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For foreign income tax reasons, MCo is precluded from a direct method of leveraging, namely, incorporating a wholly-owned subsidiary ("OCo"), and transferring its NCo shares to OCo for an interest bearing loan and share consideration and having NCo and OCo amalgamate. ...

2016 Ruling 2016-0630761R3- Transfer of Shares-- summary under Paragraph 5901(2)(b) Summary Under Tax Topics- Income Tax Regulations- Regulation 5901- Subsection 5901(2)- Paragraph 5901(2)(b) stated capital distribution from FA treated as pre-acq dividend A foreign affiliate (New FA) of a Canadian corporation (ACo) transferred all the shares of FA1 to a Canadian-resident subsidiary (BCo) of ACo in consideration for a note of BCo whose amount equalled the sum of the relevant cost base of the FA1 shares and the net surplus (being exempt surplus) of FA1 (such sum, the “Transfer Amount”). ...

2016 Ruling 2016-0630761R3- Transfer of Shares-- summary under Subsection 15(1) Summary Under Tax Topics- Income Tax Act- Section 15- Subsection 15(1) no conferral of benefit where CRA required sideways transfer to occur at less than FMV A foreign affiliate (New FA) of a Canadian corporation (ACo) transferred all the shares of FA1 to a Canadian-resident subsidiary (BCo) of ACo in consideration for a note of BCo whose amount equalled the sum of the relevant cost base of the FA1 shares and the net surplus (being exempt surplus) of FA1 (such sum, the “Transfer Amount”). ...

More specifically: Aco establishes a new sister to Bco (Newco) to which Aco does an s. 85(1) drop-down of preferred shares of Bco having a fair market value equaling that of the trademarks; Bco spins-off the trademarks to Newco on a partial rollover basis in consideration for prefs of Newco, thereby using Bco’s net capital losses to effect a ½ step-up of the UCC of the trademarks under s. 13(7)(e)(ii) – and with Newco licensing the trademarks back to Bco for royalties; The prefs in 1 and 2 above are cross-redeemed (with reliance on the s. 55(3)(a) exception to s. 55(2)); Newco is wound-up under s. 88(1); Aco does an s. 85(1) drop-down of the trademarks back to Bco, but choosing an elected amount so as to uses up its net capital losses and to effect a further ½ step-up of the trademarks' UCC under s. 13(7)(e)(ii). ...

The estate will transfer all of its Class A shares to a newly formed corporation (Newco) in consideration for Note 2 and one Class A share of Newco, electing under s. 85(1). ...

Each of Leg1 and Leg2 will transfer all of their shares of Holdco to Newco in consideration for a note (Note 1 or Note 2) equalling the aggregate ACB of the transferred shares and for Class E non-voting non-cumulative redeemable retractable Class C shares of Newco, electing under s. 85(1). ...

A conventional pipeline was to be implemented under which AE Trust transferred its common shares of Aco and Bco on a s. 85(1) rollover basis to a “Newco” in consideration for two notes of Newco and nominal-value preferred shares with a price adjustment clause and, after the passage of (presumably) one year, Newco would be amalgamated with Aco and Bco, and the notes would then be gradually repaid. ...

After preliminary transactions to distribute capital dividends and eligible dividends from the companies, the trusts were then to engage in pipeline transactions in which the Aco and Bco shares were to be transferred to a ULC Newco on a s. 85(1) rollover basis in consideration for notes and nominal value preferred shares with redemption values subject to a price adjustment clause, and then convert those notes to high-PUC shares of the ULC – and only after a number of years, might ULC be amalgamated with Aco and Bco (which would have been continued to the same jurisdiction as Aco and Bco). ...

Proposed transactions The Estate will transfer its Class D shares to a corporation newly incorporated by it (Newco) in consideration for voting and participating shares of Newco, electing under s. 85(1). ...

Following the death of Mother, her estate and Trust were to engage in a pipeline transaction under which: The estate and Trust transfer their Aco shares under s. 85(1) to a Newco of Trust in consideration for Newco preferred shares. ...