Income Tax Act — I-3.3 149.2
Material and insignificant interests 149.2 (1) In this section and section 149.1, (a) a person has, at any time, a material interest in respect of a class of shares of the capital stock of a corporation if, at that time, (i) the percentage of the shares of that class held by the person exceeds 0.5% of all the issued and outstanding shares of that class, or (ii) the fair market value of the shares so held exceeds $100,000; and (b) a private foundation has, at any time, an insignificant interest in respect of a class of shares of the capital stock of a corporation if, at that time, the percentage of shares of that class held by the private foundation does not exceed 2% of all the issued and outstanding shares of that class. Material transaction — anti-avoidance (2) If a private foundation or a relevant person in respect of the private foundation has engaged in one or more transactions or series of transactions or events, a purpose of which may reasonably be considered to be to avoid the application of the definition material transaction , each of those transactions or series of transactions or events is deemed to be a material transaction. Ownership (2.1) For the purposes of the definition equity percentage , and subparagraph (b)(iii) of the definition exempt shares , in subsection 149.1(1), a person who, if paragraph 251(5)(b) applied would be deemed by that paragraph to have the same position in relation to the control of a corporation as if the person owned a share, is deemed to own the share. Net increase in excess corporate holdings percentage (3) The net increase in the excess corporate holdings percentage of a private foundation for a taxation year, in respect of a class of shares of the capital stock of a corporation, is the number of percentage points, if any, determined by the formula A - B where A is the excess corporate holdings percentage of the private foundation at the end of the taxation year, in respect of the class, and B is (a) 0%, if (i) at the beginning of the taxation year the private foundation was not both a private foundation and a registered charity, or (ii) the private foundation was both a registered charity and a private foundation on March 18, 2007 and the taxation year is the first taxation year of the private foundation that begins after that date; and (b) in any other case, the excess corporate holdings percentage of the private foundation in respect of the class at the end of its preceding taxation year. Net decrease in excess corporate holdings percentage (4) The net decrease in the excess corporate holdings percentage of a private foundation for a taxation year, in respect of a class of shares of the capital stock of a corporation, is the number of percentage points, if any, by which the percentage determined for B in the formula in subsection (3) for the taxation year exceeds the percentage determined for A in that formula for the taxation year. Allocation of net increase in excess corporate holdings percentage (5) For the purpose of the description of B in the definition divestment obligation percent-age in subsection 149.1(1), the net increase in the excess corporate holdings percentage of a private foundation in respect of a class of shares of the capital stock of a corporation, for a taxation year (in this subsection referred to as the “current year”) is to be allocated in the following order: (a) first to the divestment obligation percent-age of the private foundation in respect of that class for the current year, to the extent that the private foundation has in the current year acquired for consideration shares of that class; (b) then to the divestment obligation percent-age of the private foundation in respect of that class for its fifth subsequent taxation year, to the extent of the lesser of (i) that portion of the net increase in the excess corporate holdings percentage of the private foundation in respect of that class for the current year that is not allocated under paragraph (a),