I-3 - Taxation Act

Section 308.2.2 Disposition versions

2019-06-19

308.2.2. For the purposes of section 308.2.1, the following rules apply:

(a)  “unrelated person” means a person, other than the particular dividend-recipient corporation, to whom that corporation is not related or a partnership any member of which, other than the particular dividend-recipient corporation, is not related to that corporation;

(b)  a corporation that is formed by an amalgamation of two or more other corporations is deemed to be a continuation of each of the other corporations;

(c)  proceeds of disposition of a property are to be determined without reference to

i.  “deemed to be included in the proceeds of disposition of the share under paragraph b of section 308.1 or” in section 251, and

ii.  Chapter V of Title X;

(d)  notwithstanding any other provision of this Act, where a person not resident in Canada disposes of a property in a taxation year and the gain or loss from the disposition is not included in computing the person’s taxable income earned in Canada for the year, the person is deemed to have disposed of the property for proceeds of disposition that are less than its fair market value unless, under the income tax laws of the country in which the person is resident, the gain or loss is computed as if the property were disposed of for proceeds of disposition that are not less than its fair market value and the gain or loss so computed is recognized for the purposes of those laws;

(e)  a significant increase in the total direct interest in a corporation that would, but for this paragraph, be described in paragraph b of section 308.2.1 is deemed not to be described in that paragraph if the increase is the result of the issuance of shares of the capital stock of the corporation for consideration that consists solely of money and the shares are redeemed, acquired or cancelled by the corporation before the dividend is received;

(f)  a disposition of property that would, but for this paragraph, be described in paragraph a of section 308.2.1, or a significant increase in the total direct interest in a corporation that would, but for this paragraph, be described in paragraph b of section 308.2.1, is deemed not to be described in either of those paragraphs if

i.  the dividend-payer corporation was related to the particular dividend-recipient corporation immediately before the dividend was received,

ii.  the dividend-payer corporation did not, as part of the series of transactions or events that includes the receipt of the dividend, cease to be related to the particular dividend-recipient corporation,

iii.  the disposition or increase occurred before the dividend was received,

iv.  the disposition or increase is the result of the disposition of shares to, or the acquisition of shares of, any corporation, and

v.  at the time the dividend was received, all the shares of the capital stock of the dividend-payer corporation and of the particular dividend-recipient corporation were owned by the corporation referred to in subparagraph iv, a corporation that controls the corporation referred to in that subparagraph, a corporation controlled by the corporation referred to in that subparagraph or any combination of those corporations; and

(g)  a winding-up of a subsidiary wholly-owned corporation, in respect of which sections 556 to 564.1 and 565 apply, or an amalgamation, in respect of which section 550.9 applies, of a corporation with one or more subsidiary wholly-owned corporations, is deemed not to result in a significant increase in the total direct interest, or in the total of all direct interests, in one or more subsidiaries, as the case may be.

2000, c. 5, s. 76; 2009, c. 15, s. 73; 2015, c. 24, s. 56; 2019, c. 14, s. 111.

2015-10-26

308.2.2. For the purposes of section 308.2.1, the following rules apply:

(a)  “unrelated person” means a person, other than the particular dividend-recipient corporation, to whom that corporation is not related or a partnership any member of which, other than the particular dividend-recipient corporation, is not related to that corporation;

(b)  a corporation that is formed by an amalgamation of two or more other corporations is deemed to be a continuation of each of the other corporations;

(c)  proceeds of disposition of a property are to be determined without reference to paragraph a of section 308.1 in section 251 and without reference to Chapter V of Title X;

(d)  notwithstanding any other provision of this Act, where a person not resident in Canada disposes of a property in a taxation year and the gain or loss from the disposition is not included in computing the person’s taxable income earned in Canada for the year, the person is deemed to have disposed of the property for proceeds of disposition that are less than its fair market value unless, under the income tax laws of the country in which the person is resident, the gain or loss is computed as if the property were disposed of for proceeds of disposition that are not less than its fair market value and the gain or loss so computed is recognized for the purposes of those laws;

