Example V: Excluded business based on prior 5 years (pp. 33-34)
Farmco’s shareholders are Father, Mother and a Family Trust for Child 1 and Child 2. For 6 of the last 7 years, Child 2 (aged over 18) has worked on average of more than 20 hours per week during the 40-week period of operation of the farming business of Farmco, but in the most recent year, Child 2 took the summer off and did not achieve the 20 hours average.
A dividend paid by Farmco to Family Trust and distributed by it to the children including Child 2 is an excluded amount derived directly or indirectly from an “excluded business” given that Child 2 (the specified individual) was actively engaged etc. in the related business for five prior taxation years.