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I-3 - Taxation Act

Section 49.4
Disposition versions

Full text
49.4. For the purposes of this division, the rules provided for in the fourth paragraph apply where a taxpayer disposes of rights under an agreement referred to in section 48 to acquire securities of the particular qualifying person that made the agreement or of a qualifying person with which the particular qualifying person does not deal at arm’s length, which rights and securities are referred to in this section as the “exchanged option” and the “old securities”, respectively, and where
(a)  the taxpayer receives no consideration for the disposition of the exchanged option other than rights under an agreement with any of the following persons to acquire securities of any such person or of a qualifying person with which any such person does not deal at arm’s length, which rights and securities are referred to in this section as the “new option” and the “new securities”, respectively:
i.  the particular qualifying person,
ii.  a qualifying person with which the particular qualifying person does not deal at arm’s length immediately after the disposition of the exchanged option,
iii.  a corporation formed on the amalgamation or merger of the particular qualifying person and one or more other corporations,
iv.  a qualifying person with which the corporation referred to in subparagraph iii does not deal at arm’s length immediately after the disposition of the exchanged option,
v.  a mutual fund trust to which the particular qualifying person has transferred property in circumstances to which Title I.2 of Book VI applied, or
vi.  if the disposition occurs before 1 January 2013 and each of the old securities were an investment in a SIFT wind-up entity that was at the time of the disposition a mutual fund trust, a SIFT wind-up corporation in respect of the SIFT wind-up entity; and
(b)  the amount by which the total value of the new securities immediately after the disposition exceeds the amount determined under the second paragraph does not exceed the amount by which the total value of the old securities immediately before the disposition exceeds the amount determined under the third paragraph.
The first amount to which subparagraph b of the first paragraph refers is equal to the total amount payable by the taxpayer to acquire the new securities under the new option.
The second amount to which subparagraph b of the first paragraph refers is equal to the amount payable by the taxpayer to acquire the old securities under the exchanged option.
The rules to which the first paragraph refers are as follows:
(a)  the taxpayer is deemed, except for the purposes of subparagraph ii of paragraph d of section 58.0.2, as it read before being repealed, not to have disposed of the exchanged option and not to have acquired the new option;
(b)  the new option is deemed to be the same option as, and a continuation of, the exchanged option; and
(c)  the person described in any of subparagraphs ii to v of subparagraph a of the first paragraph is deemed to be the same person as, and a continuation of, the particular qualifying person.
1986, c. 19, s. 8; 1989, c. 77, s. 12; 1993, c. 16, s. 29; 1997, c. 3, s. 71; 2001, c. 53, s. 18; 2003, c. 2, s. 18; 2010, c. 25, s. 10; 2011, c. 34, s. 18.
49.4. For the purposes of this division, the rules provided for in the fourth paragraph apply where a taxpayer disposes of rights under an agreement referred to in section 48 to acquire securities of the particular qualifying person that made the agreement or of a qualifying person with which the particular qualifying person does not deal at arm’s length, which rights and securities are referred to in this section as the “exchanged option” and the “old securities”, respectively, and where
(a)  the taxpayer receives no consideration for the disposition of the exchanged option other than rights under an agreement with any of the following persons to acquire securities of any such person or of a qualifying person with which any such person does not deal at arm’s length, which rights and securities are referred to in this section as the “new option” and the “new securities”, respectively:
i.  the particular qualifying person,
ii.  a qualifying person with which the particular qualifying person does not deal at arm’s length immediately after the disposition of the exchanged option,
iii.  a corporation formed on the amalgamation or merger of the particular qualifying person and one or more other corporations,
iv.  a qualifying person with which the corporation referred to in subparagraph iii does not deal at arm’s length immediately after the disposition of the exchanged option,
v.  a mutual fund trust to which the particular qualifying person has transferred property in circumstances to which Title I.2 of Book VI applied, or
vi.  if the disposition occurs before 1 January 2013 and each of the old securities were an investment in a SIFT wind-up entity that was at the time of the disposition a mutual fund trust, a SIFT wind-up corporation in respect of the SIFT wind-up entity; and
(b)  the amount by which the total value of the new securities immediately after the disposition exceeds the amount determined under the second paragraph does not exceed the amount by which the total value of the old securities immediately before the disposition exceeds the amount determined under the third paragraph.
The first amount to which subparagraph b of the first paragraph refers is equal to the total amount payable by the taxpayer to acquire the new securities under the new option.
The second amount to which subparagraph b of the first paragraph refers is equal to the amount payable by the taxpayer to acquire the old securities under the exchanged option.
The rules to which the first paragraph refers are as follows:
(a)  the taxpayer is deemed, except for the purposes of subparagraph ii of paragraph d of section 58.0.2, not to have disposed of the exchanged option and not to have acquired the new option;
(b)  the new option is deemed to be the same option as, and a continuation of, the exchanged option; and
(c)  the person described in any of subparagraphs ii to v of subparagraph a of the first paragraph is deemed to be the same person as, and a continuation of, the particular qualifying person.
1986, c. 19, s. 8; 1989, c. 77, s. 12; 1993, c. 16, s. 29; 1997, c. 3, s. 71; 2001, c. 53, s. 18; 2003, c. 2, s. 18; 2010, c. 25, s. 10.
49.4. For the purposes of this division, the rules provided for in the fourth paragraph apply where a taxpayer disposes of rights under an agreement referred to in section 48 to acquire securities of the particular qualifying person that made the agreement or of a qualifying person with which the particular qualifying person does not deal at arm’s length, which rights and securities are referred to in this section as the “exchanged option” and the “old securities”, respectively, and where
(a)  the taxpayer receives no consideration for the disposition of the exchanged option other than rights under an agreement with any of the following persons to acquire securities of any such person or of a qualifying person with which any such person does not deal at arm’s length, which rights and securities are referred to in this section as the “new option” and the “new securities”, respectively:
i.  the particular qualifying person,
ii.  a qualifying person with which the particular qualifying person does not deal at arm’s length immediately after the disposition of the exchanged option,
iii.  a corporation formed on the amalgamation or merger of the particular qualifying person and one or more other corporations,
iv.  a qualifying person with which the corporation referred to in subparagraph iii does not deal at arm’s length immediately after the disposition of the exchanged option, and
v.  a mutual fund trust to which the particular qualifying person has transferred property in circumstances to which Title I.2 of Book VI applied; and
(b)  the amount by which the total value of the new securities immediately after the disposition exceeds the amount determined under the second paragraph does not exceed the amount by which the total value of the old securities immediately before the disposition exceeds the amount determined under the third paragraph.
The first amount to which subparagraph b of the first paragraph refers is equal to the total amount payable by the taxpayer to acquire the new securities under the new option.
The second amount to which subparagraph b of the first paragraph refers is equal to the amount payable by the taxpayer to acquire the old securities under the exchanged option.
The rules to which the first paragraph refers are as follows:
(a)  the taxpayer is deemed, except for the purposes of subparagraph ii of paragraph d of section 58.0.2, not to have disposed of the exchanged option and not to have acquired the new option;
(b)  the new option is deemed to be the same option as, and a continuation of, the exchanged option; and
(c)  the person described in any of subparagraphs ii to v of subparagraph a of the first paragraph is deemed to be the same person as, and a continuation of, the particular qualifying person.
1986, c. 19, s. 8; 1989, c. 77, s. 12; 1993, c. 16, s. 29; 1997, c. 3, s. 71; 2001, c. 53, s. 18; 2003, c. 2, s. 18.
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