31 October 2011 External T.I. 2011-0422981E5 F - Whether property is eligible for a bump -- summary under Subparagraph 88(1)(c)(vi)

In 2000, an individual ("Parent") subscribes cash on the incorporation of "Parentco" with Parentco purchasing marketable securities a few hours later. In 2010, Parent sells his shares of Parentco to his child, who then transfers the shares of Parentco to a newly incorporated corporation ("Childco"), and winds-up Parentco.

The bump will not be available to Childco on the winding-up of Parentco because Parent (and, thus, Childco under s. 88(1)(d.2)) will be considered to have acquired control of Parentco at the time of its incorporation (and before the issuance of any shares of Parentco to Parent), at which time Parentco will not hold the marketable securities. Furthermore, the marketable securities would be ineligible property under s. 88(1)(c)(v) where they were acquired by Parentco from a person not dealing at arm's length with Enfantco (i.e., Parent) as part of a series of transactions in which Childco last acquired control of Parentco.

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