I-3 - Taxation Act

Section 740.3 Disposition versions

2010-04-20

740.3. Section 740.2 does not apply in respect of a dividend received by a particular corporation

(a)  on a share that is at the time the dividend is received a share described in section 21.6.1;

(b)  a taxable preferred share of a class of the capital stock of a corporation that is listed on a designated stock exchange, issued after 15 December 1987, where all the guarantee agreements described in section 740.2 are given by the corporation that issued the share, by one or more persons that are related to it, otherwise than because of a right referred to in paragraph b of section 20, or by that corporation and such persons, unless at the time the dividend is paid to the particular corporation, dividends in respect of more than 10% of the issued and outstanding shares to which the guarantee agreements described in section 740.2 apply are paid to the particular corporation or the particular corporation and specified persons in relation to it;

(c)  on a grandfathered share or a taxable preferred share issued before 16 December 1987;

(d)  on a prescribed share; or

(e)  on a share

i.  that was not acquired by the particular corporation in the ordinary course of its business,

ii.  in respect of which the guarantee agreement, referred to in section 740.2, was not given in the ordinary course of the guarantor’s business, and

iii.  the corporation issuer of which is, at the time the dividend is paid, related, otherwise than because of a right referred to in paragraph  b of section 20, to both the particular corporation and the guarantor.

1980, c. 13, s. 66; 1982, c. 5, s. 144; 1984, c. 15, s. 170; 1987, c. 67, s. 151; 1989, c. 5, s. 100; 1990, c. 59, s. 284; 1997, c. 3, s. 71; 2001, c. 7, s. 88; 2004, c. 8, s. 144; 2010, c. 5, s. 58.

2006-03-01

740.3. Section 740.2 does not apply in respect of a dividend received by a particular corporation

(a)  on a share that is at the time the dividend is received a share described in section 21.6.1;

(b)  a taxable preferred share of a class of the capital stock of a corporation that is listed on a Canadian stock exchange, issued after 15 December 1987, where all the guarantee agreements described in section 740.2 are given by the corporation that issued the share, by one or more persons that are related to it, otherwise than because of a right referred to in paragraph b of section 20, or by that corporation and such persons, unless at the time the dividend is paid to the particular corporation, dividends in respect of more than 10% of the issued and outstanding shares to which the guarantee agreements described in section 740.2 apply are paid to the particular corporation or the particular corporation and specified persons in relation to it;

(c)  on a grandfathered share or a taxable preferred share issued before 16 December 1987;

(d)  on a prescribed share; or

(e)  on a share

i.  that was not acquired by the particular corporation in the ordinary course of its business,

ii.  in respect of which the guarantee agreement, referred to in section 740.2, was not given in the ordinary course of the guarantor’s business, and

iii.  the corporation issuer of which is, at the time the dividend is paid, related, otherwise than because of a right referred to in paragraph  b of section 20, to both the particular corporation and the guarantor.

1980, c. 13, s. 66; 1982, c. 5, s. 144; 1984, c. 15, s. 170; 1987, c. 67, s. 151; 1989, c. 5, s. 100; 1990, c. 59, s. 284; 1997, c. 3, s. 71; 2001, c. 7, s. 88; 2004, c. 8, s. 144.