Words and Phrases - "immediately before"

a
88
b
44
c
80
d
54
e
38
f
31
g
20
h
14
i
74
j
2
k
2
l
32
m
56
n
25
o
38
p
81
q
3
r
77
s
90
t
47
u
16
v
9
w
23
y
2

2014 Ruling 2014-0530371R3 - Combination of credit unions

Summary Under
Tax Topics - Income Tax Act - Section 88 - Subsection 88(1)
"immediately before" referenced share ownership on completion of the preceding transaction in a same-day series
Proposed transactions

Acquireco and Targetco, both of which are widely-held credit unions, wish to combine their businesses to form a single corporate entity by way of an asset sale governed by section XX of Act1. Accordingly:

  1. At XX on the Effective Date (and subject to separate treatment of shares of any Member exercising dissent rights): each class A and class C Share of Targetco will be exchanged for one class A and one Class D Share, respectively, of Acquireco; and each class D Share of Targetco will be redeemed for cash.
  2. At XX on the Effective Date as part of its winding-up, Targetco will transfer to Acquireco all its property.
  3. The Registrar will issue a Certificate of Business Acquisition pursuant to paragraph XX of Act1 showing that, on the Effective Date, Acquireco will have acquired the assets and assumed the liabilities of Targetco.
  4. Targetco will be deemed to have been dissolved on the Effective Date pursuant to section XX of Act1.
Rulings

Include that ss. 88(1)(a)(iii) and (c) apply to the winding-up. The summary states:

For the purposes of paragraph 88(1)(a), we should consider that not less than 90% of the issued shares in the subsidiary will be held by the parent "immediately before the winding-up" since all the shares of the subsidiary will be owned by the parent prior to the transfer of its assets and the assumption of its liabilities, and its ultimate dissolution… .

See summary under s. 137(4.1).

Words and Phrases
immediately before
Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 137 - Subsection 137(4.1) s. 137(4.1) inapplicable to Buyer of credit union who winds it up rather than becoming a member 263
Tax Topics - Income Tax Act - Section 85.1 - Subsection 85.1(1) credit union share-for-share exchange/ cash redemption 52

28 November 2013 External T.I. 2013-0504221E5 F - Fin d'années réputées

Summary Under
Tax Topics - Income Tax Act - Section 249 - Subsection 249(3.1)
Amalco not a continuation of predecessors for election purposes/ "immediately before" treated as one minute before

Opco, a Canadian-controlled private corporation with a September 30 year end, amalgamates on October 1 with another CCPC so that the deemed year end arising from the amalgamation coincides with Opco's normal year end. At noon on October 1, Amalco ceases to be a CCPC by issuing an option to a non-resident. Can Amalco make the s. 249(3.1) election with a view to having only one year end arising out of the transactions (September 30 of that year)?

After noting that in the absence of the election, s. 249(3.1) deemed a year end of Amalco to occur at 11:59 a.m. on October 1, CRA responded negatively (TaxInterpretations translation):

[T]he first condition provided in s. 249(3.1)(c)(i) is not satisfied. As Amalco is a new corporation by virtue of paragraph 87(2)(a) and no provision provides for a continuation of the predecessor corporations for these purposes, Amalco does not have a taxation year which would have ended in the period of seven days that ended immediately before the time when Amalco lost its CCPC status.

Words and Phrases
immediately before

Macklin v. The Queen, 92 DTC 6595, [1993] 1 CTC 21 (FCTD)

Summary Under
Tax Topics - Income Tax Act - Section 44 - Subsection 44(1)
"immediately before" interpreted purposively to refer to something broader than the instant before

In August 1979 the taxpayer decided that she wished to have a portion of a farm then owned by her husband developed as a housing subdivision. In October 1979 top soil was stripped from approximately 60 acres, in January 1980 a joint venture agreement between a real estate developer and the family corporation was signed, on April 2, 1980 (the date of her husband's death) the taxpayer acquired the beneficial ownership of the lands and sometime between April 11, 1980 and May 23, 1980 the land was disposed of to the joint venture. In finding that the lands in question including the 60 acres constituted a former business property "immediately before" their disposition, notwithstanding that after being stripped of the top soil the 60 acres could be no longer utilized as farm land, Rothstein J. stated (p. 6602):

"... The word 'immediately' must be capable of an interpretation broader than 'instantly', that is an interpretation connoting 'closely' or 'proximately'. Otherwise, an interim renting of property or property sitting idle pending disposition would disqualify the taxpayer from availing herself of the replacement property rules."

Words and Phrases
immediately before
Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Resolving Ambiguity 53