A held 50% of the voting common shares of AB Inc. and his brother (B) held 37.5% of such shares directly and another 12.5% were held by B’s wholly-owned corporation (B Inc.) In finding that the two corporations were associated under s. 256(1)(d), CRA stated:
[T]he person (in the particular situation, B) who controls one of the two corporations (…B Inc.), directly or indirectly, in any manner whatever, was related to each member of the group of persons (…A and B) who control the other corporation (…AB Inc.), directly or indirectly, in any manner whatsoever, and that person (in the particular situation, B) holds at least 25% of the issued shares of a class, other than a specified class, of the capital stock of the other corporation (…AB Inc.).
… [I]n order to determine whether B is related to each member of the group that controls AB Inc., B, as owner of shares of the capital stock of B Inc. and AB Inc., would be deemed, as a shareholder of B Inc., to be related to himself as a shareholder of AB Inc. by virtue of subsection 256(1.5).