I-3 - Taxation Act

Section 21.11.13 Disposition versions

2006-03-01

21.11.13. For the purposes of paragraph a of section 21.11.11 and paragraph c of section 21.11.12,

(a)  an agreement in respect of a share of the capital stock of a corporation shall be read without reference to that part of the agreement under which a person agrees to acquire the share for an amount

i.  in the case of a share, other than a share that would, but for that part of the agreement, be a taxable preferred share, the agreement in respect of which provides that the share is to be acquired within 60 days after the date on which the agreement was entered into, that does not exceed the greater of the fair market value of the share at the time the agreement was entered into, determined without reference to the agreement, and the fair market value of the share at the time of the acquisition, determined without reference to the agreement;

ii.  in any other case, that does not exceed the fair market value of the share at the time of the acquisition, determined without reference to the agreement, or for an amount determined by reference to the assets or earnings of the corporation where such determination may reasonably be considered to be used to determine an amount that does not exceed the fair market value of the share at the time of the acquisition, determined without reference to the agreement;

(b)  the expression “shareholder” includes a shareholder of a shareholder.

1990, c. 59, s. 23; 1997, c. 3, s. 71.