2000 Income Tax Severed Letter 2000-0048741 - XXXXXXXXXX - Change in facts

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.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

Principal Issues: Slight change in facts and rulings.

Position: Granted with some exceptions.

Reasons: The law.

XXXXXXXXXX 2000-004874

Attention: XXXXXXXXXX

XXXXXXXXXX, 2000

Dear Sirs:

Re: XXXXXXXXXX
Advance Income Tax Ruling #1999-001089

This is in reply to your facsimile request dated XXXXXXXXXX, wherein you requested certain amendments to the proposed transactions and rulings described in advance income tax ruling #1999-001089 dated XXXXXXXXXX, 2000 (the "Ruling"). You further advise that none of the proposed transactions have been completed. For the purposes of this letter any term that was defined in the Ruling and referred to herein will have the same meaning.

As a result of your request we confirm the following changes to the Ruling:

1. The second sentence in each of paragraphs 8 and 9 is cancelled and replaced as follows:

"Upon incorporation, XXXXXXXXXX Preferred Share will be issued to Mr. A."

2. The first sentence in paragraph 10 is cancelled and replaced as follows:

"Each of Mr. A, the Bare Trustee (on behalf of each of the Children), Child A, Child B and Child C (herein collectively referred to as the "Aco Transferors" and individually as an "Aco Transferor") will transfer all the shares of Aco owned or held by them, as described in 2 above, to Holdco."

3. Ruling J is cancelled and replaced as follows:

"Subsection 86(1) will apply to the exchange of the shares of Aco owned by Holdco as described in 16 above. For greater certainty, subsection 86(2.1) will not apply to such share exchange."

4. Ruling K(i) is cancelled and replaced as follows:

"(i) the shares of each Child's Investco which are to be issued to the particular Child and/or the Bare Trustee (on behalf of the particular Child), as the case may be, as described in 11, 12, 13 and 14 above, as consideration for the transfer of their respective shares of Holdco which are to be issued to the particular Child and/or the Bare Trustee (on behalf of the particular Child), as the case may be, as consideration for the transfer of their respective grandfathered shares of Aco that were owned by each such individual, as described in 10 above, to be the same shares as the grandfathered shares of Aco owned by each such individual for the purpose of paragraph 131(11)(b) of S.C. 1998, c. 19; and"

Notwithstanding the above noted changes to the proposed transactions and ruling K(i), we confirm that, subject to the conditions set out therein, the rulings given in the Ruling, as amended above, will continue to be binding on the Canada Customs and Revenue Agency ("CCRA") in accordance with the practice outlined in Information Circular 70-6R3, dated December 30, 1996, provided that all the proposed transactions are completed in the manner described in the Ruling, as amended herein, before XXXXXXXXXX.

Yours truly,

for Director
Reorganizations and International Division
Income Tax Rulings Directorate
Policy and Legislation Branch