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CRA noted: s. 110.6(14)(f)(i) provided that, for purposes of the requirement in s. 110.6(1)(b) that the shares must not have not been owned during the 24 months preceding their disposition (the “determination time”) by anyone other than the disposing individual or a related person or partnership, such shares will be considered to have been so owned prior to their issuance unless they were issued as consideration for other shares (the “original shares”). however, s. 110.6(1)(e)(i) required that throughout the period beginning 24 months before the determination time and ending at the time of the share exchange (the “substitution”), the original shares were not owned by anyone other than the individual or a related person or partnership; and that s. 110.6(1)(e)(ii) required that the original share had qualified under the asset and activity test described under para. ...

For example, instances where a trust pays the tuition fees or repays a loan taken up by another person are to be considered indirect distributions by the trust. ...

In the case of the downstream mergers, regarding the shares of the parent, the parent’s shareholder was treated as the vendor thereof and, regarding the acquisition of shares of the subsidiary, there was considered to be no vendor and the purchaser was treated as being such shareholder. ...

Rulings Including that the proposed transactions will not be considered in themselves to result in a disposition or increase in interest described in any of ss. 55(3)(a)(i) to (v) and, in particular, the transaction in 1 above will not be described in s. 55(3)(a)(ii) by virtue of s. 55(3.01)(g). ...

Assuming the Canadian taxpayer is expected to solely be a debtor under the Cash PA, would the Cash PA be considered a “notifiable transaction” if the Canadian taxpayer withholds (and undertakes the relevant compliance) at the rate of withholding tax that would be applicable as a result of the application of the back-to-back loan rules in subsection 212(3.2) (so that no reduction in withholding tax rates is expected to be achieved)? ...

Rulings S. 55(2) will not apply to the receipt of the First Annual Dividends, Interim Income Dividends or Second Annual Dividends, provided that their full amount does not exceed the amount of 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 shares of the corporation on which the dividend was received at the safe income determination time for the transaction, event or series of transactions that includes the receipt of the dividend. ...

Rulings The transfers from the Direct Subtrusts to Trust A in 2 will not be considered a "disposition" by virtue of s. 248(1) – disposition, (f)(v), and Trust A will be deemed, to be the same trust as, and a continuation of, each of the Direct Subtrusts by virtue of s. 248(25.1); therefore the ACB of Taxpayer's interest in Trust A will be equal to the aggregate ACB of Taxpayer's interests in the Direct Subtrusts before the transfer. 5 and 6, and 10 (and the subsequent merger in 11) will be qualifying exchanges. ...

To the extent that a portion of the capital interest to be so distributed can reasonably be considered to relate to a deemed taxable dividend received by the Trust (whether an eligible dividend or non eligible dividend), the trustees will pass a resolution for all or a portion of the balance to be distributed as an eligible dividend to the extent of eligible dividends received by the Trust in 11 and as a non-eligible dividend for any remainder, with a s. 104(19) designation to be made. ...

