Income Tax Act — I-3.3 132.2
Definitions re qualifying exchange of mutual funds 132.2 (1) The following definitions apply in this section. first post-exchange year , of a fund in respect of a qualifying exchange, means the taxation year of the fund that begins immediately after the acquisition time. ( première année suivant l’échange ) qualifying exchange means a transfer at any time (in this section referred to as the “transfer time”) if (a) the transfer is a transfer of all or substantially all of the property (including an exchange of a unit of a mutual fund trust for another unit of that trust) of (i) a mutual fund corporation (other than a SIFT wind-up corporation) to one or more mutual fund trusts, or (ii) a mutual fund trust to a mutual fund trust; (b) all or substantially all of the shares issued by the mutual fund corporation referred to in subparagraph (a)(i) or the first mutual fund trust referred to in subparagraph (a)(ii) (in this section referred to as the “transferor”) and outstanding immediately before the transfer time are within 60 days after the transfer time disposed of to the transferor; (c) no person disposing of shares of the transferor to the transferor within that 60-day period (otherwise than pursuant to the exercise of a statutory right of dissent) receives any consideration for the shares other than units of one or more mutual fund trusts referred to in subparagraph (a)(i) or the second mutual fund trust referred to in subparagraph (a)(ii) (in this section referred to as a “transferee” and, together with the transferor, as the “funds”); (d) if property of the transferor has been transferred to more than one transferee, (i) all shares of each class of shares, that is recognized under securities legislation as or as part of an investment fund, of the transferor are disposed of to the transferor within 60 days after the transfer time, and (ii) the units received in consideration for a particular share of a class of shares, that is recognized under securities legislation as or as part of an investment fund, of the transferor are units of the transferee to which all or substantially all of the assets that were allocated to that investment fund immediately before the transfer time were transferred; and (e) the funds jointly so elect, by filing a prescribed form with the Minister on or before the election’s due date. ( échange admissible ) share means a share of the capital stock of a mutual fund corporation and a unit of a mutual fund trust. ( action ) Timing (2) In respect of a qualifying exchange, a time referred to in the following list immediately follows the time that precedes it in the list (a) the transfer time; (b) the first intervening time; (c) the acquisition time; (d) the beginning of the funds’ first post-exchange years; (e) the depreciables disposition time; (f) the second intervening time; and (g) the depreciables acquisition time. General (3) In respect of a qualifying exchange, (a) each property of a fund, other than property disposed of by the transferor to a transferee at the transfer time and depreciable property, is deemed to have been disposed of, and to have been reacquired by the fund, at the first intervening time, for an amount equal to the lesser of (i) the fair market value of the property at the transfer time, and (ii) the greater of (A) its cost amount, and (B) the amount that the fund designates in respect of the property in a notification to the Minister accompanying the election in respect of the qualifying exchange; (a.1) in respect of each property transferred by the transferor to a transferee, including an exchange of a unit of a transferee for another unit of that transferee, the transferor is deemed to have disposed of the property to the transferee, and to have received units of the transferee as consideration for the disposition of the property, at the transfer time; (b) subject to paragraph (l), the last taxation years of the funds that began before the transfer time are deemed to have ended a