CRA finds that the requirement in s. 212.3(4) that the non-resident parent own at least one share of the CRIC can be satisfied by ownership of a fraction of a share

The only share of Canco (which had subscribed in cash for shares of its foreign subsidiary) was held by a limited foreign partnership (ForLP), whose general partner (GP) held a 1% interest in ForLP. The application of s. 212.3(25)(b) resulted in each partner in ForLP being deemed to own a fraction of the one share of Canco. Whether that share was a “cross-border class” as defined in s. 212.3(4) (so that the deemed dividend otherwise arising under s. 212.3(2) could be applied under s. 212.3(7) to reduce the share’s PUC) turned on whether GP, being the non-resident “parent”, satisfied the requirement in that definition that it “own at least one share of the class.”

CRA indicated “yes,” stating:

[S]ubsection 248(1) defines the word "share" to include a fraction of a share. In light of that definition, the deemed ownership by GP of 1% of the common share of Canco held by ForLP would result in GP owning “at least one share” of a class of shares of the capital stock of a corporation resident in Canada for purposes of applying the condition set out in paragraph a) of the definition of “cross-border class” in subsection 212.3(4).

Neal Armstrong. Summary of 13 July 2026 External T.I. 2023-0960801E5 under s. 212.3(4) - cross-border class.