3 January 1990 Ministerial Correspondence 58714 F - Short-term Preferred Share Definition

January 3, 1990

19(1)

Re:  Subsection 248(1) of the Income Tax Act (the "Act")  Short-term preferred share definition

We are writing in response to your letter of September 22, 1989, in which you have requested a technical interpretation concerning paragraphs (a) and (h) in the definition of Short-term Preferred Shares contained in subsection 248(1) of the Income Tax Act (the "Act").

Where a share is a short-term preferred share by virtue of the satisfaction of conditions described in paragraphs (a) or (h) of the definition of short-term preferred share in subsection 248(1), it is our view that if the conditions cease to be satisfied, then the characterization of the shares as short-term preferred shares could change at that time.

The above opinions are of a purely general nature.  In accordance with paragraph 24 of Information Circular 70-6R, they do not constitute advance income tax rulings and consequently are not binding on the Department.

Yours truly,

for DirectorFinancial Industries DivisionRulings Directorate