Dear Sirs:
Re: Incorporated Medical Practice
This is in reply to your letter of December 20, 1990, requesting our opinion as to whether or not a disposition occurs under the Income Tax Act (the "Act") when the restriction, that no one other than a registered doctor hold the voting shares of the corporation, is removed from the articles of the corporation. This may occur when the corporation, incorporated in British Columbia, no longer carries on the practice of medicine.
Our Comments
In our opinion, and further to paragraph 15(d) of Interpretation Bulletin IT-448, no disposition, pursuant to paragraph 54(c) of the Act, of the voting shares will result, in and by itself, when the restriction that only a registered doctor hold the voting shares, is removed from the articles of the corporation.
We trust that our comments will be of assistance to you.
Yours truly,
for DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch