Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Q. 26: Paid-up capital of shares owned by non-resident
Section 84.1 permits a transferor to receive, without triggering a deemed dividend, non-share consideration having a value equal to the greater of the adjusted cost base and the paid-up capital of the shares being transferred. However, the maximum value of the non-share consideration that a non-resident transferor can receive, without triggering a deemed dividend under section 212.1, is equal to the paid up capital of the transferred shares.
What is the reason for this difference between section 84.1 and section 212.1?
Department's Position
This question raises a tax policy concern that should be directed by the questioner to officials from the Department of Finance.
Prepared by: J.E. HarmsDate: May 27, 1991File: 7-911249
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