7 October 2011 Roundtable, 2011-0412121C6 F - Interaction between S. 84.1 and S. 85(2.1) -- summary under Subsection 84.1(1)

Where shares with a high PUC and low ACB are transferred by an individual under s. 85(1) to Holdco for shares with the same high-low attributes, s. 84.1(1) takes precedence over s. 85(2.1), so that a "grind" of paid-up capital will not occur under the s. 85(2.1) formula given the satisfaction of all the conditions for the application of s. 84.1(1), even though the grind under s. 84.1(1)(a) is nil (i.e., s. 84.1 is still considered to "apply" in that circumstance).