24 February 2003 External T.I. 2002-014995

There is no basis for extending the administrative practice in IT-474 (allowing a taxpayer not to comply with the procedure set out in section 116 in respect of the deemed disposition of old shares on an amalgamation to which s. 87(4) is applicable) to the wind-up of a public corporation as described in s. 88(2), where the distribution by the corporation of its assets to shareholders, including non-resident shareholders, occurs after the shares are delisted from a prescribed stock exchange.

"CCRA's" Comments on Section 116 Issues", Tax Topics, No. 1576, 23 May, 2002, p. 1.

A Canadian public company ("Pubco 1") carries out a share consolidation under which each 100 pre-consolidation shares are replaced by one post-consolidation share and with each fractional post-consolidation share being repurchased for cash not exceeding $200.

"The dispositions, by the shareholders of Pubco 1, of the post-consolidation fractional Pubco 1 shares, will not, in and by themselves, cause the share consolidation ... to fall outside the circumstances described in Interpretation Bulletin IT-65. However, the shareholders of Pubco 1 should report any gain or loss, realized or incurred by them from the disposition of their fractional shares."