Principal Issues: Whether paragraph 87(1)(a) applies in the hypothetical situation described in the technical interpretation 2017-0696821E5.
Position: Generally yes.
Reasons: Prior positions and Envision case.
XXXXXXXXXX 2018-078592 Mr. Séguin
April 14, 2021
Dear Sir,
Subject: paragraph 87(1)(a) and technical interpretation 2017-0696821E5
This technical interpretation provides general comments on the legislative provisions of the Act. It is not intended to confirm the tax treatment in any particular situation, but rather to assist you in determining the tax treatment. Our Directorate will only confirm the tax treatment of particular transactions in the context of a request for an advance income tax ruling as described in Information Circular IC 70-6R11, Advance Income Tax Rulings and Technical Interpretations.
Your Question
You wish to know whether the condition in paragraph 87(1)(a) is met in the hypothetical situation presented in the Interpretation.
Our Comments
We are of the view that, in light of Envision Credit Union v. Canada, 2013 SCC 48, the condition in paragraph 87(1)(a) would generally be met in the hypothetical situation presented in the Interpretation.
We apologize for the delay in responding to your question.
Best regards,
Urszula Chalupa, LL.B, M. Fisc.
For the Director
Reorganizations Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch