Income Tax Act — I-3.3 131
e capital stock of the corporation (such fair market values being determined without regard to any voting rights attaching to shares of the capital stock of the corporation). Election to be a mutual fund corporation (8.01) A corporation is deemed to be a mutual fund corporation, from the date it was incorporated until the earlier of the date the corporation meets the conditions to qualify as a mutual fund corporation under subsection (8) and December 31, 2017, if the corporation (a) was incorporated after 2014 and before March 22, 2016; (b) would have been a mutual fund corporation on March 22, 2016 if it could have elected on or before that date to be a public corporation under paragraph (b) of the definition public corporation in subsection 89(1), had the conditions prescribed in paragraph 4800(1)(b) of the Income Tax Regulations been satisfied; (c) on March 22, 2016, had at least one class of shares that was recognized under securities legislation as an investment fund; and (d) elects to have this subsection apply in the corporation’s return of income for the corporation’s first taxation year that ends after March 21, 2016. Idem (8.1) Where, at any time, it can reasonably be considered that a corporation, having regard to all the circumstances, including the terms and conditions of the shares of its capital stock, was established or is maintained primarily for the benefit of non-resident persons, the corporation shall be deemed not to be a mutual fund corporation after that time unless (a) throughout the period that begins on the later of February 21, 1990 and the day of its incorporation and ends at that time, all or substantially all of its property consisted of property other than property that would be taxable Canadian property if the definition taxable Canadian property in subsection 248(1) were read without reference to paragraph (b) of that definition; or (b) it has not issued a share (other than a share issued as a stock dividend) of its capital stock after February 20, 1990 and before that time to a person who, after reasonable inquiry, it had reason to believe was non-resident, except where the share was issued to that person under an agreement in writing entered into before February 21, 1990. Substantial interest (8.2) A corporation (other than a prescribed labour-sponsored venture capital corporation) is deemed not to be a mutual fund corporation after a particular time if, at that time, (a) a person or partnership, or any combination of persons or partnerships that do not deal with each other at arm’s length (in either case, referred to in this subsection and subsection (8.3) as “specified persons”) own, in the aggregate, shares of the capital stock of the corporation having a fair market value of more than 10% of the fair market value of all of the issued and outstanding shares of the capital stock of the corporation; and (b) the corporation is controlled by or for the benefit of one or more specified persons. Exception (8.3) Subsection (8.2) does not apply to a corporation if, at the particular time referred to in that subsection, (a) the corporation was incorporated not more than two years before the particular time; and (b) the aggregate fair market value of the shares of the capital stock of the corporation owned by specified persons does not exceed $5,000,000. Reduction of refundable capital gains tax on hand (9) Notwithstanding any other provision of this section, the amount determined for A in the definition refundable capital gains tax on hand in subsection 131(6) in respect of the 1972 or 1973 taxation year of a corporation is, (a) in respect of its 1972 taxation year, 91.25% of the amount so determined; and (b) in respect of its 1973 taxation year, the total of (i) 91.25% of that proportion of the amount so determined that the number of days in that portion of the year that is before 1973 is of the number of days in the whole year, and (ii) 100% of that proportion of the amount so determined that the