2012 Ruling 2012-0451421R3- Purchase of Target and bump-- summary under Paragraph 88(4)(b) Summary Under Tax Topics- Income Tax Act- Section 88- Subsection 88(4)- Paragraph 88(4)(b) Target Amalco 2 formed post-AOC and pre-bump (occurring on amalgamation of Target Amalco 2 with Bidco) is a continuation its predecessors for s. 88(1)(c) midamble purposes/prepackaging transactions before formation of Target Amalco 2/Target asset buyers agree not to purchase Target shares After giving effect to preliminary transactions relating to the Bidco structure: a non-resident public company (Parent) is the sole shareholder of another non-resident corporation (Parent Subco), which is the principal shareholder of New Holdco (a taxable Canadian corporation and not a public corporation), which holds all the shares of Bid Holdco (a taxable Canadian corporation), which holds Bidco, a taxable Canadian corporation the only significant investor in the shares of Target (a taxable Canadian corporation and a listed public corporation) is Investor, which in a Lock-Up Agreement has agreed for itself and all related persons not to acquire any shares of Target, certain Buyers referred to below or Parent, or to acquire "Restricted Assets," within the following X years; Target assets following the acquisitions below will form only a small part of Parent's business or that of the 1st and 3rd Buyer described below three "Buyers" (the first and third of which is partly owned by Investor) have agreed to buy certain Target assets under a Plan of Arrangement and have represented to Bidco that they do not hold (or, in the case of the second Buyco, hold no more than X% thereof) and will not acquire any Target common shares as part of the series of transactions, and will not within X years allow a "Restricted Person" to acquire directly or indirectly any transferred asset or any property substituted (for purposes of s. 88(1)(c)(vi)) for a transferee asset, other than securities listed on a stock exchange, as to which it will instruct each underwriter engaged by it not to accept orders from Restricted Persons Under the proposed transactions: Target common shares of dissenters will be transferred to Bidco for their fair value notes of Target will be amended, with Parent paying consent fees and with the agreement of Target to reimburse it therefor; Parent and Parent Subco will guarantee payment of the amended notes Target and a wholly-owned Canadian subsidiary thereof (Subco 1) will amalgamate to form Target Amalco (the Target Amalgamation) Target Amalco will implement various "packaging transactions" under which it will transfer assets on a rollover basis to newly-formed Canadian subsidiaries (New Subcos), including New Target Bidco will use share subscription proceeds indirectly derived from money borrowed by Parent Subco from third party lenders (who are believed to not be persons described in s. 88(1)(c)(vi)(B)) to make a loan to Target Amalco to repay credit facilities at the "Transfer Effective time" under the Plan of Arrangement, Bidco will acquire all the Target Amalco common shares for cash; and outstanding Target Amalco management stock options, restricted share units and deferred units will be disposed of to Target Amalco for cash payments Target Amalco will elect to cease to be a public corporation the stated capital of the shares of Subco 2 (a taxable Canadian subsidiary of Target Amalco) and New Target will be reduced Target Amalco, Subco 2 and New Target will amalgamate to form Target Amalco 2 (the Target Amalco Amalgamation) following a reduction of the stated capital of Target Amalco 2's shares, Bidco and Target Amalco 2 will amalgamate to form Amalco (the Amalgamation) various debts of Subco 3 (a subsidiary of Amalco) will be redonominated into Canadian dollars various transactions respecting distributions of stated capital by Amalco up the chain and loan transfers are not described here; such stated capital distributions will include the distribution of proceeds derived from the disposition by Subco 15 (a subsidiary of Subco 3) and Subco 16 (a subsidiary of Subco 15) of properties to a member of the Parent group the Buyers will exercise their purchase rights by acquiring subsidiaries of Amalco including New Subcos Target Amalco and its subsidiaries will elect not to have s. 256(9) apply with respect to the acquisition of control by Bidco Amalco will make a s. 88(1)(d) designation in respect of each non-depreciable capital property acquired by it on the amalgamation of Bidco and Target Amalco 2 Rulings: bump ruling:- including that pursuant to s. 88(4), Target Amalco 2 will be the same corporation as Subco 2, New Target and Target Amalco for the purposes of determining whether property was capital property owned by Target Amalco 2 on the Effective Date and for purposes of determining when Bidco last acquired control of Target Amalco 2 no shareholder of Parent will be considered to be a specified shareholder of Target or Target Amalco at any time prior to the acquisition of control of Target Amalco by Bidco for the purposes of clause 88(1)(c)(vi)(B)(I) solely as a result of Bidco's conditional right under the Arrangement Agreement to acquire the shares of the capital stock of Target or Target Amalco the proposed transactions will not, in and by themselves, result in the application of s. 69(11) Parent guarantees of the amended notes of Target will not constitute substituted property as described in s. 88(1)(c.3) s. 212.3 will not apply to the acquisition of the shares of Target Amalco by Bidco provided the acquisition occurs before 2013 and is completed in accordance with the terms of the Arrangement Agreement s. 212.3(2) will not apply to an investment made in a subject corporation by Target Amalco, Target Amalco 2 or Amalco as a result of the Target Amalgamation, the Target Amalco Amalgamation and the Amalgamation s. 212.3(2) will apply to Bidco and to Bid Holdco to the extent that their acquisition of Target Amalco 2 shares and Amalco shares, respectively, resulting from the application of s. 87(4) to the Target Amalco Amalgamation and the Amalgamation, respectively, fall within the meaning of "investment" as described in s. 212.3(10)(f) ...

For these purposes, any indebtedness of Foreign SpinCo 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. ...