I-3 - Taxation Act

Section 796.3 Disposition versions

2021-06-02

796.3. Where, at a particular time, an eligible trust disposes of eligible debt in exchange for consideration that includes the issuance of eligible shares, the following rules apply:

(a)  for the purpose of computing the income of the eligible trust for its taxation year that includes that time

i.  an amount, in respect of the disposition of the eligible debt, equal to the fair market value of all property (other than eligible shares) received on the exchange is included,

ii.  no amount in respect of the disposition of the eligible debt is included (other than an amount described in subparagraph i), and

iii.  no amount in respect of the receipt of the eligible shares is included;

(b)  the cost to the eligible trust of each eligible share is deemed to be nil;

(c)  in computing the paid-up capital in respect of the class of the capital stock of the Canadian Wheat Board that includes the eligible shares, at a particular time after the shares are issued, an amount equal to the amount of the paid-up capital in respect of that class at the time the shares are issued must be deducted;

(d)  section 467 does not apply in respect of property

i.  that is held by the trust in a taxation year that ends at or after the particular time, and

ii.  that is received by the trust on the exchange or is a substitute for property described in subparagraph i; and

(e)  sections 505, 506 and 508 and Divisions I to IV.2 of Chapter IV of Title IX do not apply at the particular time in respect of eligible shares.

2021, c. 14, s. 101.