Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be
correct at the time of issue, may not represent the current
Position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
WHETHER STOCK SPLIT IS ISSUANCE OF SHARES - PARAGRAPH
110.6(14)(f)
Position TAKEN:
NOT A SHARE ISSUE PROVIDED NO INCREASE IN ANY STATED CAPITAL
ACCOUNT OF THE CORPORATION.
Reasons FOR POSITION TAKEN:
PREVIOUS CORRESPONDANCE. DOC# 920337
940288
XXXXXXXXXX W.P. Guglich
Attention: XXXXXXXXXX
April 20, 1994
Dear Sirs:
Re: Stock Split - Paragraph 110.6(14)(f)
This is in reply to your letter of February 1, 1994 wherein you requested our views regarding the application of paragraph
110.6(14)(f) of the Income Tax Act (the "Act") where a corporation undertakes a stock split.
It appears that the interpretation you seek relates to a proposed transaction to be undertaken by a specific taxpayer and,
therefore, we bring to your attention Information Circular 70-6R2 dated September 28, 1990 issued by Revenue Canada, Taxation.
Confirmation with respect to proposed transactions involving specific taxpayers will only be provided in response to a request for an advance income tax ruling. If you wish to obtain an advance income tax ruling for a particular taxpayer with respect to specific transactions which are contemplated, a written request for an advance income tax ruling can be submitted in accordance with the Information Circular. However, we can offer the following general comments.
It is our view that a stock split which does not result in an increase in any stated capital account would not be considered to
constitute a share issue for purposes of paragraph 110.6(14)(f) of the Act.
Unless as otherwise stated all references to statute are to the Income Tax Act S.C. 1970-71-72, c.63 as amended consolidated to June 10, 1993.
The above comments are an expression of opinion only and are not binding on the Department. Nevertheless, we trust our comments will be of assistance.
Yours truly,
for Director
Business and General Division
Rulings Directorate
Legislative and Intergovernmental
Affairs Branch
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© Her Majesty the Queen in Right of Canada, 1994
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