Income Tax Act — I-3.3 89
ubsection) that is a Canadian-controlled private corporation or a deposit insurance corporation, there shall be included in computing the parent’s general rate income pool at the end of its taxation year that immediately follows the taxation year during which it receives the assets of the subsidiary on the winding-up (a) if the subsidiary was, in its taxation year during which its assets were distributed to the parent on the winding-up (in this paragraph referred to as its “last taxation year”), a Canadian-controlled private corporation or a deposit insurance corporation, the positive or negative amount determined by the formula A - B where A is the subsidiary’s general rate income pool at the end of its last taxation year, and B is the amount, if any, by which (i) the total of all amounts each of which is an eligible dividend paid by the subsidiary in its last taxation year exceeds (ii) the total of all amounts each of which is an excessive eligible dividend designation made by the subsidiary in its last taxation year; and (b) in any other case, the amount determined by the formula A + B + C - D - E - F - G - H where A is the total of all amounts each of which is the cost amount to the subsidiary of a property immediately before the end of its taxation year during which its assets were distributed to the parent on the winding-up (in this paragraph referred to as its “last taxation year”), B is the amount of any money of the subsidiary on hand immediately before the end of its last taxation year, C is the amount, if any, by which (i) the total of all amounts that, if the subsidiary had had unlimited income for its last taxation year from each business carried on, and from each property held, by it in that last taxation year and had realized an unlimited amount of capital gains for that last taxation year, would have been deductible under subsection 111(1) in computing its taxable income for that last taxation year exceeds (ii) the total of all amounts deducted under subsection 111(1) in computing the subsidiary’s taxable income for its last taxation year, D is the total of all amounts each of which is the amount of any debt owing by the subsidiary, or of any other obligation of the subsidiary to pay any amount, that was outstanding immediately before the end of its last taxation year, E is the paid up capital, immediately before the end of its last taxation year, of all of the issued and outstanding shares of the capital stock of the subsidiary, F is the total of all amounts each of which is a reserve deducted in computing the subsidiary’s income for its last taxation year, G is the subsidiary’s capital dividend account, if any, immediately before the end of its last taxation year, and H is the subsidiary’s low rate income pool immediately before the end of its last taxation year. GRIP addition for 2006 (7) If a corporation was (or, but for an election under subsection (11), would have been), throughout its first taxation year that includes any part of January 1, 2006, a Canadian-controlled private corporation, its general rate income pool at the end of its immediately preceding taxation year is deemed to be the greater of nil and the amount determined by the formula A - B where A is the total of (a) 63% of the total of all amounts each of which is the corporation’s full rate taxable income (as defined in subsection 123.4(1)), for a taxation year of the corporation that ended after 2000 and before 2004, determined before taking into consideration the specified future tax consequences for that taxation year, (b) 63% of the total of all amounts each of which is the corporation’s full rate taxable income (as would be defined in subsection 123.4(1), if that definition were read without reference to its subparagraphs (a)(i) and (ii)), for a taxation year of the corporation that ended after 2003 and before 2006, determined before taking into consideration the specified future tax consequences for that taxation year, and (c) all amou