A. Assuming that a group of children are the indirect purchasers of the subject shares, must it be the same individual who meets the “activity threshold” in s. 84.1(2.31)(f)(ii) or 84.1(2.32)(g)(ii) of being actively engaged on a regular, continuous and substantial basis (within the meaning of s. 120.4(1.1)(a)) in a relevant business of the subject corporation or a relevant group entity throughout the relevant period, or can it be different members of the group of children provided there is at least one member from the group of children who meets the threshold at all times throughout the relevant period?
CRA responded that, provided that at least one member from the group of children meets the activity threshold at all times throughout the relevant period, it would consider that the condition in proposed s. 84.1(2.31)(f)(ii) and 84.1(2.32)(g)(ii) to be met.
B. Would this condition be met if there is an individual who, prior to the transfer of the subject shares, worked full-time in the relevant business for 5 years?
CRA indicated that (consistent with the stated purpose of ensuring the continued involvement of the taxpayer’s children in the acquired business) any previous engagement or involvement by a child prior to the disposition of the subject shares by the parent to the purchaser corporation would not be considered in determining whether the condition in proposed s. 84.1(2.31)(f)(ii) or 84.1(2.32)(g)(ii) was met.
C. If there are multiple businesses being carried on by several different corporations, would this condition be met if an individual is only considered to be actively engaged on a regular, continuous and substantial basis in one of the businesses?
CRA indicated that an individual need only meet the activity threshold in a relevant business of a subject corporation or relevant group entity in relation to that subject corporation. If there was more than one subject corporation which had been disposed of, the same condition would have to be satisfied respecting each subject corporation or a relevant group entity in relation to it.