I-3 - Taxation Act

Section 550.7 Disposition versions

2015-10-26

550.7. Where there has been an amalgamation of two or more corporations each of which is a development corporation, within the meaning of section 363, or a corporation that at no time carried on business, and a predecessor corporation entered into an agreement with a person at a particular time under which the predecessor corporation issued to the person before the amalgamation, for consideration given by the person, a share (in this section referred to as the “old share”) that was a flow-through share other than a right to acquire a share, or a right to acquire a share that would be a flow-through share if it were issued, the following rules apply for the purposes of section 359.8 and Part III.14 and for the purpose of renouncing an amount under any of sections 359.2, 359.2.1 and 359.4 in respect of Canadian exploration expenses or Canadian development expenses that would, but for the renunciation, be incurred by the new corporation after the amalgamation:

(a)  the person is deemed to have given the consideration under the agreement to the new corporation for the issue of the particular share described in the second paragraph,

(b)  the agreement is deemed to have been entered into between the person and the new corporation at the particular time,

(c)  the particular share described in the second paragraph is deemed to be a flow-through share of the new corporation, and

(d)  the new corporation is deemed to be the same corporation as the predecessor corporation.

The particular share referred to in the first paragraph is a share of any class of the capital stock of the new corporation

(a)  that the new corporation issues on the amalgamation to the person referred to in the first paragraph or to a person or partnership that subsequently acquired the old share in consideration for the disposition of the old share of the predecessor corporation and the attributes of which are similar to the attributes of the old share; or

(b)  that the new corporation is obliged after the amalgamation to issue to the person referred to in the first paragraph pursuant to the right of that person to acquire a share of the capital stock of the predecessor corporation that would have been a flow-through share if it had been issued, and that would, if it were issued, be a flow-through share.

For the purposes of this section, “flow-through share” has the meaning assigned by the first paragraph of section 359.1.

1993, c. 16, s. 217; 1995, c. 49, s. 144; 1997, c. 3, s. 71; 1998, c. 16, s. 171; 2015, c. 24, s. 83.

2006-03-01

550.7. Where there has been an amalgamation of two or more corporations each of which is a development corporation, within the meaning of section 363, or a corporation that at no time carried on business, and a predecessor corporation entered into an agreement with a person at a particular time under which the predecessor corporation issued or agreed to issue, for consideration given by the person, a share that was a flow-through share or that would have been a flow-through share if it had been issued, the following rules apply for the purposes of section 359.8 and Part III.14 and for the purpose of renouncing an amount under section 359.2, 359.2.1 or 359.4 in respect of Canadian exploration expenses or Canadian development expenses that would, but for the renunciation, be incurred by the new corporation after the amalgamation:

(a)  the person is deemed to have given the consideration under the agreement to the new corporation for the issue of the particular share described in the second paragraph,

(b)  the agreement is deemed to have been entered into between the person and the new corporation at the particular time,

(c)  the particular share described in the second paragraph is deemed to be a flow-through share of the new corporation, and

(d)  the new corporation is deemed to be the same corporation as the predecessor corporation.

The particular share referred to in the first paragraph is a share of any class of the capital stock of the new corporation

(a)  that the new corporation issued on the amalgamation to the person referred to in the first paragraph in consideration for the disposition of the flow-through share of the predecessor corporation and the attributes of which are similar to the attributes of the flow-through share, or

(b)  that the new corporation was obliged after the amalgamation to issue to the person referred to in the first paragraph pursuant to the obligation of the predecessor corporation to issue a flow-through share to that person and that would not, if issued, be a prescribed share for the purposes of section 359.1.

For the purposes of this section, “flow-through share” has the meaning assigned by the first paragraph of section 359.1.

1993, c. 16, s. 217; 1995, c. 49, s. 144; 1997, c. 3, s. 71; 1998, c. 16, s. 171.