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 Sir or Madam:
Re: Expenses Incurred to Attend Shareholders' Meetings
This is in reply to your recent correspondence, addressed to the Ottawa District Taxation Office, which queries the deductibility of expenses incurred to attend annual stockholders' meetings. You have referred to the situation of an individual who has a portfolio of several different stocks who wishes to attend these meetings for reasons relating to the retention or possible disposal of the shares, dividend payments or capital gains considerations.
We have assumed, for the purposes of our reply, that the individual referred to above is not in the business of investments but is simply a recipient of income from property.
It is our view that the expenses incurred to attend these meetings are capital in nature and not incurred to produce income from property. The costs incurred to attend annual meetings, examine financial statements or periodicals and like expenses are incurred to maintain or improve the investment portfolio itself and that income is derived, not from these activities which relate to the acquiring or selling of capital property, but from the investments themselves.
We do not consider that the expenses incurred can be considered fees paid to a person for advice as to the advisability of purchasing or selling a specific share or for services in respect of the administration or management of shares or securities. This is so as the expenses referred to by you, while not explained in any detail, do not appear to include allowable investment counsel fees. We enclose a copy of Interpretation Bulletin IT-238R2 for you in this regard.
We trust our comments will be of assistance to you.
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© Her Majesty the Queen in Right of Canada, 1991
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© Sa Majesté la Reine du Chef du Canada, 1991
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