2022 Ruling 2022-0930901R3 F - Changes to an existing monetization arrangement -- summary under Section 80.6

A monetization arrangement that was grandfathered from application of the synthetic disposition rules for deferring gain on the shareholding of a holding company (“Holdco A”) in a public company entailed a secured loan from a financial institution (“FI”) to Holdco A and a cash-settlement forward contract between Holdco A and FI. A reference index (replaced as ruled upon in 2021-0880641R3 F) was used in determining both the interest rate under the loan and the reference price under the Forward Agreement. CRA ruled that amendments (represented not to give rise to a novation) to the forward contract to provide for the right to accelerate the maturity date under the forward contract in respect of part of the reference shares would not engage the application of s. 80.6.