Principal Issues:
1. For the purposes of section 55, where an individual A, a trust and company A are related to one another but the children of individual A are not related to the trust and company A, whether the acquisition of control of company A, followed by the acquisitions of shares of company A by individual A's children, will be subject to the application of subsection 55(4)?
2. Whether ITAR 26(5) will apply to a pre-1972 share when the original owner of the share transfers such share to a non-arm's length person and elects under ITAR 26(7) to deem the cost of the share to be its V-day value?
3. Where a trust controls company A, and individual A, the trust and company A are related to one another for the purposes of section 55, whether the shifting of control of company A from the trust to individual A will result in an acquisition of control by individual A for the purposes of section 55?
Position:
1. yes.
2. no.
3. no.
Reasons:
1. As one of the main purposes of having individual A acquiring control of company A is to cause each of individual A's children to be related to company A so that subsection 55(2) will not apply to a dividend.