Revenue Canada Taxation
Head Office
XXXX
M.F. Symes (613) 957-2110
April 27, 1988
Dear Sirs:
Re: Acquisition of Control Subsection 249(4) of the Income Tax Act (the "Act")
This is in reply to your letter of February 22, 1988, in which you requested our views concerning the meaning of the wording "... control of a corporation has been acquired by a person or group of persons ..." as used in subsection 249(4) of the Act. In particular, your question concerned whether control of a corporation would be viewed as having been acquired by a group of persons where shares representing more than 50% of the voting shares of the corporation are acquired by a large group of unrelated persons.
It is generally our view that a "group of persons" will not be considered to have acquired control of a corporation unless such persons have a common link or interest or act together to control the corporation.
Whether control of a corporation has been acquired by a person or group of persons is a question of fact, however, which must be determined based upon a review of the circumstances of each particular case.
The expressions of opinion in this letter are not rulings and are not binding on Revenue Canada, Taxation as explained in paragraph 24 of Information Circular 70-6R.
Yours truly,
for Director Reorganizations and Non-Resident Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch