16 October 1989 Income Tax Severed Letter AC58561 - Capital Dividend not Added to a Corporation's Capital Dividend Account

By services, 22 July, 2022
Official title
Capital Dividend not Added to a Corporation's Capital Dividend Account
Language
English
Document number
Citation name
AC58561
Severed letter type
Miscellaneous
d7 import status
Drupal 7 entity type
Node
Drupal 7 entity ID
658233
Extra import data
{
"field_external_guid": [],
"field_proprietary_citation": [],
"field_release_date_new": "1989-10-16 08:00:00",
"field_tags": []
}
Main text
19(1)                                          5-8561
                                               M. Shea-DesRosiers
                                               (613) 957-8953
October 16, 1989
Dear Sirs:

Re: Subsection 104(20) of the Income Tax Act (the "Act")

This is in reply to your letter of august 21, 1989 wherein you request a technical interpretation on the interaction of subsection 104(20) and paragraph 89(1)(b) of the Act where a private corporation is a beneficiary of a trust.

It is our view that subparagraph 89(1)(b)(ii) of the Act does not include capital dividends received through trusts. We therefore concur with your opinion that such a capital dividend could not be added to a corporation's capital dividend account as that term is defined in paragraph 89(1)(b) of the Act.

It is not the Department's practice to allow, on an administrative basis, a capital dividend received under subsection 104(20) of the Act to be added to the capital dividend account of a corporation.

We trust the above comments will be of assistance to you.

Yours truly,

for director Financial Industries Division Rulings Directorate