CRA rules on a post-mortem pipeline where there was a change in the business of the subject corporation while in the hands of the estate

CRA ruled on post-mortem pipeline transactions where, following preliminary transactions to fully utilize the ERDTOH, NERDTOH, and CDA balances of the Opco held by the estate of the deceased, the estate will transfer its remaining common shares of Opco to the Newco in consideration mostly for a promissory note of Newco, Newco and Opco will amalgamate to form Amalco after the passage of at least one year, and the note will then be repaid on a quarterly basis.

A somewhat unusual fact is that, after the death of the deceased, Opco ceased to carry on a professional services business and only carried on an investment business focused on high-growth investing.

Neal Armstrong. Summary of 2024 Ruling 2024-1037251R3 F under s. 84(2).