26 November 2020 STEP Roundtable Q. 11, 2020-0839891C6 - Subsection 104(19) -- summary under Subsection 104(19)

A Canadian resident personal trust receives a dividend from ACo., and distributes the dividend to B Co (a beneficiary) to which A Co is connected – but they cease to be connected corporations by December 31 of that year. CRA indicated that the connected-corporation Pt. IV tax exemption did not apply to the dividend received by B Co since the s. 104(19) designation is considered to be effective only at the end of the trust’s taxation year – at which time they were no longer connected.