 115(4)
This is in reply to your letter dated April 24, 1991 whereby you requested our views concerning the application of subsection 115(4) of the Canadian Income Tax Act.
Subsection 115(4) applies "where a non-resident person ceases at any particular time in a taxation year to carry on such of the businesses described in any of subparagraphs 66(15)(h)(i) to (vii) as were carried on by him immediately before that time at one or more fixed places of business in Canada and ..." Thus the provision may have application not only where there is a cessation of the businesses described in subparagraphs 66(15)(h)(i) to (vii) but also where such business continue but the non-resident ceases to carry on such businesses at one or more fixed places of business in Canada
It is essentially a question of fact as to whether and, if so, when either or both of these conditions have been met in any particular case.
We cannot express an opinion as to whether or, if so, when subsection 115(4) applies in the particular case under consideration by you as such an opinion can be formulated only after determination and consideration of all the relevant facts.
However, we can advise that, for purposes of subsection 115(4), where all of the property of the businesses described in subparagraphs 66(15)(h)(i) to (vii) (including its fixed places of business in Canada) is sold en bloc as a going concern to a single purchaser and consequential upon such sale the vendor ceases to carry on such of the businesses described in any of subparagraphs 66(15)(h)(i) to (vii) as were carried on by him immediately before such sale at one or more fixed places of business in
Canada, we will generally consider the vendor to have ceased to carry on the businesses referred to above immediately after the disposition of such property.
Yours truly,
for DirectorReorganizations and Non-Resident Division Rulings Directorate Legislative and Intergovernmental Affairs Branch
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