Where the dividend resulting under s. 84(3) from a redemption of shares exceeds the safe income stipulated in ss. 55(5)(b) to 55(5)(d), will it be treated as a separate taxable dividend of the recipient corporation under s. 55(5)(f)?
CRA responded (TI translation):
This designation [s. 55(2.1)(f)] can be made in respect of a dividend deemed to be received under subsection 84(3). Moreover, as your question does not apply to a stock dividend, subsection 55(2.3)…will not apply.
The amount of the excess dividend that is taxable to the party designated by the corporation pursuant to subparagraph 55(5)(f)(i) is deemed to be a separate taxable dividend.