I-3 - Taxation Act

Section 485.22 Disposition versions

2006-03-01

485.22. Where there is a winding-up of a subsidiary to which sections 556 to 564.1 and 565 apply and, as a consequence of the winding-up, a distress preferred share issued by the subsidiary and owned by the parent, or a distress preferred share issued by the parent and owned by the subsidiary, is settled at any time without any payment of an amount or by the payment of an amount that is less than the principal amount of the share,

(a)  where there was no payment or the payment was less than the adjusted cost base of the share to the parent or the subsidiary, as the case may be, immediately before that time, for the purpose of applying the provisions of this Part to the issuer of the share, an amount equal to the adjusted cost base to the parent or to the subsidiary, as the case may be, is deemed to be paid at that time in satisfaction of the principal amount of the share; and

(b)  for the purpose of applying sections 485 to 485.18 to the share, where property is distributed at any time in circumstances to which the first paragraph of section 557 or section 558 applies and the share is settled as a consequence of the distribution, the share is deemed to have been settled immediately before the time that is immediately before the time of the distribution and not at any later time.

1996, c. 39, s. 142; 1997, c. 3, s. 71.