Use of high-PUC shares rather than a note in a pipeline transaction may be preferred

It is suggested that taking back shares with high paid-up capital (rather than a note) from the transferee Buyco in a pipeline transaction reduces whatever risk there is of s. 84(2) applying.

Neal Armstrong. Summary of Balaji (Bal) Katlai and Hugh Neilson, “Challenges and Caution: Using a Pipeline for Shareholder Remuneration” Tax for the Owner-Manager, Vol. 22, No. 4, October 2022, p. 1 under s. 84(2).