Income Tax Act — I-3.3 84.1
tly, by the taxpayer and a spouse or common-law partner of the taxpayer immediately before the disposition time, or (ii) in the case of a disposition of subject shares that are, at the disposition time, qualified small business corporation shares as those terms are defined in subsection 110.6(1) (other than subject shares described in subparagraph (i)), interests (including any debt or equity interest) in any of the subject corporation, the purchaser corporation and any relevant group entity with a fair market value that exceeds 30% of the fair market value of all the interests that were owned, directly or indirectly, by the taxpayer and a spouse or common-law partner of the taxpayer immediately before the disposition time; (g) subject to subsection (2.3), from the disposition time until the later of 60 months after the disposition time and the final sale 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) any relevant business of the subject corporation and any relevant group entity is carried on as an active business; (h) subject to subsection (2.3), no later than 60 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 (g)(ii), and (ii) permanently cease to manage each relevant business of the subject corporation and any relevant group entity; and (i) 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 in respect of the disposition of the subject shares, and (ii) file the election with the Minister on or before the taxpayer’s filing-due date for the taxation year that includes the disposition time. Addition to paid-up capital (3) In computing the paid-up capital at any time after May 22, 1985 in respect of any class of shares of the capital stock of a corporation, there shall be added an amount equal to the lesser of (a) the amount, if any, by which (i) the total of all amounts each of which is an amount deemed by subsection 84(3), 84(4) or 84(4.1) to be a dividend on shares of the class paid after May 22, 1985 and before that time by the corporation exceeds (ii) the total of such dividends that would be determined under subparagraph 84.1(3)(a)(i) if this Act were read without reference to paragraph 84.1(1)(a), and (b) the total of all amounts required by paragraph 84.1(1)(a) to be deducted in computing the paid-up capital in respect of that class of shares after May 22, 1985 and before that time. [NOTE: Application provisions are not included in the consolidated text; see relevant amending Acts and regulations.] R.S., 1985, c. 1 (5th Supp.), s. 84.1; 1994, c. 7, Sch. II, s. 63, Sch. VIII, s. 34; 1998, c. 19, s. 115; 2000, c. 12, s. 142; 2001, c. 17, s. 61 2021, c. 21, s. 2 2024, c. 15, s. 17 2026, c. 3, s. 21