25 June 1991 Income Tax Severed Letter

By services, 22 July, 2022
Language
English
Document number
Severed letter type
Miscellaneous
d7 import status
Drupal 7 entity type
Node
Drupal 7 entity ID
656895
Extra import data
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"menu:://Federal Income Tax [CCH Tax ]/Tax Window Files/Tax Window Files/Tax Window Files/1990s/1991 [SE91_212.213 - JN91_146.148]/JN91_063 — Capital Gains Deduction - Insufficient Dividends Test"
],
"field_proprietary_citation": [],
"field_release_date_new": "1991-06-25 08:00:00",
"field_tags": []
}
Main text
24(1)                    5-911627
                                             D. Yuen
                                             (613) 957-2111
                    19(1)

June 25, 1991

Dear Sirs:

Re: Subsection 110.6 (8) of the Income Tax Act (Canada) (the "Act")

We are writing in response to your letter of June 5, 1991 in which you requested our comments on whether it would be reasonable to conclude, in a certain situation, that a significant portion of a capital gain was attributable to the fact that insufficient dividends were paid on certain shares.

Comment

Whether a significant portion of a capital gain is attributable to the fact that dividends were not paid on a share or that the dividends paid on such a share were less than ninety percent of the average annual rate of return as defined in subsection 110.6(9) of the Act and what constitutes a significant portion of a capital gain will depend on the facts and circumstances of the particular situation. As we have not been apprised of all of the relevant facts, we are unable to make a final determination.

Yours truly,

for Director Reorganizations and Non-Resident Division Rulings Directorate Legislative and Intergovernmental Affairs Branch

000063