The carve-out rule potentially can apply in the year of acquiring a foreign subsidiary without contradicting the calendar application of the fresh start rule

If on, say October 1, Canco acquires a non-resident corporation ("FA"), which carries on a passive business, s. 95(2)(k.1)(i) generally will apply to deem FA to have been carrying on its investment business in Canada from January 1 onwards of that year for purpose of computing its income from that business.  Russell and Montillaud suggest that "this is not the same as deeming [FA] to have been an affiliate from the beginning of the year," so that the carve-out rule in  "paragraph 95(2)(f.l) can apply to exclude from income, gains or losses that arose prior to [FA] becoming an affiliate without contradicting the rule in subparagraph 95(2)(k.1)(i)."

Neal Armstrong.  Summary of Grant Russell and Philippe Montillaud, "’Fresh Start’ Rules – on Becoming an Affiliate", International Tax Planning (Federated Press), Vol. XX, No.2, 2015, p. 1392 under s. 95(2)(k).