Capital BLF Inc. provides meager rollover option on REIT conversion transaction

Capital BLF Inc., a small public real estate company, is converting into a REIT under a CBCA plan of arrangement.  Qualifying shareholders are given the option of transferring their shares on a rollover basis for exchangeable units of a subsidiary LP rather than on a taxable basis for REIT units.  Individuals do not so qualify, as the subsidiary LP must be an "excluded subsidiary entity" for SIFT purposes.

No tax disclosure is provided to those choosing the rollover option, perhaps reflecting uncertainty on the scope of the new character conversion (or synthetic disposition) rules.

Neal Armstrong.  Summary of Capital BLF Inc. Circular under CPC Conversion.