CRA indicates that the 10% of votes and FMV tests for excluded share status can be satisfied on a collective basis

One of the tests for share of a specified individual to be “excluded shares” is that the specified individual own shares of the corporation representing 10% or more of the fair market value of all its shares and 10% or more of the voting rights. CRA stated that these two tests can “be applied at the shareholder level (i.e., based on the aggregate of all classes of shares so owned) versus on each specific class of shares owned by the specified individual” so that, for example, these test would be satisfied if the individual held non-voting common shares representing 20% of the corporation’s equity FMV and special voting shares carrying 20% of the votes but having a nominal FMV.

Neal Armstrong. Summary of 21 August 2018 External T.I. 2018-0771811E5 under s. 120.4(1) – excluded share – (b).