I-3 - Taxation Act

Section 21.9.2 Disposition versions

2006-03-01

21.9.2. The rule provided by section 21.8 does not apply, in the case provided for in paragraph b of section 21.9.1, where the owner’s right could be exercised by reason of a default under the terms or conditions of the share or any agreement that related to, and was entered into at the time of, the issuance of the share.

The same applies, in the case provided for in paragraph c of the said section 21.9.1, where

(a)  the share described in subparagraph i of that paragraph c is

i.  a share issued to a corporation that was, at the time of issue,

(1)  a corporation referred to in any of paragraphs a to e of the definition of “specified financial institution” in section 1, or

(2)  a corporation controlled by one or more corporations referred to in subparagraph 1,

ii.  a share acquired from a person that was, at the time of acquisition, a corporation referred to in subparagraph 1 or 2 of subparagraph i, or

iii.  a share acquired under an agreement in writing made before 24 October 1979; and

(b)  the share described in subparagraph ii of that paragraph c is

i.  a share described in section 21.6.1,

ii.  a share acquired from a person that was, at the time of acquisition, a corporation referred to in any of paragraphs a to f of the definition of “specified financial institution” in section 1,

iii.  a share acquired in an acquisition that was not subject to an undertaking, referred to in section 740.2, given after 12 November 1981, or

iv.  a share acquired under an agreement in writing made before 24 October 1979 or an agreement referred to in section 21.5.3.

For the purposes of subparagraph 2 of subparagraph i of subparagraph a of the second paragraph, one corporation is controlled by another corporation if more than 50% of its issued share capital having full voting rights under all circumstances belongs to the other corporation, to persons with whom the other corporation does not deal at arm’s length, or to the other corporation and persons with whom the other corporation does not deal at arm’s length.

1984, c. 15, s. 10; 1990, c. 59, s. 18; 1997, c. 3, s. 71; 1998, c. 16, s. 16; 2001, c. 53, s. 7.