CRA indicates no prohibition against the use of the intergenerational transfer rules on a simultaneous sale of 2 QSBCS corps (one a specified group entity) to a childco

One of the “intergenerational transfer” rule requirements, in s. 84.1(2.31)(a) or (2.32)(a), is that a previous inter-generational exception to s. 84.1 has not previously been sought. In 2024-1038231C6, CRA addressed the situation where a parent, who has not previously sought out the intergenerational exception, simultaneously disposes of subject shares to two separate purchaser corporations, each wholly-owned by an adult child. CRA indicated that the s. 84.1(2.31)(a) or (2.32)(a) exception could be met on the basis that the two (or multiple) dispositions occur at the same time as part of the same genuine intergenerational transfer.

Now, CRA has provided essentially the same response to a variation on this transaction. An individual, who held all the shares of Opco, which were qualified small business corporation shares (QSBCS), and all of the shares (also QSBCS) of Realtyco, which was a specified group entity and whose sole asset was a commercial building leased to Opco, simultaneously sold all those shares to a corporation wholly owned by her adult child.

CRA indicated that if such simultaneous sale occurred in the context of the same bona fide intergenerational transfer of the business, and no exception had previously been claimed in respect of the same business carried on, the s. 84.1(2.31)(a) or (2.32)(a) condition would be satisfied for each disposition.

Neal Armstrong. Summary of 9 October 2025 APFF Roundtable, Q.6 under s. 84.1(2.31)(a).