(e)  a significant increase in the total direct interest in a corporation that would, but for this paragraph, be described in paragraph b of section 308.2.1 is deemed not to be described in that paragraph if the increase is the result of the issuance of shares of the capital stock of the corporation for consideration that consists solely of money and the shares are redeemed, acquired or cancelled by the corporation before the dividend is received;

(f)  a disposition of property that would, but for this paragraph, be described in paragraph a of section 308.2.1, or a significant increase in the total direct interest in a corporation that would, but for this paragraph, be described in paragraph b of section 308.2.1, is deemed not to be described in either of those paragraphs if

i.  the dividend-payer corporation was related to the particular dividend-recipient corporation immediately before the dividend was received,

ii.  the dividend-payer corporation did not, as part of the series of transactions or events that includes the receipt of the dividend, cease to be related to the particular dividend-recipient corporation,

iii.  the disposition or increase occurred before the dividend was received,

iv.  the disposition or increase is the result of the disposition of shares to, or the acquisition of shares of, any corporation, and

v.  at the time the dividend was received, all the shares of the capital stock of the dividend-payer corporation and of the particular dividend-recipient corporation were owned by the corporation referred to in subparagraph iv, a corporation that controls the corporation referred to in that subparagraph, a corporation controlled by the corporation referred to in that subparagraph or any combination of those corporations; and

(g)  a winding-up of a subsidiary wholly-owned corporation, in respect of which sections 556 to 564.1 and 565 apply, or an amalgamation, in respect of which section 550.9 applies, of a corporation with one or more subsidiary wholly-owned corporations, is deemed not to result in a significant increase in the total direct interest, or in the total of all direct interests, in one or more subsidiaries, as the case may be.

2000, c. 5, s. 76; 2009, c. 15, s. 73; 2015, c. 24, s. 56.

2009-06-04

308.2.2. For the purposes of section 308.2.1, the following rules apply:

(a)  “unrelated person” means a person, other than the particular corporation that received the dividend, to whom the particular corporation is not related or a partnership any member of which, other than the particular corporation, is not related to the particular corporation;

(b)  a corporation that is formed by an amalgamation of two or more other corporations is deemed to be a continuation of each of the other corporations;

(c)  proceeds of disposition of a property are to be determined without reference to paragraph a of section 308.1 in section 251 and without reference to Chapter V of Title X; and

(d)  notwithstanding any other provision of this Act, where a person not resident in Canada disposes of a property in a taxation year and the gain or loss from the disposition is not included in computing the person’s taxable income earned in Canada for the year, the person is deemed to have disposed of the property for proceeds of disposition that are less than its fair market value unless, under the income tax laws of the country in which the person is resident, the gain or loss is computed as if the property were disposed of for proceeds of disposition that are not less than its fair market value and the gain or loss so computed is recognized for the purposes of those laws.

2000, c. 5, s. 76; 2009, c. 15, s. 73.

2006-03-01

308.2.2. For the purposes of section 308.2.1, the following rules apply:

(a)  “unrelated person” means a person, other than the particular corporation that received the dividend, to whom the particular corporation is not related or a partnership any member of which, other than the particular corporation, is not related to the particular corporation;

(b)  a corporation that is formed by an amalgamation of two or more other corporations is deemed to be a continuation of each of the other corporations;

(c)  proceeds of disposition of a property shall be determined without reference to paragraph a of section 308.1 in section 251; and

(d)  notwithstanding any other provision of this Act, where a person not resident in Canada disposes of a property in a taxation year and the gain or loss from the disposition is not included in computing the person’s taxable income earned in Canada for the year, the person is deemed to have disposed of the property for proceeds of disposition that are less than its fair market value unless, under the income tax laws of the country in which the person is resident, the gain or loss is computed as if the property were disposed of for proceeds of disposition that are not less than its fair market value and the gain or loss so computed is recognized for the purposes of those laws.

2000, c. 5, s. 76.