ARCHIVED - Dispositions - Changes in Terms of Securities

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NO: IT-448SR

DATE: June 21, 1982

SUBJECT: INCOME TAX ACT
Dispositions - Changes in Terms of Securities

REFERENCE: SPECIAL RELEASE

The purpose of this Special Release is to modify the Department's position as to whether a disposition occurs on the reduction in the paid-up capital of a share of the capital stock of a corporation. Accordingly, paragraphs 12 and 13 of IT-448 are to be replaced with the following:

"A reduction in paid-up capital that involves the redemption (see 2 above), or cancellation of a share gives rise, by necessity, to a disposition in the hands of the holder by virtue of clause 54(c)(ii)(A) of the Act. However, a reduction in the paid-up capital in respect of a share, not accompanied by a redemption or cancellation of that share, will not constitute a disposition of that share".

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