| 921342 | |
| 24(1) | J.D. Brooks |
| (613) 957-2103 |
Attention: 19(1)
August 31, 1992
Dear Sirs:
Re: Section 22 of the Income Tax Act (the "Act")
This is in reply to your letter of April 28, 1992 in which you requested our opinion as to whether a privately-appointed receiver would be considered a "vendor" for purposes of section 22 of the Act and thereby enable the receiver to file a section 22 election.
Our Comments
A receiver is appointed to manage the assets or business of a person (referred to herein as the "debtor"). However, the appointment of a receiver does not divest the debtor of his legal or beneficial ownership of the property which the receiver will manage; rather, the receiver merely manages the property. Depending upon the powers granted to the receiver, he may have the authority to sell property which is under his control. However, any transfer of property to a purchaser would still be done in the name of the debtor. As you are aware, an election under subsection 22(1) of the Act must be made jointly by the purchaser and the vendor.
Since, prior to the transfer to the purchaser, the property would be owned by the debtor, it is the debtor who is the vendor and accordingly it is the debtor's responsibility to sign the election. Whether a receiver may file an election on behalf of a taxpayer depends on the authority bestowed by the taxpayer on the person. Generally, having the authority as a receiver to dispose of a debtor's property would not be sufficient authority to file income tax elections with respect to such dispositions. In order to sign an election on behalf of a taxpayer, a person must have the legal authority to so act. For instance, in the case of minors, elections may be made by someone who can legally bind the child. In the case of a corporation, there will normally be an authorized officer of the corporation to act for the corporation.
These comments represent an expression of opinion and, as stated in Information Circular 70-6R2 dated September 28, 1990, are not binding on the Department.
Yours truly,
G. Thornleyfor DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch