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.
February 6, 1991
Enquiries and Taxpayer Financial Industries
Assistance M. Shea-DesRosiers
957-8953
Renata Bujack Taxline
903364
"Foreign property" Subsection 206(1) of the Income Tax Act
This is in reply to your memorandum of November 23, 1990 with documents attached and further to our telephone conversation (Bujak/Shea-DesRosiers) of December 18, 1990 concerning the above-mentioned subject.
It is our opinion that Canadian Government Treasury Bills denominated in a currency other than Canadian (for ex., U.S., German, Swiss) do not constitute foreign property for the purposes of the Part XI Tax.
Furthermore, investment income and proceeds of disposition of such investments are not considered to be foreign property provided they are immediately converted to Canadian currency or promptly used to acquire property that is not foreign property.
On the other hand, if the Treasury Bills are from different countries (ex., U.S.A. Government Treasury Bills, Japan Government Treasury Bills) they would constitute foreign property as defined in subsection 206(1) of the Income Tax Act and thus be subject to Part XI tax.
We trust the above comments will be of assistance to you.
for Director Financial Industries Division Rulings Directorate
c.c.: Coreen Drescher Calgary D.O.
000227
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