| 922405 | |
| J.D. Brooks | |
| (613) 957-2103 |
24(1)
Attention: 19(1)
September 14, 1992
Dear Sirs:
Re: Application Software and Regulation 1100(17.2)
This is in reply to your letter of June 30, 1992 in which you requested our opinion concerning the interpretation of subsection 1100(17.2) of the Income Tax Regulations. You queried whether the absence of services ancillary to the use of a property (see paragraph 1100(17.2)(b) of the Regulations) would exclude the property from the description of "leasing property" in subsection 1100(17).
Our Comments
As you noted in your letter, the addition of subsection 1100(17.2) of the Regulations introduced an expanded definition of the concept of rent. Subsection 1100(17) provides that "leasing property" is depreciable property which is used principally for the purpose of gaining or producing gross revenue that is rent, royalty or leasing revenue. Thus, even without resorting to subsection 1100(17.2), a property may fit the description of "leasing property".
However, since subsection 1100(17.2) expands the concept of rent, rent for purposes of subsection 1100(17) also includes gross revenue derived from services offered that are ancillary to the use of property which is used to derive gross revenue from the right of a person to use the property.
We trust that this will be of assistance.
Yours truly,
E. Wheelerfor DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch