5-911627
Dear Sirs:
Re: Subsection 110.6 (8) of the Income Tax Act (Canada) (the "Act")
We are writing in response to your letter of June 5, 1991 in which you requested our comments on whether it would be reasonable to conclude, in a certain situation, that a significant portion of a capital gain was attributable to the fact that insufficient dividends were paid on certain shares.
Comment
Whether a significant portion of a capital gain is attributable to the fact that dividends were not paid on a share or that the dividends paid on such a share were less than ninety percent of the average annual rate of return as defined in subsection 110.6(9) of the Act and what constitutes a significant portion of a capital gain will depend on the facts and circumstances of the particular situation. As we have not been apprised of all of the relevant facts, we are unable to make a final determination.
Yours truly,
for DirectorReorganizations and Non-Resident DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch