Section 86

Subsection 86(1) - Exchange of shares by a shareholder in course of reorganization of capital

Cases

Special Risks Holdings Inc. v. The Queen, 86 DTC 6035, [1986] 1 CTC 201 (FCA)

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 251 - Subsection 251(1) - Paragraph 251(1)(c) relationship enabling one party to dictate terms 144
Tax Topics - Income Tax Act - Section 84 - Subsection 84(9) 160

See Also

Dunstan v. Young, Austen & Young Ltd., [1989] BTC 77 (C.A.)

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Administrative Policy

2017 Ruling 2016-0679281R3 - subsections 84(4.1) and 86(1)

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition change of common shares into multiple-voting common shares not a disposition 158

2016 Ruling 2016-0635101R3 - 55(3)(a) Spin-Off to Use Parent Losses

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 13 - Subsection 13(21.1) - Paragraph 13(21.1)(a) where land transferred under s. 85(1) along with terminal loss building, elect high with a view to s. 13(21.1)(a) applying to reduce the land proceeds to ACB 177
Tax Topics - Income Tax Act - Section 55 - Subsection 55(3) - Paragraph 55(3)(a) 55(3)(a) spin-off of property already subject to sale agreement to parent before closing date 548
Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) - Paragraph 85(1)(a) elected amount deterines proceeds before s. 13(21.1)(a) grind 197

2016 Ruling 2015-0623731R3 - Subsections 55(2) and (2.1)

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 55 - Subsection 55(3) - Paragraph 55(3)(a) requirement to pro-rate PUC 530
Tax Topics - Income Tax Act - Section 80 - Subsection 80(1) - Forgiven Amount policy on set-off of unequal redemption notes does not extend beyond a butterfly reorg 389

2015 Ruling 2014-0558831R3 - No-type of property spin-off butterfly

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 55 - Subsection 55(1) - Distribution prior drop-down of assets to Newco/split of DC manager's business/CEC proration/replacement option issuance as boot 1106
Tax Topics - Income Tax Act - Section 7 - Subsection 7(1.4) replacement stock options issued by Spinco treated as boot 108
Tax Topics - Income Tax Act - Section 85 - Subsection 85(1) - Paragraph 85(1)(d) proration of CEC preliminary to butterfly 154
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition splitting of fee for management of 2 divisions not a disposition of contract 139

2014 Ruling 2014-0533601R3 - Spin-off butterfly - subsection 55(2)

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 186 - Subsection 186(1) matching of PUC of cross-shareholdings to match Part IV tax 144
Tax Topics - Income Tax Act - Section 55 - Subsection 55(1) - Distribution spin-off by CCPC under Plan of Arrangement of two businesses/matching of PUC of cross-shareholdings to match Part IV tax/leased property as business property 916
Tax Topics - Income Tax Act - Section 84 - Subsection 84(1) stated capital distribution effected by set-off 69

2013 Ruling 2013-0491651R3 - Cross-Border Butterfly

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 55 - Subsection 55(1) - Distribution cross-border b/f with 3-party exchange, cash-out of ineligible shareholders, proportionate allocation of foreign spinco debt, pension liability classification, prelim non-series dividend 945
Tax Topics - Income Tax Act - Section 55 - Subsection 55(3.1) - Paragraph 55(3.1)(a) preliminary LP acquisition, cross-border debt repayments and dividend: not part of series 212
Tax Topics - Income Tax Act - Section 55 - Subsection 55(3.1) - Paragraph 55(3.1)(b) - Subparagraph 55(3.1)(b)(i) cross-border b/f with 3-party exchange, pro rata application of upper tier debt, cash-out of ineligible shareholders 457

7 October 2011 Roundtable, 2011-0412191C6 - Sec. 86 - Reorganisation of the Capital of a Corp.

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 51 - Subsection 51(1) s. 51, not s. 86, applies to conversion 39

2010 Ruling 2010-0373801R3 - Conversion from a BV to a DC

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2006 Ruling 2006-0177342R3 - Creation of an income trust

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10 April 2001 External T.I. 2001-007440

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28 Aug. 89 T.I. (Jan. 90 Access Letter, ¶1080)

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ATR-22R (14 April 89)

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87 C.R. - Q.67

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 51 - Subsection 51(1) automatic conversion 9

Articles

Paul Tamaki, "Book4Golf: Convertible Share Financing", Corporate Finance, Vol VII, No. 2, 2000, p. 731

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Ewens, "Reorganizations of Capital: Section 86", 1995 Canadian Tax Journal, Vol. 43, No. 3, p. 783.

Smith, "Corporate Restructuring Issues: Public Corporations", 1990 Corporate Management Tax Conference Report, pp. 6:28-6:32.

Subsection 86(2) - Idem [Exchange of shares by a shareholder in course of reorganization of capital]

See Also

Mady v. The Queen, 2017 TCC 112

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 74.5 - Subsection 74.5(11) transfer from wife to higher-income husband was infused with his income-splitting purpose (as well as regulatory breach if she didn’t transfer) 355
Tax Topics - General Concepts - Ownership wife and children did not acquire beneficial interest in shares the taxpayer was to transfer to them, under tax plan, until the share transfer occurred 253
Tax Topics - General Concepts - Fair Market Value - Shares arm’s length sales price established FMV for closing-date internal transfer of same shares 470
Tax Topics - Income Tax Act - Section 69 - Subsection 69(1) - Paragraph 69(1)(b) - Subparagraph 69(1)(b)(i) contemporaneous arm’s length sale price established that shares previously transferred at undervalue 468
Tax Topics - Income Tax Act - Section 163 - Subsection 163(2) was not responsible under s. 163(2) for the unbeknownst sharp practice of his tax advisor 658
Tax Topics - General Concepts - Price Adjustment Clause no jurisdiction to comment on application of price adjustment clause where the affected taxpayers are not appellants 223

Administrative Policy

1996 Corporate Management Tax Conference Round Table, Q. 13 (C.T.O. "Benefit of Conversion")

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Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 51 - Subsection 51(2) 64

24 March 1993 T.I. (Tax Window, No. 30, p. 1, ¶2490)

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1993 A.P.F.F. Round Table Q. 6

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Subsection 86(3) - Application

Administrative Policy

1995 Tax Executives Institute Round Table Q. 21 (C.T.O. Fax Service Doc. No. 9510750)

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