Income Tax Act — I-3.3 212.3
ember’s interest — held directly or indirectly through one or more other partnerships — in the partnership is of the fair market value, at that time, of all direct interests in the partnership; (e) if a member of a partnership enters into a transaction, or participates in an event, with the partnership, paragraph (a) does not apply to the transaction or event to the extent that the transaction or event would, in the absence of this paragraph, be deemed by paragraph (a) to have been entered into, or participated in, as the case may be, by the member; and (f) a person or partnership that is (or is deemed by this paragraph to be) a member of a particular partnership that is a member of another partnership is deemed to be a member of the other partnership. Trusts (26) For the purposes of this section, subsection 17.1(1) (as it applies in respect of a pertinent loan or indebtedness as defined in subsection (11)), paragraph 128.1(1)(c.3) and subsection 219.1(2), and for the purpose of paragraph 251(1)(a) as it applies for the purposes of those provisions, (a) in determining, at any time, whether two persons are related to each other or whether any person is controlled by any other person or group of persons, it shall be assumed that (i) each trust is a corporation having a capital stock of a single class of voting shares divided into 100 issued shares, and (ii) each beneficiary under a trust owned at that time the number of issued shares of that class determined by the formula A/B × 100 where A is the fair market value at that time of the beneficiary’s interest in the trust, and B is the total fair market value at that time of all beneficiaries’ interests in the trust; (b) in determining, at any time, the extent to which any person owns shares of the capital stock of a corporation, if at that time a trust resident in Canada owns (determined without reference to this paragraph) shares of the capital stock of the corporation, each beneficiary of the trust is deemed to own, and the trust is deemed not to own, at that time, the shares of each class of the capital stock of the corporation that are owned (determined without reference to this paragraph) by the trust, the number of which is determined by the formula A × B/C where A is the total number of shares of the class of the capital stock of the corporation that are owned (determined without reference to this paragraph) by the trust at that time, B is the fair market value, at that time, of the beneficiary’s interest in the trust, and C is the total fair market value, at that time, of all beneficiaries’ interests in the trust; and (c) if a beneficiary’s share of the income or capital of a trust depends on the exercise by any person of, or the failure by any person to exercise, any discretionary power, then the amounts determined for A and B in paragraph (a), and for B and C in paragraph (b), in respect of the beneficiary are deemed to be equal to one, unless (i) the trust is resident in Canada, and (ii) it cannot reasonably be considered that one of the main reasons for the discretionary power is to avoid or limit the application of paragraph 128.1(1)(c.3) or subsection 212.3(2) or 219.1(2). [NOTE: Application provisions are not included in the consolidated text; see relevant amending Acts and regulations.] 2012, c. 31, s. 49; 2013, c. 34, s. 427; 2014, c. 39, s. 65; 2017, c. 33, s. 75 2021, c. 23, s. 53 2023, c. 26, s. 63