I-3 - Taxation Act

Section 555.0.3 Disposition versions

2017-02-08

555.0.3. Section 555 does not apply in respect of a taxpayer’s share of the capital stock of a predecessor foreign corporation that is exchanged for or becomes, on a foreign merger, a share of the capital stock of the new foreign corporation or the foreign parent corporation, where

(a)  the new foreign corporation is, at the time that is immediately after the foreign merger, a foreign affiliate of the taxpayer;

(b)  shares of the capital stock of the new foreign corporation are, at the time that is immediately after the foreign merger, excluded property, within the meaning of section 576.1, of another foreign affiliate of the taxpayer; and

(c)  the foreign merger is part of a transaction or event or a series of transactions or events that includes a disposition of shares of the capital stock of the new foreign corporation, or property substituted for the shares, to

i.  a person (other than a foreign affiliate of the taxpayer in respect of which the taxpayer has a qualifying interest, within the meaning of paragraph m of subsection 2 of section 95 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), at the time of the transaction or event or throughout the series, as the case may be) with whom the taxpayer was dealing at arm’s length immediately after the transaction, event or series, or

ii.  a partnership a member of which is, immediately after the transaction, event or series, a person described in subparagraph i.

2017, c. 1, s. 138.