Principal Issues: Does a timeshare membership for a resort outside Canada constitute an interest in real property for the purposes of subparagraph 212(1)(b)(viii) of the Income Tax Act (the "Act")?
Position: Unable to interpret.
Reasons: Paragraph 212(1)(b) was amended by the 2007 Federal budget, resulting in the interpretation request, as it was submitted, requiring the interpretation of a previous version of the Act to transactions completed in the past.
XXXXXXXXXX 2007-026105 L. Carruthers, CA May 15, 2008
Dear XXXXXXXXXX :
Re: Timeshare Memberships
This is in reply to the November 28, 2007, interpretation request you submitted regarding subparagraph 212(1)(b)(viii) of the Income Tax Act (the "Act") and timeshare memberships relating to property in Mexico.
In telephone conversations (Carruthers/XXXXXXXXXX ) on January 16 and 18, 2008, we discussed the fact that paragraph 212(1)(b) of the Act had been amended by the 2007 Federal budget. Then, in various telephone messages and conversations held throughout February and March 2008, we discussed that the amendments to paragraph 212(1)(b) resulted in your request, as it was submitted, requiring the interpretation of a previous version of the Act to transactions completed in the past. At that time, we explained that Canada Revenue Agency (the "CRA") does not provide written opinions with regard to transactions that are completed. We also discussed that the determination of whether a timeshare membership for a resort in Mexico constituted an interest in real property is a question of fact, which can only be determined after a review of all of the facts.
On March 31, 2008, you indicated, in a telephone conversation (Carruthers/XXXXXXXXXX ), that you intended to resubmit your interpretation request taking into consideration the relevant legislation, effective 2008, in the context of a hypothetical scenario. It is not the CRA's practice to hold inactive files open for long periods of time, and accordingly, as we have not received a resubmitted interpretation request, we are closing our file.
Subsequent to this action, should you decide to resubmit your request, we will be pleased to reconsider it if it is submitted in accordance with the procedures set out in Information Circular IC 70-6R5 dated May 17, 2002, issued by the CRA.
Yours truly,
R.A. Albert, CA
For Director
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate