AIM's Office (2) R.M. Beith Office (2)AuthorSection ChiefResearch File Corporate Case File orSubject File Return to Rulings, Room 400 Met.
| August 15, 1989 |
Mr. R.A. Short General DirectorTax Policy and Legislation Division Department of Finance16th Floor East TowerL'Esplanade Laurier Ottawa, Ontario K1A 0G5
Dear Al:
Re: "GAAR" and the "successor rules" in section 66.7 of the Income Tax Act.
Thank you for your letter of July 12, 1989, replying to Mr. Bryson's letter of June 14 regarding the above.
In the last paragraph of your letter you suggest that GAAR will not be applicable if the taxpayers are making a reasonable apportionment of the resource pools between the mining business and the oil and gas business. We understand that the taxpayers intend that no more than nominal proceeds will arise on the transfer of the mining business, and do not intend to, and most likely cannot, in any event, effect an apportionment of the pools as you had contemplated. As noted in our earlier memorandum, the pools to be transferred on the sale of the oil and gas properties consist largely of costs relating to the mining business.
Given that this is the situation, would you advise whether you consider GAAR applicable to the transactions.
R.M. Beith Acting Assistant Deputy MinisterLegislative and Intergovernmental Affairs Branch
c.c.: B. BrysonActing DirectorCurrent Amendments and Regulations Division
John Shaw/cc957-8968August 11, 1989