S. 49 option rules only are expected to apply to the Slate REIT rights offering

Slate Retail REIT is making a rights offering to the holders of its units (including the holders of exchangeable units in subsidiary LPs) to acquire REIT units at a discount to their pre-announcement trading price. The rights will be tradeable on the TSX.

In the unlikely event that the rights were to trade at a significant value, there would be a technical concern that their value represented a taxable benefit under s. 105(1). However, the disclosure indicates that CRA likely would accept that there would be no consequences of the distribution of the rights to the unitholders other than under the s. 49 rules.

Neal Armstrong. Summary of Circular of Slate Retail REIT for rights offering under Offerings – Rights Offerings – Units.