One of the “intergenerational transfer” rule requirements, in s. 84.1(2.31)(a) or (2.32)(a), is that a previous inter-generational exception to s. 84.1 has not previously been sought. Where a parent, who has not previously sought out the exception, simultaneously disposes of subject shares to two separate purchaser corporations, each wholly-owned by an adult child, could the s. 84.1(2.31)(a) or (2.32)(a) exception be met?
CRA noted that the Explanatory Notes described Finance’s Technical Notes describe the purpose of the s. 84.1(2.31)(a) and (2.32)(a) condition as follows:
This new provision is intended to ensure that the taxpayer’s interest business is effectively transferred only once from a taxpayer to their child. This condition precludes the use of s. 84.1(2)(e) by a taxpayer which receives successive distributions of corporate surplus in the form of capital gains in respect of the same business.
On that basis, and considering the wording of these provisions, provided multiple dispositions occur at the same time as part of the same genuine intergenerational transfer (and of course as long as there is no exception that has been claimed before the transfer) CRA would consider the condition would be satisfied for each disposition.