26 January 1994 External T.I. 9336015 F - Immediately After Disposition Meaning -- summary under Subsection 85(4)

It was submitted that where a taxpayer transfers property to a corporation that is controlled by the taxpayer and shortly thereafter the taxpayer disposes of its shares in the transferee corporation to an arm's length purchaser, s. 85(4) and (5.1) would not apply because the taxpayer would not control the corporation within a relatively short time after the disposition and because the taxpayer would have indirectly disposed of the property to the purchaser. RC considered that this interpretation would result in the term "immediately after the disposition" be equivalent to "at the end of the series of transactions or events". Given that the expression "series of transactions or events" is used in numerous other provisions of the Act, Parliament could not have intended that the phrase "immediately after the disposition" be given the suggested interpretation.