CRA indicates that a separated common-law couple can do a s. 55(3)(a) spin-off from their jointly owned Opco within the first 90 days of their separation

A common-law couple, on the 85th day after they started living separate and apart due to a relationship breakdown, carried out a split-up of the business corporation jointly owned by them (i.e., a spin-off of half the business to a Newco owned by one of them) in reliance on the s. 55(3)(a) exception from s. 55(2). After the 90th day, they were no longer deemed under the s. 248(1) “common-law partner” definition to be common-law partners and, thus, ceased to be related.

CRA indicated that this did not retroactively cause them to not be related for purposes of applying the tests in ss. 55(3)(a)(i) to (v) to the split-up reorganization of a few days earlier.

Neal Armstrong. Summary of 29 March 2021 External T.I. 2020-0839571E5 under s. 55(3.01)(a).