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Where a former shareholder of a predecessor corporation receives any non-share consideration, in lieu of a fraction of a share of the new corporation, and the total amount or value of that non-share consideration does not exceed $200, the shareholder may choose to either: (a) include the amount of any gain or loss from the disposition of the shareholder’s fractional share in the computation of income; or (b) ignore the computation of that gain or loss and reduce the adjusted cost base of the new corporation shares received on the amalgamation by that total amount or value. However, this choice is not available if the total amount or value of any non-share consideration received exceeds $200. ... Where the streaming of paid-up capital to a specific class of shares of the new corporation has been done in order to accomplish a form of surplus strip, consideration will be given to the application of the general anti-avoidance rule in section 245. ...

If a corporation were to make repeated or deliberate use of this relief mechanism, consideration would be given to the application of the general anti-avoidance rule in section 245. 2.17 Subsection 4900(15) does not apply to small business investments acquired before March 23, 2011, for RRSPs and RRIFs, and before March 23, 2017, for RESPs. ... Example 4 The following example illustrates a situation in which the CRA may give favourable consideration to a request that the 100% advantage tax be waived. ... Upon learning of the share redemption later that year, Martin immediately swaps the shares out of the TFSA for fair market value consideration. ...

Example 3 Application of the annual CEE deduction to compute a taxpayer’s income for a tax year Description CCEE pool value Income Taxpayer’s CCEE opening balance for the tax year $0 n/a Taxpayer’s income from all sources for the tax year n/a $100 Feasibility study expenses that qualify as CEE(CRCE) $70 n/a Maximum CEE deduction for the tax year ($70) ($70) Taxpayer’s CCEE balance and income for the tax year $0 $30 2.43 Any consideration received by a taxpayer for property or services, the cost of which was CRCE, will be deducted from the taxpayer’s CCEE pool under subsection 66(12.1). For example, if the taxpayer has disposed of feasibility studies, the cost of which previously qualified as CEE(CRCE), the taxpayer will reduce its CCEE pool by the amount of the consideration received. ... Flow-through shares 2.52 A share or a right is an FTS under subsection 66(15) if: it is: a share issued by a PBC (other than a prescribed share which is defined in subsections 6202.1(1) and (2) of the Regulations) or a right to acquire a share of the capital stock of a PBC (other than a prescribed right which is defined in subsections 6202.1(1.1) and (2.1)); it is issued pursuant to a written agreement with an investor under which the PBC agrees to incur CEE(CRCE) in an amount equal to the consideration received for the share or the right and renounce this amount in favour of the investor within a specific period of time; and it is issued for consideration that does not include property transferred by the investor on a tax-deferred basis. 2.53 If the risk of loss to the investor is limited or it may be reasonable to consider that there is an obligation to repay or return all or part of the original investment, these shares or rights are considered prescribed shares or prescribed rights, respectively, and are not FTSs. ...