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.
Revenue Canada Taxation Head Office
W.P. Guglich (613) 995-1723
Attention: XXXX
March 8, 1984
Dear Sirs:
This is in reply to your letter of May 17, concerning Article 13(4)(a) of the Canada-United Kingdom Income Tax Convention wherein you requested our view as to whether gross or net asset values will be used in determining whether shares derive the greater part of their value from immovable property.
Our Department will generally accept a valuation method based on net asset values after assigning the debt where it reasonably relates. However, we recognize that there will be circumstances where this test can be manipulated and if there is any evidence of manipulation in contemplation of a share sale, our Department would not feel obliged to accept this net value test, particularly in those circumstances where the increase in value of shares is mainly attributed to an increase in the value of Canadian real estate.
We regret the delay in replying to your inquiry and trust our comments are of assistance to you.
Yours truly,
for Director Corporate Rulings Division Legislation Branch
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© Her Majesty the Queen in Right of Canada, 1984
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© Sa Majesté la Reine du Chef du Canada, 1984
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