26 May 2016 IFA Roundtable Q. 10, 2016-0642101C6 - 93.2 & 95(2)(c) -- summary under Subsection 85.1(3)

S. 95(2)(c) which, insofar as relevant to the question of how it dovetails with s. 93.2, is essentially identical to s. 85.1(3). Respecting the transfer by a foreign affiliate (FA1) of Canco of all its the shares of FA2 to another non-resident subsidiary of FA1, viz., a non-share corporation (“FA3”), as a capital contribution, CRA noted that, as a technical matter, s. 93.2(3)(a) does not appear to go quite far enough so as to permit the particulars of the cost-apportionment formula in s. 95(2)(c) to be filled in. However, CRA went on to find that despite these “textual challenges,” the s. 95(2)(c) rollover would be available provided that the fair market value of the membership interest in FA3 increased by the FMV of the contributed shares.