Principal Issues: (1) Will the transfer of 100% of the voting common shares of a taxable Canadian corporation to a public foundation result in the public foundation acquiring control of the corporation under paragraph 149.1(3)(c)? (2) Will the GAAR apply to the proposed transaction?
Position: (1) No, the foundation is deemed not to have acquired control of the corporation by virtue of paragraph 149.1(12)(a). (2) GAAR will not apply.
Reasons: (1) The foundation did not acquire for consideration more than 5% of the common shares of the corporation. (2) Based on the facts provided, the proposed transaction would not be considered an avoidance transaction.