| 24(1) | File No. 900245 |
| D. Duff | |
| (613) 957-8953 |
19(1)
May 30, 1990
This is in response to your letter of May 10, 1990 requesting technical interpretations regarding the definition of foreign property in subsection 206(1) of the Income Tax Act (the "Act").
Generally, we would not expect that the interest or right referred to in paragraph 206(1)(h) of the Act would include a situation where all assets of a corporation, including assets that would be foreign property, are pledged as security for debt obligations issued by that corporation. However, it would be a question of fact whether there is simply a pledge of assets or a situation where paragraphs 206(1)(f) or (h) could apply.
Generally, loans made by a Canadian corporation in the course of carrying on the business of lending money would not be considered to be portfolio investment. Again, however, it would be a question of fact whether a corporation is in the business of lending money or simply investing in debt instruments.
We trust that our comments will be of assistance to you.
Yours truly,
for Director Financial Industries Division Rulings Directorate