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

Section 726.14r2 Disposition versions

2012-09-01

726.14R2. For the purposes of section 726.14 of the Act and subject to section 726.14R3, a prescribed share is also a share of the capital stock of a particular corporation, where the share is

(a)  a particular share owned by a person and issued by the particular corporation to that person or a spouse or parent of that person as part of an arrangement or, where the person is a trust described in subparagraph a of the first paragraph of section 653 of the Act and in the second paragraph of that section, to the person who created the trust or by whose will the trust was created or, where the person is a corporation, to another person owning all of the issued and outstanding shares of the capital stock of the corporation or to a spouse or parent of that other person, and where all of the following conditions are met:

i.  the main purpose of the arrangement was to allow any increase in the value of the property of the particular corporation to accrue to other shares that, at the time of their issue, would have been prescribed shares if this chapter had been read without reference to this section,

ii.  at the time of the issue of the particular share or at the end of the arrangement, the other shares were owned by

(1)  the person to whom the particular share was issued, referred to in this paragraph as the “original holder”,

(2)  a person with whom the original holder did not deal at arm’s length,

(3)  a trust none of the beneficiaries of which was a person other than the original holder or a person who did not deal at arm’s length with the original holder,

(4)  employees of the particular corporation or of a corporation controlled by the particular corporation,

(5)  any combination of persons each of whom is described in any of subparagraphs 1 to 4;

(b)  a share issued by a mutual fund corporation.

s. 726.14R2; O.C. 1549-88, s. 23; O.C. 91-94, s. 50; O.C. 1631-96, s. 32; O.C. 1707-97, s. 49; O.C. 1466-98, s. 126; O.C. 134-2009, s. 1.