Income tax: do documents, prepared prior to the completion of tax returns and showing an analysis of shareholdings for the purpose of establishing continuity of ownership, constitute source documents under the guidelines for Access to Professional Accounting Advisors' Papers?

Yes. Under the guidelines, tax working papers are considered to be source documents because "they are used in assembling and compiling information preparatory to the completion of tax returns".

Documents which show an analysis of shareholdings for the purpose of establishing continuity of ownership preparatory to the completion of tax returns are tax working papers.

Accordingly, these documents are source documents. Example : A Ltd., a Public Company, had significant changes in its shareholders over the period of three years. To ascertain whether the losses incurred in prior years could be claimed as a deduction in the current year, an analysis of the shareholding changes was undertaken by its accounting advisors prior to completion of its income tax return. The document showing the analysis is a source document.