II, s. 198, c. 21, s. 1141995, c. 3, s. 55, c. 21, s. 441998, c. 19, s. 2462001, c. 17, ss. 194, 2312005, c. 19, s. 552009, c. 2, s. 782013, c. 34, ss. 37, 364, c. 40, s. 932014, c. 39, s. 762016, c. 12, s. 672017, c. 33, s. 79
256.1(1)The following definitions apply in this section.attribute trading restrictionattribute trading restrictionmeans a restriction on the use of a tax attribute arising on the application, either alone or in combination with other provisions, of any of this section, subsections 10(10) and 13(24), section 37, subsections 66(11.4) and (11.5), 66.7(10) and (11), 69(11) and 88(1.1) and (1.2), sections 111 and 127 and subsections 181.1(7), 190.1(6), 249(4) and 256(7). (restriction au commerce d’attributs)personpersonincludes a partnership. (personne)specified provisionspecified provisionmeans any of subsections 10(10) and 13(24), paragraph 37(1)(h), subsections 66(11.4) and (11.5), 66.7(10) and (11), 69(11) and 111(4), (5), (5.1) and (5.3), paragraphs (j) and (k) of the definitioninvestment tax creditin subsection 127(9), subsections 181.1(7) and 190.1(6) and any provision of similar effect. (dispositions déterminées)Marginal note:Application of subsection (3)(2)Subsection (3) applies at a particular time in respect of a corporation if(a)shares of the capital stock of the corporation held by a person, or the total of all shares of the capital stock of the corporation held by members of a group of persons, as the case may be, have at the particular time a fair market value that exceeds 75% of the fair market value of all the shares of the capital stock of the corporation;(b)shares, if any, of the capital stock of the corporation held by the person, or the total of all shares, if any, of the capital stock of the corporation held by members of the group, have immediately before the particular time a fair market value that does not exceed 75% of the fair market value of all the shares of the capital stock of the corporation;(c)the person or group does not control the corporation at the particular time; and(d)it is reasonable to conclude that one of the main reasons that the person or group does not control the corporation is to avoid the application of one or more specified provisions.Marginal note:Deemed acquisition of control(3)If this subsection applies at a particular time in respect of a corporation, then for the purposes of the attribute trading restrictions,(a)the person or group referred to in subsection (2)(i)is deemed to acquire control of the corporation, and each corporation controlled by the corporation, at the particular time, and(ii)is not deemed to have control of the corporation, and each corporation controlled by the corporation, at any time after the particular time solely because this paragraph applied at the particular time; and(b)during the period that the condition in paragraph (2)(a) is satisfied, each corporation referred to in paragraph (a) — and any corporation incorporated or otherwise formed subsequent to that time and controlled by that corporation — is deemed not to be related to, or affiliated with, any person to which it was related to, or affiliated with, immediately before paragraph (a) applies.Marginal note:Special rules(4)For the purpose of applying paragraph (2)(a) in respect of a person or group of persons,(a)if it is reasonable to conclude that one of the reasons that one or more transactions or events occur is to cause a person or group of persons not to hold shares having a fair market value that exceeds 75% of the fair market value of all the shares of the capital stock of a corporation, the paragraph is to be applied without reference to those transactions or events; and(b)the person, or each member of the group, is deemed to have exercised each right that is held by the person or a member of the group and that is referred to in paragraph 251(5)(b) in respect of a share of the corporation referred to in paragraph (2)(a).Marginal note:Deeming rules — if share value nil(5)For the purposes of subsections (2) to (4), if the fair market value of the shares of the capital stock of a corporation is nil at any time, then for the purpose of determining the fair market value of those shares, the corporation is deemed, at that time, to have assets net of liabilities equal to $100,000 and to have $100,000 of income for the taxation year that includes that time.Marginal note:Deemed acquisition of control(6)If, at any time as part of a transaction or event or series of transactions or events, control of a particular corporation is acquired by a person or group of persons and it can reasonably be concluded that one of the main reasons for the acquisition of control is so that a specified provision does not apply to one or more corporations, the attribute trading restrictions are deemed to apply to each of those corporations as if control of each of those corporations were acquired at that time.
(a)shares of the capital stock of the corporation held by a person, or the total of all shares of the capital stock of the corporation held by members of a group of persons, as the case may be, have at the particular time a fair market value that exceeds 75% of the fair market value of all the shares of the capital stock of the corporation;(b)shares, if any, of the capital stock of the corporation held by the person, or the total of all shares, if any, of the capital stock of the corporation held by members of the group, have immediately before the particular time a fair market value that does not exceed 75% of the fair market value of all the shares of the capital stock of the corporation;(c)the person or group does not control the corporation at the particular time; and(d)it is reasonable to conclude that one of the main reasons that the person or group does not control the corporation is to avoid the application of one or more specified provisions.
(a)the person or group referred to in subsection (2)(i)is deemed to acquire control of the corporation, and each corporation controlled by the corporation, at the particular time, and(ii)is not deemed to have control of the corporation, and each corporation controlled by the corporation, at any time after the particular time solely because this paragraph applied at the particular time; and(b)during the period that the condition in paragraph (2)(a) is satisfied, each corporation referred to in paragraph (a) — and any corporation incorporated or otherwise formed subsequent to that time and controlled by that corporation — is deemed not to be related to, or affiliated with, any person to which it was related to, or affiliated with, immediately before paragraph (a) applies.
(i)is deemed to acquire control of the corporation, and each corporation controlled by the corporation, at the particular time, and(ii)is not deemed to have control of the corporation, and each corporation controlled by the corporation, at any time after the particular time solely because this paragraph applied at the particular time; and
(a)if it is reasonable to conclude that one of the reasons that one or more transactions or events occur is to cause a person or group of persons not to hold shares having a fair market value that exceeds 75% of the fair market value of all the shares of the capital stock of a corporation, the paragraph is to be applied without reference to those transactions or events; and(b)the person, or each member of the group, is deemed to have exercised each right that is held by the person or a member of the group and that is referred to in paragraph 251(5)(b) in respect of a share of the corporation referred to in paragraph (2)(a).
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]2013, c. 40, s. 942016, c. 12, s. 68
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]1970-71-72, c. 63, s. 1 “257”1977-78, c. 1, s. 100, c. 22, s. 26(F)1980-81-82-83, c. 140, s. 1321986, c. 6, s. 128
258(2)Notwithstanding subsection 15(3), an amount paid or payable after 1978 as interest on or as an amount in lieu of interest in respect of(a)any interest or dividend payable after November 16, 1978 on an income bond or an income debenture issued before November 17, 1978 or pursuant to an agreement in writing made before that date, or(b)a dividend that became payable or in arrears after November 16, 1978 on a share of the capital stock of a corporation that is not a term preferred share by reason of having been issued before November 17, 1978 or pursuant to an agreement in writing made before that date,shall, for the purposes of subsections 112(2.1) and 138(6), be deemed to be a dividend received on a term preferred share.Marginal note:Deemed interest on preferred shares(3)Subject to subsection 258(4), for the purposes of paragraphs 12(1)(c) and 12(1)(k) and sections 113 and 126, each amount that is a dividend received in a taxation year on(a)a term preferred share by a specified financial institution resident in Canada from a corporation not resident in Canada, or(b)any other share that(i)is a grandfathered share, or(ii)was issued before 8:00 p.m