Dear Sirs:
We are writing in response to your letter dated July 10, 1991 wherein you requested that we advise you as to what is the Department's position regarding the application of paragraph 15(1)(c) (formerly paragraph 15(1)(f)) of the Income Tax Act (Canada) (the "Act").
Your letter refers to a situation where all common shareholders of a corporation are given the right to purchase a unit which consists of a common share and a warrant to purchase another common share. You wish to know whether the initial right and the warrant would be a right described in paragraph 15(1)(c) of the Act.
It is our view that both the initial right and the warrant would constitute a "right" described in paragraph 15(1)(c) of the Act.
The foregoing comments represent our general views with respect to the subject matter of your letter. The foregoing opinions are not rulings and, in accordance with the guidelines set out in Information Circular 70-6R2 dated September 28, 1990, are not binding on the Department.
Yours truly,
for DirectorReorganizations and Non-Resident DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch