October 4, 1989
| Mr. Wallace G. Conway | Wm. R. McColm |
| Chief, Corporate Reorganization | 957-2068 |
| and Distribution | |
| Tax Policy and Legislation Branch | BY HAND |
| Department of Finance | |
| 140 O'Connor Street | F-3267 |
| L'Esplanade Laurier | |
| 17th Floor, East TowerOttawa, Ontario K1A 0G5 |
Dear Wally:
21(1)(b)
Also attached is a copy of a request for a legal opinion as well as a summary of the conclusions reached by Legal with respect to the issues raised. All copies have, of course, been sanitized.
Yours sincerely,
B.J. Bryson Acting DirectorCurrent Amendments andRegulations Division
Attach.
WRMcC/jab
Summary of Legal's Opinionsconcerning Issues raisedin the 24(1)
1.
2.
3. 23
4.
APPENDIX
In reviewing the draft we have had the opportunity to examine the Specialty Rulings memorandum commenting thereon, dated September 12, 1989, as well as their additional comments on the copy of the draft attached. Thus, our suggestions are restricted to those not already made by Specialty Rulings.
1. We suggest that the end of the last sentence in paragraph 15 be modified to read as follows:
"Mr. X has generally reduced the assets remaining in Opco 1 to the minimum necessary for it to be able to carry on the restaurant business."
2. In ruling B., to make the basis for the ruling clearer for the reader we recommend that line 2 be revised to read as follows:
"...meaning of subsection 186(4) of the Act, by virtue of subsection 186(2), for purposes of..."
3. In ruling C, again to make the ruling clearer for the reader, we recommend that there be added to the end of the first sentence following the words "Opco 2." the following clause:
"Opco 2, by virtue of paragraph 55(3)(a)."
4. Finally, in ruling E, we recommend that no ruling be given with respect to section 246 and the ruling with respect to section 245 be worded as follows:
"E. As a result of the proposed transactions, in and by themselves, subsection 245(2) of the Act will not be applied to redetermine the tax consequences confirmed in the rulings given."
The above points, particularly 2, 3 and 4, were discussed with Specialty Rulings.