Over the years, A made advances (the "Debt") to Aco which it wholly owned, and then sold all the shares of A to an arm’s length purchaser, as well as the Debt for nominal consideration. What are the consequences of the repayment by Aco of the Debt held by B?
CRA indicated that if the Debt was not capital property, “the partial or total repayment of the Debt would give rise to business income to B, and not to a capital gain.”