3 December 2015 External T.I. 2015-0593941E5 F - Allocation of the safe income on hand -- summary under Shares

Where Mr. A holds 99 Class A discretionary-dividend common shares of Opco and his estranged wife (Ms. A) held 1 Class B discretionary-dividend common share (issued at the same time as the Class A shares), which she has transferred under s. 85(1) to a new Holdco, CRA accepts (subject to Part IV tax considerations) the tax-free payment of all of Opco’s safe income on the 1 Class B share and, in particular, that that the fair market value of the Class B share immediately before the dividend payment reflects the amount of the declared dividend.