Income Tax Regulations — 6201
ssued and outstanding at the last time, before the particular time, at which the other corporation or a restricted financial institution with which the other corporation does not deal at arm’s length acquired a share of that class, where no dividend is received at the particular time by any such corporation in respect of a share (other than a share prescribed under subsection (5.1)) of that class acquired after December 15, 1987 and before the particular time; or (b) 5 per cent of the shares of that class that were issued and outstanding at the last time, before the particular time, at which the other corporation or a restricted financial institution with which the other corporation does not deal at arm’s length acquired a share of that class, where a dividend is received at the particular time by any such corporation in respect of a share (other than a share prescribed under subsection (5.1)) of that class acquired after December 15, 1987 and before the particular time. (5) For the purpose of paragraph (f) of the definition term preferred share in subsection 248(1) of the Act, a share of a class of the capital stock of a corporation that is listed on a designated stock exchange in Canada is a prescribed share at any particular time with respect to another corporation that is registered or licensed under the laws of a province to trade in securities and that holds the share for the purpose of sale in the course of the business ordinarily carried on by it unless (a) it may reasonably be considered that the share was acquired as part of a series of transactions or events one of the main purposes of which was to avoid or limit the application of subsection 112(2.1) of the Act; or (b) the share was not acquired by the other corporation in the course of an underwriting of shares of that class to be distributed to the public and (i) dividends are received at the particular time by the other corporation or by the other corporation and corporations controlled by the other corporation in respect of more than 10 per cent of the issued and outstanding shares of that class, (ii) the other corporation is a restricted financial institution and (A) the share is not a taxable preferred share, (B) dividends are received at the particular time by the other corporation or by the other corporation and corporations controlled by the other corporation in respect of more than five per cent of the issued and outstanding shares of that class, and (C) a dividend is received at the particular time by the other corporation or a corporation controlled by the other corporation in respect of a share of that class acquired after December 15, 1987 and before the particular time, or (iii) the other corporation is a restricted financial institution and the share (A) is not a taxable preferred share, (B) was acquired after December 15, 1987 and before the particular time, and (C) was, by reason of subparagraph (h)(i), (ii), (iii) or (v) of the definition term preferred share in subsection 248(1) of the Act, deemed to have been issued after December 15, 1987 and before the particular time. (5.1) For the purpose of the definition taxable RFI share in subsection 248(1) of the Act, a share of a class of the capital stock of a corporation that is listed on a designated stock exchange in Canada is a prescribed share at any particular time with respect to another corporation that is registered or licensed under the laws of a province to trade in securities and that holds the share for the purpose of sale in the course of the business ordinarily carried on by it unless (a) it may reasonably be considered that the share was acquired as part of a series of transactions or events one of the main purposes of which was to avoid or limit the application of section 187.3 of the Act; or (b) the share was not acquired by the other corporation in the course of an underwriting of shares of that class to be distributed to the public and (i) dividends are received at the particular