I-3 - Taxation Act

Section 1129.27.10.3 Disposition versions

2019-06-19

1129.27.10.3. Subject to section 1129.27.10.4, where a class “B” share of the capital stock of the Corporation is redeemed or purchased by agreement by the Corporation less than seven years after its issue date, the individual to whom section 776.1.5.0.15.4 applies, or to whom section 776.1.5.0.15.2 applies if the share was issued as a consequence of a promise to purchase by way of exchange, or, as the case may be, the person to whom the share devolved as a consequence of the individual’s death, is required to pay, for the taxation year in which the redemption or purchase by agreement is made, tax under this Part equal to the amount determined by the formula

[(2,556 – A) / 2,556] × B.

In the formula in the first paragraph,

(a)  A is the number of days in the period that begins on the issue date of the share referred to in the first paragraph or, if the share was issued as a consequence of a promise to purchase by way of exchange, on the day that promise was accepted by the Corporation and that ends on the day the share is redeemed or purchased by agreement; and

(b)  B is the lesser of the amount paid by the Corporation for the redemption or purchase by agreement of the share and,

i.  if the share was issued as a consequence of a promise to purchase by way of exchange, the product obtained by multiplying by 10% the amount determined, under the third paragraph of section 776.1.5.0.15.2, in respect of the value of the consideration that the individual has undertaken to pay under the promise for the purchase of the share, or

ii.  in any other case, the product obtained by multiplying by 10% the amount determined, under the third paragraph of section 776.1.5.0.15.4, in respect of the value of the consideration that the individual has paid for the purchase of the share.

2019, c. 14, s. 450.