I-3 - Taxation Act

Section 851.22.2 Disposition versions

2015-10-26

851.22.2. For the purposes of the definitions of “excluded property” and “specified debt obligation” in section 851.22.1 and of section 851.22.23.6, a taxpayer has a significant interest in a corporation at any time if the taxpayer is related otherwise than because of a right referred to in paragraph b of section 20 to the corporation at that time or the taxpayer holds, at that time, shares of the corporation that give the taxpayer 10% or more of the votes that could be cast under all circumstances at an annual meeting of shareholders of the corporation, and shares of the corporation having a fair market value of 10% or more of the fair market value of all the issued shares of the corporation.

For the purpose of determining under the first paragraph whether a taxpayer has a significant interest in a corporation at any time,

(a)  the taxpayer is deemed to hold each share that is held at that time by a person or partnership to whom the taxpayer is related otherwise than because of a right referred to in paragraph b of section 20; and

(b)  a share of the corporation acquired by the taxpayer by reason of the default of a debtor shall be disregarded where it is reasonable to consider that the share is being retained by the taxpayer for the purpose of minimizing any losses in respect of the debtor’s default, and a share of the corporation that is prescribed in respect of the taxpayer shall be disregarded.

For the purposes of this section, in determining if, at a particular time, a person or partnership is related to another person or partnership, the rules in sections 17 to 21 are to be applied as if,

(a)  a partnership (other than a partnership in respect of which an amount of the income or capital of the partnership that any particular person or particular partnership, in this paragraph referred to as the “entity”, may receive directly from the partnership at any time as a member of the partnership depends on the exercise by any entity of, or the failure by any entity to exercise, a discretionary power) were a corporation having capital stock of a single class divided into 100 issued shares and each member of the partnership owned, at the particular time, that proportion of the issued shares of that class that the fair market value of the member’s interest in the partnership at that time is of the fair market value of all interests in the partnership at the same time; and

(b)  a trust (other than a trust in respect of which an amount of the income or capital of the trust that any entity may receive directly from the trust as a beneficiary under the trust depends on the exercise by any entity of, or the failure by any entity to exercise, a discretionary power) were a corporation having capital stock of a single class divided into 100 issued shares and each beneficiary under the trust owned, at the particular time, that proportion of the issued shares of that class that the fair market value of the beneficiary’s beneficial interest in the trust at that time is of the fair market value of all beneficial interests in the trust at the same time.

1996, c. 39, s. 235; 1997, c. 3, s. 71; 2010, c. 25, s. 96; 2015, c. 24, s. 126.

2010-10-27

851.22.2. For the purposes of the definitions of “excluded property”, “mark-to-market property” and “specified debt obligation” in section 851.22.1 and of section 851.22.23.6, a taxpayer has a significant interest in a corporation at any time if the taxpayer is related otherwise than because of a right referred to in paragraph b of section 20 to the corporation at that time or the taxpayer holds, at that time, shares of the corporation that give the taxpayer 10% or more of the votes that could be cast under all circumstances at an annual meeting of shareholders of the corporation, and shares of the corporation having a fair market value of 10% or more of the fair market value of all the issued shares of the corporation.

For the purpose of determining under the first paragraph whether a taxpayer has a significant interest in a corporation at any time,

(a)  the taxpayer is deemed to hold each share that is held at that time by a person or partnership to whom the taxpayer is related otherwise than because of a right referred to in paragraph b of section 20; and

(b)  a share of the corporation acquired by the taxpayer by reason of the default of a debtor shall be disregarded where it is reasonable to consider that the share is being retained by the taxpayer for the purpose of minimizing any losses in respect of the debtor’s default, and a share of the corporation that is prescribed in respect of the taxpayer shall be disregarded.

For the purposes of this section, in determining if, at a particular time, a person or partnership is related to another person or partnership, the rules in sections 17 to 21 are to be applied as if,

(a)  a partnership (other than a partnership in respect of which an amount of the income or capital of the partnership that any particular person or particular partnership, in this paragraph referred to as the “entity”, may receive directly from the partnership at any time as a member of the partnership depends on the exercise by any entity of, or the failure by any entity to exercise, a discretionary power) were a corporation having capital stock of a single class divided into 100 issued shares and each member of the partnership owned, at the particular time, that proportion of the issued shares of that class that the fair market value of the member’s interest in the partnership at that time is of the fair market value of all interests in the partnership at the same time; and

(b)  a trust (other than a trust in respect of which an amount of the income or capital of the trust that any entity may receive directly from the trust as a beneficiary under the trust depends on the exercise by any entity of, or the failure by any entity to exercise, a discretionary power) were a corporation having capital stock of a single class divided into 100 issued shares and each beneficiary under the trust owned, at the particular time, that proportion of the issued shares of that class that the fair market value of the beneficiary’s beneficial interest in the trust at that time is of the fair market value of all beneficial interests in the trust at the same time.

1996, c. 39, s. 235; 1997, c. 3, s. 71; 2010, c. 25, s. 96.

2006-03-01

851.22.2. For the purposes of section 851.22.3 and the definition of “mark-to-market property” in section 851.22.1, a taxpayer has a significant interest in a corporation at any time if the taxpayer is related otherwise than because of a right referred to in paragraph b of section 20 to the corporation at that time or the taxpayer holds, at that time, shares of the corporation that give the taxpayer 10% or more of the votes that could be cast under all circumstances at an annual meeting of shareholders of the corporation, and shares of the corporation having a fair market value of 10% or more of the fair market value of all the issued shares of the corporation.

For the purpose of determining under the first paragraph whether a taxpayer has a significant interest in a corporation at any time,

(a)  the taxpayer is deemed to hold each share that is held at that time by a person or partnership to whom the taxpayer is related otherwise than because of a right referred to in paragraph b of section 20; and

(b)  a share of the corporation acquired by the taxpayer by reason of the default of a debtor shall be disregarded where it is reasonable to consider that the share is being retained by the taxpayer for the purpose of minimizing any losses in respect of the debtor’s default, and a share of the corporation that is prescribed in respect of the taxpayer shall be disregarded.

For the purposes of this section, a person or partnership is deemed to be related to a person or partnership where they would be related if, for the purposes of sections 17 to 21,

(a)  every partnership and trust were a corporation;

(b)  subject to subparagraph c, all decisions relating to the conduct of a trust were made by majority vote of the beneficiaries of the trust, with each beneficiary having, at a particular time, a number of votes equal to the number determined by the proportion of 100 that the fair market value of the beneficiary’s beneficial interest in the trust at that time is of the aggregate of all amounts each of which is the fair market value at that time of a beneficial interest in the trust; and

(c)  where the aggregate that is referred to in subparagraph b in respect of a trust is equal to zero, the trust were not controlled by any person, partnership or group each member of which is a person or partnership.

1996, c. 39, s. 235; 1997, c. 3, s. 71.