Messrs. A and B, who dealt with each other at arm’s length, and were equal shareholders of OPCO, each transferred their shares under s. 85(1) to a newly-formed holding company (HOLDCO AB) for equal shareholdings of HOLDCO AB. CRA found that s. 256(7)(d) deemed there to be no acquisition of control of OPCO given that:
[T]he shares of the capital stock of OPCO were disposed of to another corporation (HOLDCO AB) for consideration that included shares of the capital stock of HOLDCO AB and immediately after the time of the disposition HOLDCO AB and OPCO were controlled by a group of persons (Mr. A and Mr. B) who controlled OPCO immediately before that time without having ceased, as part of the series of transactions or events that included the disposition, to control HOLDCO AB