Income Tax Act — I-3.3 94
icular property that is, or will be, at any time held, loaned or transferred, as the case may be, by a particular person or partnership is not restricted property held, loaned or transferred, as the case may be, at that time by the particular person or partnership if (a) the following conditions are met: (i) the particular property (and property, if any, for which it is, or is to be, substituted) was not, and will not be, at any time acquired, held, loaned or transferred by the particular person or partnership (or any person or partnership with whom the particular person or partnership does not at any time deal at arm’s length) in whole or in part for the purpose of permitting any change in the value of the property of a corporation (that is, at any time, a closely held corporation) to accrue directly or indirectly in any manner whatever to the value of property held by a non-resident trust, (ii) the Minister is satisfied that the particular property (and property, if any, for which it is, or is to be, substituted) is described by subparagraph (i), and (iii) the particular property is identified in prescribed form, containing prescribed information, filed, by or on behalf of the particular person or partnership, with the Minister on or before (A) in the case of a person, the particular person’s filing-due date for the particular person’s taxation year that includes that time, (B) in the case of a partnership, the day on or before which a return is required by section 229 of the Income Tax Regulations to be filed in respect of the fiscal period of the particular partnership or would be required to be so filed if that section applied to the partnership, or (C) another date that is acceptable to the Minister; or (b) at that time (i) the particular property is (A) a share of the capital stock of a corporation, (B) a fixed interest in a trust, or (C) an interest, as a member of a partnership, under which, by operation of any law governing the arrangement in respect of the partnership, the liability of the member as a member of the partnership is limited, (ii) there are at least 150 persons each of whom holds at that time property that at that time (A) is identical to the particular property, and (B) has a total fair market value of at least $500, (iii) the total of all amounts each of which is the fair market value, at that time, of the particular property (or of identical property that is held, at that time, by the particular person or partnership or a person or partnership with whom the particular person or partnership does not deal at arm’s length) does not exceed 10% of the total of all amounts each of which is the fair market value, at that time, of the particular property or of identical property held by any person or partnership, (iv) property that is identical to the particular property can normally be acquired by and sold by members of the public in the open market, and (v) the particular property, or identical property, is listed on a designated stock exchange. Anti-avoidance (15) In applying this section, (a) if it can reasonably be considered that one of the main reasons that a person or partnership (i) is at any time a shareholder of a corporation is to cause the condition in paragraph (b) of the definition closely held corporation in subsection (1) to be satisfied in respect of the corporation, the condition is deemed not to have been satisfied at that time in respect of the corporation, (ii) holds at any time an interest in a trust is to cause the condition in clause (h)(ii)(A) of the definition exempt foreign trust in subsection (1) to be satisfied in respect of the trust, the condition is deemed not to have been satisfied at that time in respect of the trust, and (iii) holds at any time a property is to cause the condition described in subparagraph (14)(b)(ii) to be satisfied in respect of the property or an identical property held by any person, the condition is deemed not to have been satisfied at that time in re