8 October 2004 APFF Roundtable Q. 15, 2004-0086821C6 F - Interaction of 84(3) and 69(1)(b) -- summary under Paragraph 69(1)(b)

Respecting the situation where a subsidiary purchases for cancellation a portion of the common shares in its capital held by its wholly-owning parent, CRA noted that s. 69(1)(b) would apply only for capital gains purposes and not for purposes of determining the amount of a deemed dividend under s. 84(3), given that the presumption in s. 69(1)(b) applied only with respect to the person disposing of property.