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Continuity Rule

Continuity Rule (Une erreur comptable peut-elle entraîner un impôt supplémentaire? · A post-spinoff amalgamation may taint the spin-off) — "However if, as a fi…

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  • Final-step amalgamation of Newco and Subco may trigger s. 55(3)(a)(ii)
  • The result applies if the amalgamation occurs as a final step
  • Newco and Subco amalgamate to form Amalco
  • Unrelated persons receive shares of Amalco
  • Under s. 55(3.01)(b), those persons are deemed to have acquired a 30% interest in Newco
  • The deemed acquisition causes s. 55(3)(a)(ii) to be triggered
  • The rule may produce anomalous results in the context of an amalgamation
  • Summary of Marissa Halil, David Carolin, and Manu Kakkar, “Paragraph 55(3.01)(b) Continuity Rule for Amalgamation Could Cause Anomalous Results,” Tax for the Owner-Manager, Vol. 26, No. 4, October 2026, p. 1
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Continuity Rule

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Une erreur comptable peut-elle entraîner un impôt supplémentaire?

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"However if, as a final step, Newco and Subco amalgamate, s. 55(3)(a)(ii) instead will be triggered because the unrelated persons, by receiving shares of Amalco, will effectively be deemed under s. 55(3.01)(b) to have acquired a 30% interest in Newco.\n\nNeal Armstrong. Summary of Marissa Halil, David Carolin, and Manu Kakkar, \"Paragraph 55(3.01)(b) Continuity Rule for Amalgamation Could Cause Anomalous Results,\" Tax for the Owner-Manager, Vol. 26, No. 4, October 2026, p. 1 under s. 55(3.01)(b).\n\n8 October 2026 - 12:18am"

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