Income Tax Act — I-3.3 84.1
 disposition of subject shares (in this subsection referred to as the “disposition time”) by a taxpayer to a purchaser corporation if the following conditions are met: (a) the taxpayer has not previously, at any time after 2023, sought an exception to the application of subsection (1) under paragraph (2)(e) in respect of a disposition of shares that, at that time, derived their value from an active business that is relevant to the determination of whether the subject shares satisfy the condition set out in subparagraph (b)(iii); (b) at the disposition time, (i) the taxpayer is an individual (other than a trust), (ii) the purchaser corporation is controlled by one or more children (within the meaning of paragraph (2.3)(a), in this subsection referred to as the “child” or “children”) of the taxpayer, each of whom is 18 years of age or older, and (iii) the subject shares are qualified small business corporation shares or shares of the capital stock of a family farm or fishing corporation (as those terms are defined in subsection 110.6(1)); (c) at all times after the disposition time, the taxpayer does not — either alone or together with a spouse or common-law partner of the taxpayer — control, directly or indirectly in any manner whatever, (i) the subject corporation, (ii) the purchaser corporation, or (iii) any other person or partnership (in this subsection referred to as a “relevant group entity”) that carries on, at the disposition time, an active business (referred to in this subsection as a “relevant business”) that is relevant to the determination of whether the subject shares satisfy the condition set out in subparagraph (b)(iii); (d) at all times after the disposition time, the taxpayer does not – either alone or together with a spouse or common law partner of the taxpayer – own, directly or indirectly, (i) 50% or more of any class of shares, other than shares of a specified class as defined in subsection 256(1.1) (in this subsection referred to as “non-voting preferred shares”), of the capital stock of the subject corporation or of the purchaser corporation, or (ii) 50% or more of any class of equity interest (other than non-voting preferred shares) in any relevant group entity; (e) within 36 months after the disposition time and at all times thereafter, the taxpayer and a spouse or common-law partner of the taxpayer do not own, directly or indirectly, (i) any shares, other than non-voting preferred shares of the capital stock of the subject corporation or of the purchaser corporation, or (ii) any equity interest (other than non-voting preferred shares) in any relevant group entity; (f) subject to subsection (2.3), from the disposition time until 36 months after that time, (i) the child or group of children, as the case may be, controls the purchaser corporation, (ii) the child, or at least one member of the group of children, as the case may be, is actively engaged on a regular, continuous and substantial basis (including within the meaning of paragraph 120.4(1.1)(a)) in the activities of a relevant business of the subject corporation or a relevant group entity, and (iii) each relevant business of the subject corporation and any relevant group entity is carried on as an active business; (g) subject to subsection (2.3), no later than 36 months after the disposition time or such greater period as is reasonable in the circumstances, the taxpayer and a spouse or common-law partner of the taxpayer have taken reasonable steps to (i) transfer management of each relevant business of the subject corporation and any relevant group entity to the child or at least one member of the group of children referred to in subparagraph (f)(ii), and (ii) permanently cease to manage each relevant business of the subject corporation and any relevant group entity; and (h) the taxpayer and the child, or the taxpayer and each member of the group of children, as the case may be, (i) jointly elect, in prescribed form, for paragraph (2)(e) to apply