I-3 - Taxation Act

Section 726.15 Disposition versions

2006-03-01

726.15. For the purposes of section 726.14, the average annual rate of return on a share other than a prescribed share of a corporation for a taxation year is the annual rate of return by way of dividends that a knowledgeable and prudent investor who purchased the share on the day it was issued would expect to receive in that year, other than the first year after the issue, in respect of the share if

(a)  there was no delay or postponement of the payment of dividends and no failure to pay dividends in respect of the share;

(b)  there was no variation from year to year in the amount of dividends payable in respect of the share other than where the amount of dividends payable is expressed as an invariant percentage of or by reference to an invariant difference between the dividend expressed as a rate of interest and a generally quoted market interest rate; and

(c)  the proceeds to be received by the investor on the disposition of the share is the same amount the corporation received as consideration on the issue of the share.

1987, c. 67, s. 142; 1997, c. 3, s. 71.