Principal Issues: Supplemental Ruling to 2004-007521. Will changes to a plan affect the rulings previously provided?
Position: No
Reasons: No significant consequence to the rulings provided
XXXXXXXXXX 2004-009568
XXXXXXXXXX, 2004
Dear XXXXXXXXXX:
Re: Supplemental Advance Income Tax Ruling
XXXXXXXXXX
XXXXXXXXXX
This is in reply to your letter of XXXXXXXXXX, regarding certain amendments to the above-noted plan and is supplemental to our advance income tax ruling number 2004-007521 dated XXXXXXXXXX, 2004 (the "Ruling").
Unless otherwise indicated, all terms defined in the Ruling have the same meaning when used in this letter. In addition, unless otherwise indicated, this letter is based solely on the facts and proposed transactions as described in the Ruling. The documentation submitted with your requests does not form part of the facts and proposed transactions and any references thereto are provided solely for the convenience of the reader.
As a result of your letter, the following changes are made to the Ruling:
1. paragraph (e) of the Definitions Section:
"Change of Control" is amended to read:
"(i) a sale of all or substantially all of the assets of the Corporation,
(ii) a sale, directly or indirectly (including, without limitation, through the transfer of ownership of Units by the Fund, the Corporation, or any combination thereof) resulting in more than 50% of the voting securities of the Corporation being held, directly or indirectly, by another person, or
(iii) a merger or consolidation of the Fund, or the Corporation into another person.
For the avoidance of doubt, in no event shall either:
(a) the conversion or exchange alone of interests in the Limited Partnership, shares of the Corporation or shares of Holdco for Units, or
(b) the reorganization that occurred for the purposes of the initial public offering as described in 1 belowconstitute a Change of Control hereunder.
Notwithstanding the foregoing, if any such event listed in clauses (i) through (iii) of this definition results in the sale to, or merger or consolidation with, any person that, in any case, is engaged in a business that is unrelated in all respects to the business of the Corporation (an "Unrelated Affiliate") and any such transaction results in the Corporation becoming either a wholly-owned subsidiary of an Unrelated Affiliate or a division of an Unrelated Affiliate, then such transaction shall be deemed a Change of Control;"
2. paragraph (oo) of the Definitions Section is amended to read:
"the terms, "employee", "officer", "mutual fund trust", and "taxable Canadian corporation" have the meanings assigned to them by subsection 248(1) of the Act, the term "arm's length" has the meaning assigned by subsection 251(1) of the Act and "related persons" has the meaning assigned by subsection 251(2) of the Act.
3. Paragraph 3. is amended to read:
"Trust One holds a XXXXXXXXXX % interest in the Limited Partnership."
4. Paragraph 13(f)(i) and (ii) and the first two rows of the table in paragraph (o) are amended to replace "XXXXXXXXXX" with "XXXXXXXXXX". Corresponding changes are made to the Addendum to replace XXXXXXXXXX.
Notwithstanding the above changes, we confirm that the Ruling will continue to be binding on the Canada Revenue Agency in the manner described therein, provided the proposed plan is implemented on or before XXXXXXXXXX.
Yours truly,
XXXXXXXXXX
for Director
Financial Industries Division
Income Tax Rulings Directorate