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.
VANCOUVER DISTRICT OFFICE TAX STUDY GROUP ROUND TABLE
Q.14 Deemed Dividends
Paragraph 52 of IT-474R provides that section 84 does not apply to amalgamations to which section 87 applies. Accordingly, does section 84 apply where non-share consideration is received by a shareholder of the amalgamated corporation as part of the exchange of his shares of the predecessor corporation for the new shares of the amalgamated corporation?
Department's Position
An amalgamation is an amalgamation to which section 87 applies where the conditions of subsection 87(1) are satisfied. As a result, an amalgamation can be an amalgamation to which section 87 applies even where a shareholder of a predecessor corporation receives both shares of the amalgamated corporation and non-share consideration in exchange for shares of the predecessor corporation. On this basis, the position in paragraph 52 of IT-474R would apply to a section 87 amalgamation where the shareholder of a predecessor corporation receives both shares in the amalgamated corporation and non-share consideration in exchange for shares in the predecessor corporation.
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