CRA applies IT-126R2 re the timing of addition of the wound-up subsidiary’s CDA

In IT-126R2, the CRA states that it considers that where the formal dissolution of a corporation is not complete but there is substantial evidence that the corporation will be dissolved within a short period of time, for the purpose of ss. 88(1) and (2) the corporation is considered to have been wound up. CRA confirmed that this position as to when the subsidiary had been “wound up” also applied as to when the capital dividend account of the subsidiary was to be added to that of the parent.

The limited facts provided were insufficient to determine whether indeed this time was before the time of the filing of articles of dissolution for the subsidiary.

By the way, translations of all the CRA responses provided at the (regular) APFF 2019 Roundtable are now available on our Roundtable pages. Translations of the written answers for the APFF 2019 Financial Strategies and Instruments Roundtable were published by us a week ago.

Neal Armstrong. Summary of 11 October 2019 APFF Roundtable, Q.6 under s. 87(2)(z.1).