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.
1991 CPTS ROUNDTABLE
QUESTION
4. A Canadian controlled private corporation (CCPC) that is a principal business corporation under paragraph 66(15)(h) of the Act issues flow-through shares pursuant to a private placement and undertakes to expend all of the money on CEE, CDE and COGPE within 24 months after the end of the month in which the agreement was entered into. Would short term deposits in which the flow-through share funds have been invested until they are required be considered assets which are used in an active business?
ANSWER
4. Yes. Short term deposits in which flow-through share funds have been temporarily invested until they are required to be expended under the terms of the flow-through share agreement will be considered as assets which are used in an active business. It would be a question of fact however whether flow-through share funds which have not been expended on CEE, CDE or COGPE and which have been returned to the investor are assets used in an active business.
000250
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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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