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Ss. 55(2) and 55(2.1) should not apply to deem such deemed dividends to be capital gains, provided that such deemed dividends do not exceed the safe income on hand that could reasonably be considered to contribute to the capital gain that could be realized on a disposition at FMV, immediately before the dividend, of the Class A and Class B common shares of DC2 held by each of TC1 and TC3 at the safe income determination time for the series of transactions that includes the payment of the deemed dividends. ...

Rulings Including that the transactions will not by themselves be considered to result in any disposition of property to, or increase in interest by, an unrelated person described in any of ss. 55(3)(a)(i) to (v). ...

After noting that the date of disposition of the FORP partnership interest was either 6 above by virtue of s. 98(2), or the dissolution date in 7 above, the Directorate stated: [A] partnership interest held by a foreign affiliate of a taxpayer will be considered to be excluded property when the partnership would be a foreign affiliate of the taxpayer when the deeming rules in paragraphs (d) and (e) in the definition of “excluded property” are applied and if substantially all of the FMV of the property of the partnership itself satisfies the excluded property definition. … [I]n determining whether [NR1’s] partnership interest is excluded property … any assets held by the partnership on which income was or would be recharacterized as active would qualify as excluded property under paragraph (c). ...

It further notes that when these expressions are used in the Act, a determination is made based on the degree of activity and each situation must be considered in the light of its own particular facts. ...

. … …[In its Guidance] … to demonstrate that the various exclusions were applicable … to entities carrying on a business whose principal purpose is to derive income from property, including interest, dividends, rents and royalties, such as investment management corporations (in Examples 8 and 12), the CRA assumed that these corporations maintained a sufficient level of activity such that their income could be considered as derived from such a business. ...

CCRA indicated that although s. 84(2) would not apply, it appeared that the dividends resulting from the winding-up of Xco and the distribution of Xco property to ABco and CDco could technically give rise to the application of s. 55(2), to the extent that one of the purposes of the transaction or series of transactions was to significantly reduce the portion of the capital gain that, but for the dividend, would have been realized on the disposition of an Xco share at FMV immediately before the dividend and that could reasonably be considered to be attributable to anything other than income earned or realized by a corporation after 1971 and before the "safe income determination time" in respect of the series of transactions. ...

Rulings Include that the proposed transactions will not by themselves be considered to result in a disposition or increase in interest described in ss. 55(3)(a)(i) to (v). ...

Its deferred expenses will not be considered property for these purposes. ...

Furthermore, "any dividend paid by PC1 to Spouse A would be considered to be derived directly or indirectly from a “related business” carried on by PC2 (and not PC1) in Year 2 and subsequent years," given that the "derived directly or indirectly" phrase was to be construed broadly. ...

. … Thus, as specified in subsection 146(8.1), the executor and the Spouse will have to file Form T2019 jointly if they wish to designate the amounts that the estate received (or, as the case may be, is considered to have received) from the deceased annuitant's RRSP as a refund of premiums received by the Spouse. ...