CRA indicates that use of a new holding company can enable a related-person spin-off

If two related and one unrelated individual spin-off real estate held in their Opco to a newly-formed sister company (Realtyco) also equally owned by them, the s. 55(3)(a) safe harbor will not apply to the deemed dividends arising on the cross-redemptions occurring as part of the spin-off mechanics.

On the other hand, if they first transfer Opco into a new "Holdco," with essentially the same spin-off mechanics now occurring beneath the benevolent umbrella of Holdco, the s. 55(3)(a) exception will now be available, provided a few precautions are taken. This would still accomplish an objective of insulating the real estate from creditors of the Opco operations.

Neal Armstrong. Summary of 10 October 2014 APFF Roundtable, Q. 16, 2014-0538031C6 F under s. 55(3)(a).