Income Tax Act — I-3.3 191
aunt, uncle, niece or nephew of another person, the particular person and any person who is a child or descendant of the particular person shall be deemed to be related to the other person and to any person who is the child or descendant of the other person, or (iii) a trust in which only one person (other than a registered charity) is beneficially interested, shall be deemed not to have a substantial interest in a corporation; and (e) where at any time a shareholder holds a share of the capital stock of a corporation to which paragraph (g) of the definition taxable preferred share in subsection 248(1) or paragraph (e) of the definition taxable RFI share in that subsection applies to deem the share to be a taxable preferred share or a taxable RFI share, the shareholder shall be deemed not to have a substantial interest in the corporation at that time. Deemed dividends (4) Where at any particular time (a) a share of the capital stock of a corporation is issued, (b) the terms or conditions of a share of the capital stock of a corporation are changed, or (c) an agreement in respect of a share of the capital stock of a corporation is changed or entered into, and the terms or conditions of the share or the agreement in respect of the share specify an amount in respect of the share, including an amount for which the share is to be redeemed, acquired or cancelled (together with, where so provided, any accrued and unpaid dividends thereon) and where paragraph 191(4)(a) applies, the specified amount does not exceed the fair market value of the consideration for which the share was issued, and where paragraph 191(4)(b) or 191(4)(c) applies, the specified amount does not exceed the fair market value of the share immediately before the particular time, the amount of any dividend deemed to have been paid on a redemption, acquisition or cancellation of the share to which subsection 84(2) or 84(3) applies shall (d) for the purposes of this Part and section 187.2, be deemed to be an excluded dividend and an excepted dividend, respectively, unless (i) where paragraph 191(4)(a) applies, the share was issued for consideration that included a taxable preferred share, or (ii) where paragraph 191(4)(b) or 191(4)(c) applies, the share was, immediately before the particular time, a taxable preferred share, and (e) be deemed not to be a dividend to which subsection 112(2.1) or 138(6) applies to deny a deduction with respect to the dividend in computing the taxable income of a corporation under subsection 112(1) or 112(2) or 138(6), unless (i) where paragraph 191(4)(a) applies, the share was issued for consideration that included a term preferred share or for the purpose of raising capital or as part of a series of transactions or events the purpose of which was to raise capital, and (ii) where paragraph 191(4)(b) or 191(4)(c) applies, the share was, immediately before the particular time, a term preferred share, or the terms or conditions of the share were changed, or the agreement in respect of the share was changed or entered into for the purpose of raising capital or as part of a series of transactions or events the purpose of which was to raise capital. Where s. (4) does not apply (5) Subsection (4) does not apply to the extent that the total of (a) the amount paid on the redemption, acquisition or cancellation of the share, and (b) all amounts each of which is an amount (other than an amount deemed by subsection 84(4) to be a dividend) paid, after the particular time and before the redemption, acquisition or cancellation of the share, on a reduction of the paid-up capital of the corporation in respect of the share exceeds the specified amount referred to in subsection (4). Excluded dividend — partner (6) If at any time a corporation pays a dividend to a partnership, the corporation is, for the purposes of this subsection and paragraph (a) of the definition excluded dividend in subsection (1), deemed to have paid at that time to each member of the