Principal Issues: Whether the comments in Technical Interpretation 9718365 ("TI 9718365") are still applicable.
Position: Yes.
Reasons: IT-462.
XXXXXXXXXX 2011-042377 Charles Rafuse 613-247-9237
December 20, 2011
Dear XXXXXXXXXX :
Re: Payments Based on Production or Use
This is in response to your email of October 11, 2011, wherein you requested that we confirm whether the comments in Technical Interpretation # 9718365 ("TI 9718365") still represents the Canada Revenue Agency's ("CRA") views.
Our Comments
We understand that TI 9718365 dealt with a situation involving the application of paragraph 12(1)(g) of the of the Income Tax Act (the "Act"), to a disposition of a partnership interest held as capital property. In TI 9718365 we stated, inter alia, that "Subject to the comments in paragraphs 8 and 9 of IT-462, subparagraphs 5(b) and (c) of IT-462 deal with situations similar to the one described in your letter."
The application of the rules of the Act, including the application of paragraph 12(1)(g) of the Act, can only be determined upon a full examination of all of the relevant facts and circumstances of the particular situation. However, subject to such a determination, generally speaking, the comments in TI 9718365 continue to be applicable.
We trust that these comments will be of assistance.
Yours truly
Michael Cooke
Manager
Capital Transactions Section
Business and Partnership Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch