I-3, r. 1 - Regulation respecting the Taxation Act

Section 395r2 Disposition versions

2012-09-01

395R2. For the purposes of section 395R1, a prescribed share does not include a share of the capital stock of a corporation

(a)  that is issued after 31 December 1982, pursuant to an offering or agreement in writing made on or before 31 December 1982, or in accordance with a prospectus, registration statement or similar document that was filed on or before that date with a public authority in Canada in conformity with the laws of Canada or of any province and where required by law, accepted for filing by that authority;

(b)  that would be a prescribed share solely under one or more terms or conditions of an agreement, where those are not effective or exercisable until the disability, death or bankruptcy of the person to whom the share is issued;

(c)  that

i.  is convertible under its terms or conditions into one or more shares of a class of the capital stock of the corporation for no consideration other than the share or shares,

ii.  is described in paragraph a of section 395R1 solely because it is to be cancelled on the conversion within 5 years from the date of its issue, because its paid-up capital is to be reduced on the conversion within that term or because those 2 conditions apply, and

iii.  is not described in paragraph c of section 395R1; or

(d)  that

i.  may have a share substituted or exchanged for it pursuant to its terms or conditions or those of an agreement in existence at the time of its issue, if no consideration is received or to be received for the share in relation to the substitution or exchange other than the share substituted or exchanged for it,

ii.  is described in paragraph a of section 395R1 solely because it is to be redeemed, acquired or cancelled on the substitution or exchange within 5 years from the date of its issue, and

iii.  is not a share in respect of which paragraph f of section 395R1 applies.

s. 395R3; O.C. 2509-85, s. 33; O.C. 1707-97, s. 98; O.C. 134-2009, s. 1.