ACo repurchased all the shares held by one of its 50% shareholders so that there was an acquisition of control (“AOC”) by the other shareholder and a consequential deemed dividend. Will the resulting dividend refund to ACo arise in its new taxation year commencing as a result of the AOC, and would the answer be affected by whether ACo elects under s. 256(9) for the AOC to occur at the time of its actual occurrence rather than at the beginning of the day?
CRA indicated that, either way, the dividend refund to ACo computed under s. 129(1)(a) would be for its new taxation year.