{"id":759,"date":"2013-07-02T16:22:19","date_gmt":"2013-07-02T16:22:19","guid":{"rendered":"https:\/\/thor.ca\/\/blog\/?p=759"},"modified":"2025-02-12T13:29:31","modified_gmt":"2025-02-12T21:29:31","slug":"rulings-interprets-substituted-share-concept-in-stop-loss-rule","status":"publish","type":"post","link":"https:\/\/www.thor.ca\/blog\/2013\/07\/rulings-interprets-substituted-share-concept-in-stop-loss-rule\/","title":{"rendered":"Rulings interprets \u201csubstituted share\u201d concept in stop-loss rule"},"content":{"rendered":"<p>In <a href=\"http:\/\/thor.ca\/blog\/wp-content\/uploads\/2013\/07\/2012-0464901I7.pdf\">2012-0464901I7<\/a> (released last week), the Rulings Directorate concluded that the \u201csubstituted share\u201d concept, contained in proposed new s. 93(2.01) and existing s. 93(2), could apply to any sequence of property substitutions even if the property substituted within the sequence does not involve a share.  Proposed new s. 93(2.01) (and existing s. 93(2)) is a stop-loss rule that reduces a capital loss realized on a share of a foreign affiliate (FA) to the extent of prior exempt surplus dividends paid on the FA share or some other share for which that FA share was substituted.  In the example considered, Canco transferred shares of one FA (FA 1) to another FA (FA 2) in exchange for a promissory note owed by FA 2 (the Note).  Canco then transferred the Note to a third FA (FA 3) in exchange for shares of FA 3.  The Rulings Directorate said the rule in s. 248(5)(a) \u2013 which essentially ties together any sequence of property substitutions \u2013 applies for purposes of s. 93(2.01).  Further, that rule cannot be restricted in the context of s. 93(2.01) only to situations where shares are substituted throughout the sequence.  Accordingly, in the case considered, the shares of FA 3 were considered to be \u201csubstituted for shares\u201d of FA 1 notwithstanding that the intervening substituted property (the Note) did not involve a share.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In <a href=\"http:\/\/thor.ca\/blog\/wp-content\/uploads\/2013\/07\/2012-0464901I7.pdf\">2012-0464901I7<\/a> (released last week), the Rulings Directorate concluded that the \u201csubstituted share\u201d concept, contained in proposed new s. 93(2.01) and existing s. 93(2), could apply to any sequence of property substitutions even if the property substituted within the&hellip;<\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"class_list":["post-759","post","type-post","status-publish","format-standard","hentry","category-corporate-tax"],"_links":{"self":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/759","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/comments?post=759"}],"version-history":[{"count":1,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/759\/revisions"}],"predecessor-version":[{"id":2761,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/posts\/759\/revisions\/2761"}],"wp:attachment":[{"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/media?parent=759"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/categories?post=759"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thor.ca\/blog\/wp-json\/wp\/v2\/tags?post=759"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}