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Once the cumulative such an amount exceeds Opco’s ACB of the Holdco Common shares, under s. 40(1) the excess will be considered a capital gain. ...

CRA then noted that since the accrued capital gain on the 25 common shares of OPCO held by Holdco A and B immediately before the stock dividend exceeded the $100,000 stock dividend amount and this $100,000 amount, in turn, did not exceed the amount of income earned or realized that could reasonably be considered to contribute to the capital gain that could be realized on the 25 common shares immediately before the stock dividend, then by virtue of s. 55(2.3)(a), the amount of the $100,000 stock dividend received by Holdco A and Holdco B would will be deemed to be a separate dividend for the purposes of subsection 55(2), and by virtue of s. 55(2.3)(b), OPCO's safe income that contributed to the capital gain on the 25 common shares of the capital stock of OPCO held respectively by Holdco A and Holdco B would be reduced by $100,000. ...

This result accords with the observation that the direct safe income of $1,000 transferred to the Newco shares contributes to the gain on the Newco shares, and it should not be considered as contributing to the gain on the Opco shares that are left behind (the only asset of Opco is one with no ACB, so that all the unrealized gain remains in the assets retained by Opco.) ...

Q.17(c) After noting that it “generally accepts that the time at which an amount becomes payable to a recipient is the earlier of the time of payment or the time at which the recipient is entitled to enforce payment of it,” and that “a taxpayer does not have to be a beneficiary of a trust throughout the taxation year of the trust in which an amount becomes payable to the taxpayer in order for that amount to be included in computing the beneficiary's income pursuant to subsection 104(13),” CRA found that since: the $5,000 was paid on September 20, 20X1 by the Trust to Holdco, who was a beneficiary of the Trust at that time, that amount may therefore be considered to have become payable to Holdco on that date for the purposes of paragraph 104(13)(a). ...

Rulings Including that the Proposed Transactions, in and of themselves, will not be considered to result in a disposition of property or a significant increase in interest described in any of ss. 55(3)(a)(i) to (v). ...

For the purposes of s. 55(3.1)(b)(i)(A)(II), in determining whether 10% or more of the FMV of the Foreign Spinco common shares is derived from shares of TC or DC “any indebtedness of Foreign Spinco that is not a secured debt and that is not a debt related to a particular property will be considered to reduce the FMV of each property of Foreign Spinco pro rata in proportion to the relative FMV of all property of Foreign Spinco.” ...