I-3 - Taxation Act

Section 558 Disposition versions

2023-09-26

558. The parent is deemed to dispose, on the winding-up, of the shares of the capital stock of the subsidiary owned by it immediately before that time for proceeds equal to the greater of

(a)  the lesser of

i.  the paid-up capital in respect of the shares immediately before the winding-up; and

ii.  the amount by which the aggregate of the amounts each of which is in respect of any property owned by the subsidiary immediately before the winding-up and equal to the cost amount to it of the property at that time, plus its cash then on hand, exceeds the aggregate of all the debts of the subsidiary immediately before the winding-up and of the amount of each reserve deducted by the subsidiary in computing its income for the taxation year during which its property was distributed to the parent on the winding-up, other than a reserve contemplated in sections 153, 234 and 279 and sections 357 and 358, as they apply in respect of a disposition made before 13 November 1981; or

(b)  the aggregate of amounts each of which is in respect of any share of the capital stock of the subsidiary and equal to the adjusted cost base of the share to the parent, immediately before the winding-up.

1972, c. 23, s. 436; 1973, c. 17, s. 63; 1973, c. 18, s. 22; 1975, c. 22, s. 139; 1978, c. 26, s. 100; 1982, c. 5, s. 127; 1993, c. 16, s. 220; 1997, c. 3, s. 71; 1997, c. 14, s. 86; 2023, c. 19, s. 36.

2006-03-01

558. The parent is deemed to dispose, on the winding-up, of the shares of the capital stock of the subsidiary owned by it immediately before that time for proceeds equal to the greater of

(a)  the lesser of

i.  the paid-up capital in respect of the shares immediately before the winding-up; and

ii.  the amount by which the aggregate of the amounts each of which is in respect of any property owned by the subsidiary immediately before the winding-up and equal to the cost amount to it of the property at that time, plus its cash then on hand, exceeds the aggregate of all the debts of the subsidiary immediately before the winding-up and of the amount of each reserve deducted by the subsidiary in computing its income for the taxation year during which its property was distributed to the parent on the winding-up, other than a reserve contemplated in sections 153, 234, 279, 357 and 358; or

(b)  the aggregate of amounts each of which is in respect of any share of the capital stock of the subsidiary and equal to the adjusted cost base of the share to the parent, immediately before the winding-up.

1972, c. 23, s. 436; 1973, c. 17, s. 63; 1973, c. 18, s. 22; 1975, c. 22, s. 139; 1978, c. 26, s. 100; 1982, c. 5, s. 127; 1993, c. 16, s. 220; 1997, c. 3, s. 71; 1997, c. 14, s. 86.