10 January 1990 T.I. (June 1990 Access Letter, ¶1257)

s. 40(2)(e) generally will not apply to the winding-up or liquidation of a foreign affiliate provided that under the relevant foreign corporate law, the shares of the foreign affiliate are not disposed of "to a person" as a result of the liquidation (as is the case under Canadian corporate law).

Under Canadian corporate law, the shares of a corporation which is being wound-up or liquidated are not disposed of "to a person" as a result of the liquidation. Consequently, the shareholders' shares of the corporation have not been redeemed, acquired or cancelled as a result of the liquidation and s. 84(9) would not apply to the disposition.