I-3 - Taxation Act

Section 462.12.1 Disposition versions

2006-03-01

462.12.1. For the purposes of section 462.12, one of the main purposes of a transfer or loan by an individual to a corporation is not considered to be to benefit, either directly or indirectly, a designated person in respect of the individual, where

(a)  the only interest that the designated person has in the corporation is a beneficial interest in shares of the corporation held by a trust;

(b)  by the terms of the trust, the designated person may not receive or otherwise obtain the use of any of the income or capital of the trust while he is a designated person in respect of the individual; and

(c)  the designated person has not received or otherwise obtained the use of any of the income or capital of the trust, and no deduction has been made by the trust in computing its income under paragraphs a and b of section 657 or section 657.1 in respect of amounts paid or payable to, or included in the income of, that person while he was a designated person in respect of the individual.

1989, c. 77, s. 53; 1996, c. 39, s. 273; 1997, c. 3, s. 71.