Income Tax Act — I-3.3 55
mediately before the particular time, (iii) a disposition, to a person or partnership who was an unrelated person immediately before the particular time, of (A) shares of the capital stock of the corporation that paid the dividend (referred to in this paragraph and subsection 55(3.01) as the “dividend payer”), or (B) property (other than shares of the capital stock of the dividend recipient) more than 10% of the fair market value of which was, at any time during the series, derived from any combination of shares of the capital stock and debt of the dividend payer, (iv) after the time the dividend was received, a disposition, to a person or partnership that was an unrelated person immediately before the particular time, of (A) shares of the capital stock of the dividend recipient, or (B) property more than 10% of the fair market value of which was, at any time during the series, derived from any combination of shares of the capital stock and debt of the dividend recipient, and (v) a significant increase in the total of all direct interests in the dividend payer of one or more persons or partnerships who were unrelated persons immediately before the particular time; or (b) if the dividend was received (i) in the course of a reorganization in which (A) a distributing corporation made a distribution to one or more transferee corporations, and (B) the distributing corporation was wound up or all of the shares of its capital stock owned by each transferee corporation immediately before the distribution were redeemed or cancelled otherwise than on an exchange to which subsection 51(1), 85(1) or 86(1) applies, and (ii) on a permitted redemption in relation to the distribution or on the winding-up of the distributing corporation. Interpretation for par. (3)(a) (3.01) For the purposes of paragraph 55(3)(a), (a) an unrelated person means a person (other than the dividend recipient) to whom the dividend recipient is not related or a partnership any member of which (other than the dividend recipient) is not related to the dividend recipient; (b) a corporation that is formed by an amalgamation of 2 or more other corporations is deemed to be the same corporation as, and a continuation of, each of the other corporations; (c) where there has been a winding-up of a corporation to which subsection 88(1) applies, the parent is deemed to be the same corporation as, and a continuation of, the subsidiary; (d) proceeds of disposition are to be determined without reference to (i) subparagraph (j)(i) of the definition proceeds of disposition in section 54, and (ii) section 93; (e) notwithstanding any other provision of this Act, where a non-resident person disposes of a property in a taxation year and the gain or loss from the disposition is not included in computing the person’s taxable income earned in Canada for the year, the person is deemed to have disposed of the property for proceeds of disposition that are less than its fair market value unless, under the income tax laws of the country in which the person is resident, the gain or loss is computed as if the property were disposed of for proceeds of disposition that are not less than its fair market value and the gain or loss so computed is recognized for the purposes of those laws; (f) a significant increase in the total direct interest in a corporation that would, but for this paragraph, be described in subparagraph (3)(a)(ii) is deemed not to be described in that subparagraph if the increase was the result of the issuance of shares of the capital stock of the corporation solely for money and the shares were redeemed, acquired or cancelled by the corporation before the dividend was received; (g) a disposition of property that would, but for this paragraph, be described in subparagraph (3)(a)(i), or a significant increase in the total direct interest in a corporation that would, but for this paragraph, be described in subparagraph (3)(a)(ii), is deemed not to be described in those subparagraphs