I-3 - Taxation Act

Section 114.1 Disposition versions

2006-03-01

114.1. Section 113 does not apply to a loan made or a debt that arose in respect of a trust where

(a)  the lender or creditor is a private corporation;

(b)  the corporation is the settlor and sole beneficiary of the trust;

(c)  the sole purpose of the trust is to facilitate the purchase and sale of the shares of the corporation, or of another corporation related to the corporation, for an amount equal to their fair market value at the time of the purchase or sale, as the case may be, from or to the employees of the corporation or of the related corporation, other than employees who are specified employees of the corporation or of another corporation related to the corporation, as the case may be; and

(d)  at the time the loan was made or the indebtedness arose, bona fide arrangements were made for repayment of the loan or debt within a reasonable time.

2000, c. 5, s. 39.