Income Tax Act — I-3.3 7
isposition exceeds (ii) the total amount payable by the taxpayer to acquire the new securities under the new option does not exceed the amount, if any, by which (iii) the total value of the old securities immediately before the disposition exceeds (iv) the amount payable by the taxpayer to acquire the old securities under the exchanged option, for the purposes of this section, (d) the taxpayer is deemed (other than for the purposes of subparagraph (9)(d)(ii)) not to have disposed of the exchanged option and not to have acquired the new option, (e) the new option is deemed to be the same option as, and a continuation of, the exchanged option, and (f) if the designated person is not the particular person, the designated person is deemed to be the same person as, and a continuation of, the particular person. Rules where securities exchanged (1.5) For the purposes of this section and paragraphs 110(1)(d) to (d.1), where (a) a taxpayer disposes of or exchanges securities of a particular qualifying person that were acquired by the taxpayer under circumstances to which subsection (1.1) applied (in this subsection referred to as the “exchanged securities”), (b) the taxpayer receives no consideration for the disposition or exchange of the exchanged securities other than securities (in this subsection referred to as the “new securities”) of (i) the particular qualifying person, (ii) a qualifying person with which the particular qualifying person does not deal at arm’s length immediately after the disposition or exchange, (iii) a corporation formed on the amalgamation or merger of the particular qualifying person and one or more other corporations, (iv) a mutual fund trust to which the particular qualifying person has transferred property in circumstances to which subsection 132.2(1) applied, or (v) a qualifying person with which the corporation referred to in subparagraph (iii) does not deal at arm’s length immediately after the disposition or exchange, and (c) the total value of the new securities immediately after the disposition or exchange does not exceed the total value of the old securities immediately before the disposition or exchange, the following rules apply: (d) the taxpayer is deemed not to have disposed of or exchanged the exchanged securities and not to have acquired the new securities, (e) the new securities are deemed to be the same securities as, and a continuation of, the exchanged securities, except for the purpose of determining if the new securities are identical to any other securities, (f) the qualifying person that issued the new securities is deemed to be the same person as, and a continuation of, the qualifying person that issued the exchanged securities, and (g) where the exchanged securities were issued under an agreement, the new securities are deemed to have been issued under that agreement. Emigrant (1.6) For the purposes of this section and paragraph 110(1)(d.1), a taxpayer is deemed not to have disposed of a share acquired under circumstances to which subsection (1.1) applied solely because of subsection 128.1(4). Rights ceasing to be exercisable (1.7) For the purposes of subsections (1) and 110(1), if a taxpayer receives at a particular time one or more particular amounts in respect of rights of the taxpayer to acquire securities under an agreement referred to in subsection (1) ceasing to be exercisable in accordance with the terms of the agreement, and the cessation would not, if this Act were read without reference to this subsection, constitute a transfer or disposition of those rights by the taxpayer, (a) the taxpayer is deemed to have disposed of those rights at the particular time to a person with whom the taxpayer was dealing at arm’s length and to have received the particular amounts as consideration for the disposition; and (b) for the purpose of determining the amount, if any, of the benefit that is deemed to have been received as a consequence of the disposition referred to in paragraph (a),