| 24(1) | File No. 900861 |
| W.C. Bailey | |
| 957-2061 | |
| 19(1) |
Dear Sirs:
Re: Exempt Corporation - paragraph 149(1)(0.2)
This will reply to your letter of May 10, 1990 concerning the above matter.
The situation you describe, involving 24(1) as 24(1) appears to be a proposed transaction that might be more appropriately dealt with as an advance ruling. However, we offer the following comment where two wholly owned subsidiaries of a pension fund amalgamate and only one of them qualifies under paragraph 149(1)(0.2) for the exemption from Part I tax prior to the amalgamation.
The concluding words of paragraph 149(1)(0.2) state that where there has been a merger (amalgamation) of two or more corporations, the corporation formed is deemed to be the same corporation as, and a continuation of, each predecessor corporation. This means that if one of the predecessor corporations did not qualify for the exemption prior to the amalgamation, then the amalgamated corporation will not qualify either because it is deemed to be the same corporation.
We trust that these remarks will be sufficient to indicate that an amalgamation is not the answer to your situation.
Yours sincerely,
E.M. Wheeler For DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch