On January 1 of a particular year, “Child”, who is 17 years, becomes the shareholder of Opco (a CCPC with a calendar year which is not managed by Child) and on April 1 of that year, Child turns 18. How does s. 256(1.3) apply in that year? CRA responded (TaxInterpretations translation):
At each moment in January, February and March, Child would be a child under 18 years of age who is the owner of the shares of the capital stock of Opco. Consequently, at any time during those three months, the shares in the capital stock of Opco held by Child would be deemed to be owned at that moment by the parent of Child for the purposes provided by subsection 256(1.3).
Given that the months of January, February and March in the particular year would fall in the course of the particular taxation year of Opco, it could be that Opco would be associated with another corporation during that taxation year by reason of one of the paragraphs of subsection 256(1) and of the presumption in subsection 256(1.3).