The following document was issued prior to the September 19, 2005 announcement that the provision of advance income tax rulings on income trusts and other flow-through entities would be postponed while the Department of Finance consultations are underway and until the government announces what action it may take.
SUBJECT: Reorganization under 132.2
XXXXXXXXXX
XXXXXXXXXX, 2005
Dear Messrs:
Re: Advance Income Tax Ruling
XXXXXXXXXX
(XXXXXXXXXX Tax Services Office, XXXXXXXXXX Taxation Centre)
XXXXXXXXXX (XXXXXXXXXX Tax Services Office)
This is in reply to your emails dated XXXXXXXXXX in which you requested amendments to the facts and proposed transactions set out in the Advance Income Tax Ruling letter (document # 2005-011989) issued to the above-referenced taxpayers on XXXXXXXXXX, 2005 (the Ruling).
It is our understanding that the series of proposed transactions described in the Ruling have not been completed and accordingly, following our review of your request, the Ruling is revised as follows:
1. In the Definitions section at the beginning of the Ruling, the reference to Paragraph 17(b) in the definition of "Class A Shares" is replaced by a reference to Paragraph 18(b).
2. In the Definitions section at the beginning of the Ruling, the reference to Paragraph 17(c) in the definition of "Class B Shares" is replaced by a reference to Paragraph 18(c).
3. In the Definitions section at the beginning of the Ruling, the definition of "New LP Interest" is replaced by the following: "means the aggregate limited partnership interest of Holdco in New LP described in Paragraph 17 and, following the amalgamation described in Paragraph 31, the aggregate limited partnership interest of Amalco in New LP;"
4. In the Definitions section at the beginning of the Ruling, the following sentence is added at the end of the definition of "Partnership Assets": "Partnership Assets also include a XXXXXXXXXX".
5. In the Definitions section at the beginning of the Ruling, the figure XXXXXXX in the definition of "Unit" is replaced by the figure XXXXXXXX.
6. The reference to Paragraphs "25 to 42" is replaced by a reference to Paragraphs "25 to 39" in:
(i) the Definitions section at the beginning of the Ruling in the definition of "Reorganization";
(ii) Paragraph 14;
(iii) Paragraph 25; and
(iv) the third paragraph before the Opinions section of the document.
7. XXXXXXXXXX
8. Second paragraph of Paragraph 16: XXXXXXXXXX the punctuation XXXXXXXXXX is changed, such that the paragraph reads as follows:
XXXXXXXXXX. Trustees cannot form a majority of the directors of Newco2 and a majority of its directors must be Independent Directors. No director of Newco2 may be an employee of the Partnership. XXXXXXXXXX
9. XXXXXXXXXX
10. XXXXXXXXXX
11. Second paragraph of Paragraph 34: the words "this Paragraph 33." are replaced by "this Paragraph 34".
12. Paragraph 36(b)(iv): the reference to "(i)" is replaced by a reference to "(iii)".
13. XXXXXXXXXX
14. The word "proposes" in the second paragraph of Ruling A is replaced by the word "purposes" and the following sentence is added at the end of the second paragraph of Ruling A: "For greater certainty, Amalco's taxation years will include the taxation year of Amalco that will commence upon the amalgamation described in Paragraph 31 and will end as provided in section 132.2."
15. Paragraph (d) of Ruling D: the words "the Units and" are deleted.
16. Ruling I: the words "the fiscal period" are replaced by the words "any fiscal period".
17. First line of Ruling J: the second reference to the words "of the Partnership" is deleted.
18. Paragraph (d) of Opinion B: the word "Trust" is replaced with the word "Unitholders".
19. Subparagraph (g)(iii) of opinion B: the words "realize of incur" are replaced by the words "realize or incur".
Notwithstanding the above-mentioned changes, we confirm that the rulings given in the Ruling, as amended above, will continue to be binding on the Canada Revenue Agency in the manner described therein.
Yours truly,
XXXXXXXXXX
for Director
International and Trusts Division
Income Tax Rulings Directorate
Policy and Planning Branch