A subsidiary (Bco) that was wound-up under s. 88(1) into Aco had a positive balance in para. (c.2) of the capital dividend account definition due to the realization by it of an eligible capital amount. The TSO suggested that, following the wind-up, Aco should not have an addition under para. (c.2) because Aco itself had never realized an eligible capital amount. In rejecting this interpretation, the Directorate stated:
It follows from paragraph 87(2)(z.1) (as modified by paragraph 88(1)(e.2)) that, in calculating the amount of a parent's CDA after the winding-up of its subsidiary, the parent must take into account the various amounts that make up the wound-up subsidiary's CDA.