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You requested our comments regarding the application of subsection 55(2) of the Act in the following hypothetical circumstances. (1) Opco is a Canadian-controlled private corporation and a taxable Canadian corporation within the meanings of paragraphs 125(7)(b) and 89(1)(i) of the Act, respectively. (2) The common shareholders of Opco are married individuals owning 65 per cent and 35 per cent of the issued shares respectively. (3) The corporation has a fair market value of $1,000,000 represented by $800,000 of active business assets and $200,000 cash. (4) The corporation has accumulated $500,000 in safe income for the purposes of subsection 55 (2) of the Act. (5) The shareholders intend to sell 50 per cent of each of their shareholdings to an arm's length party for $500,000. (6) Before the intended sale, a new company ("Newco") is incorporated, and the spouses transfer one half of their respective shares of Opco to Newco pursuant to the provisions of subsection 85(1) of the Act and receive common shares of Newco as consideration. ...

As discussed in IT-339R2, a PHSP must be in the nature of insurance and must contain the following basic elements: i) an undertaking of one person, ii) to indemnify another person, iii) for an agreed consideration, iv) from a loss or liability in respect of an event, v) the happening of which is uncertain. ...

Accordingly, a prescribed DSLP would not be disqualified as such where withdrawals other than to fund a leave of absence are permitted only with the employer's approval and such approval is given only where the employer is satisfied that the employee entered into the arrangement to fund a leave of absence but that financial or other considerations make it a hardship for the employee to continue his or her participation. ...

With respect to a variation of a trust which would add discretionary beneficiaries, serious consideration should be given as to whether such a variation constitutes a disposition of any interests in the trust. ...

Directive CA92-25 dated April 16, 1992 sets out specific criteria in paragraphs 6 & 7 for the cancellation of penalties and related interest assessed on source deduction accounts; the paragraphs which follow, however, appear to be more general and allow for discretionary consideration. ...

We shall forward a copy of our letter to the Publications Division for their consideration in the next revision of the Bulletin. ...

.'s since you have not submitted a sample copy for our consideration. ...

The consideration for the sale of the goodwill was a promissory note for $228,057 plus $141,943 received in cash. 3. ...

We concur with your interpretation and will bring this matter to the attention of our Current Amendments Division for their consideration. ...

You seek our views as to 24(1).As advanced income tax rulings are only given in respect of proposed transactions subject to the guidelines in Information Circular IC 70-6R (a copy is enclosed for your information), we can only provide you with some general comments. 24(1) OUR COMMENTS A gift is a voluntary and gratuitous transfer of real or personal property without consideration. ...