Split-up ruling illustrates application of butterfly rules to preferred shares

A ruling letter for the split-up of a holding company (DC) held by five siblings illustrates the operation of the butterfly rules where the siblings hold preferred shares of DC in addition to their common shares.  Consistently with practice of yesteryear, DC's shares of a corporation (controlled by uncles and cousins of the siblings) over which it did not exercise significant influence are treated as an investment asset.

Neal Armstrong.  Summary of 2013 Ruling 2013-0475681R3 under s. 55(1) – distribution.