The summary (which is more specific than the actual question) describes an estate freeze in which a taxpayer exchanges his common shares of a corporation for preferred shares of the same corporation, with the purchase price and the value of the preferred shares being subject to a price adjustment clause. (New) common shares of the corporation then are issued to a discretionary family trust.
CRA was asked whether the price adjustment clause will prevail if CRA seeks to apply s. 75(2), and whether this depends on whether the preferred shares are still held by the taxpayer at the time of such assessment. CRA stated (TaxInterpretations translation):
In the case of an estate freeze, if the price adjustment clause is valid and the taxpayer makes the necessary changes to the price of the common shares, the redemption value of the freeze preferred shares received and the amount that would have been received for the redeemed freeze preferred shares (by arranging for the corporation to make a refund or payment for the difference, as the case may be), the CRA will consider the tax consequences of the freeze taking into account that clause. Those tax implications will include consideration of the conditions for the application of subsection 75(2). Therefore, it is not necessary for the price adjustment clause to specifically mention that it will also apply for the purposes of subsection 75(2).
...If the CRA recognizes the price adjustment clause as valid in a particular situation, under the wording of such a clause, it may result in a retroactive adjustment to the redemption value of the freeze preferred shares. In the situation you submitted to us, the preferred freeze shares have not been redeemed. Consequently, even if an estate freeze occurred in a statute-barred year, the price adjustment clause that would result in a change in the redemption value of the freeze preferred shares would have an effect in respect of the years following the freeze during which those shares were redeemed.