16 March 1987 Income Tax Severed Letter 95-2808 F

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:     Subparagraph 212(1)(b)(vii) of the Income Tax Act

This is in reply to your letter of January 29, 1987 requesting our opinion as to when, for purposes of the above noted paragraph, obligations issued in series under a single trust indenture will each be regarded as a single separate debt as opposed to "one of a number of obligations ... that are identical in respect of all rights ... attaching thereto, except as regards the principal amount thereof". You ask us to assume for purposes of replying to your request for an opinion, two pages of hypothetical facts.

Our Comments

Since the fact situation outlined in your letter would appear to relate to an actual situation involving identifiable taxpayers, we are unable to specifically comment on it except in the context of an advance income tax ruling request. Generally, however, our position with respect to a single debt issue that is split into two or more groups of obligations with each group carrying a different term, interest rate or security arrangement, is that such groups of obligations would not comprise a single debt issue of obligations that are identical in respect of all rights attaching thereto for purposes of subparagraph 212(1)(b)(vii) of the Act.

It should be noted that, where all obligations in a series are not issued and delivered on the same date, the 5 year period referred to in subparagraph 212(1)(b)(vii) will run from the actual date and delivery of the issue of each obligation and not from the date of issue of the evidence of indebtedness. In this connection see subparagraph 1(b) of Interpretation Bulletin IT-361R.

We trust that the above comments are satisfactory for your purposes.