I-3 - Taxation Act

Section 1118.2 Disposition versions

2019-06-19

1118.2. Division XIII of Chapter IV of Title IV of Book III of Part I and Chapters IV to VI of Title IX of that Book III do not apply to a taxpayer who holds a share (in this section referred to as the “old share”) of a class of shares of the capital stock, that is recognized under securities legislation as or as part of an investment fund, of a mutual fund corporation if the taxpayer exchanges or otherwise disposes of the old share for another share (in this section referred to as the “new share”) of a mutual fund corporation, unless

(a)  if the exchange or disposition occurs in the course of a transaction, event or series of transactions or events described in section 541 or in subsections 1 and 2 of section 544,

i.  all shares of the class (determined without reference to section 1.3) that includes the old share at the time of the exchange or disposition are exchanged for shares of the class that includes the new share,

ii.  the old share and the new share derive their value in the same proportion from the same property or group of properties, and

iii.  the transaction, event or series of transactions or events was undertaken solely for bona fide purposes and not to cause this section to apply;

(b)  if the old share and the new share are shares of the same class (determined without reference to section 1.3) of shares of the same mutual fund corporation,

i.  the old share and the new share derive their value in the same proportion from the same property or group of properties held by the corporation that is allocated to that class, and

ii.  that class is recognized under securities legislation as or as part of a single investment fund; or

(c)  the exchange is made as a consequence of the application of section 11.1 of the Act constituting Capital régional et coopératif Desjardins (chapter C-6.1) in respect of the taxpayer.

2019, c. 14, s. 441.