I-3 - Taxation Act

Section 726.4.17.12 Disposition versions

2006-03-01

726.4.17.12. A corporation which makes a public issue of shares, including flow-through shares, the receipt for the final prospectus or the exemption from filing a prospectus of which was granted after 2 May 1991 may renounce, in respect of the share issue, an amount not exceeding the amount determined, in respect of that share issue, by the formula

(A × B) / C.

For the purposes of the formula set forth in the first paragraph,

(a)  A is the lesser of

i.  the aggregate of the expenses incurred by the corporation, in the course of the share issue and out of the proceeds thereof, at or before the time the renunciation is made and, where such is the case, the reasonable additional expenses the corporation expects to incur after that time, in the course of the share issue and out of the proceeds thereof, and

ii.  15% of the aggregate of the proceeds of the share issue at or before the time the renunciation is made and, where such is the case, the additional proceeds the corporation expects to receive for the additional shares it intends to issue after that time as part of the share issue;

(b)  B is the aggregate of all amounts each of which is either an expense referred to in subparagraph i of paragraph a of section 726.4.10 in respect of an individual and incurred, at or before the time the renunciation is made, out of the proceeds of the share issue, or any amount that may reasonably be expected to be such an expense in respect of an individual incurred after that time out of the proceeds of the share issue;

(c)  C is the amount by which the aggregate of the proceeds of the share issue at or before the time the renunciation is made and, where such is the case, the additional proceeds the corporation expects to receive for the additional shares it intends to issue after that time as part of the share issue, exceeds the amount used for A.

Any renunciation made by a corporation under the first paragraph in respect of a share issue is valid only if it is made, in prescribed form, on 31 December in the calendar year in which the share issue commenced or within 60 days thereafter.

The first paragraph does not apply in respect of a public issue of shares in respect of which the application for a receipt for the preliminary prospectus or the application for an exemption from filing a prospectus, as the case may be, is made after 12 June 2003, in relation to a flow-through share acquired before 31 March 2004.

1992, c. 1, s. 41; 1993, c. 19, s. 35; 1995, c. 1, s. 59; 1997, c. 3, s. 71; 2000, c. 5, s. 154; 2004, c. 21, s. 115; 2005, c. 23, s. 72.