I-3 - Taxation Act

Section 1122.1 Disposition versions

2006-03-01

1122.1. Notwithstanding section 1122, a corporation is not a non-resident-owned investment corporation in any taxation year that ends after the earlier of,

(a)  the first time after 27 February 2000 at which the corporation effects an increase in capital; and

(b)  the end of the corporation’s last taxation year that begins before 1 January 2003.

For the purposes of subparagraph a of the first paragraph, an increase in capital in respect of a corporation means a transaction, other than a transaction carried out pursuant to an agreement in writing made before 28 February 2000 and referred to in this paragraph as a “specified transaction”, in the course of which the corporation issues additional shares of its capital stock or incurs indebtedness, if the transaction has the effect of increasing the aggregate of the corporation’s liabilities and the fair market value of all the shares of its capital stock to an amount that is substantially greater than that aggregate would have been on 27 February 2000 if all specified transactions had been carried out before that date.

2004, c. 8, s. 201.