Regulation 5301 - Corporations Under Part I of the Act

A transferor corporation transferred its Part VI.1 tax liability for 2011 in the amount of $8,000, to a related transferee, which was assessed for that amount pursuant to s. 191.3(3) in respect of that transfer, and so that the Part VI.1 tax liability of the transferor for 2011 was nil. No such transfer was made for 2010 or 2009. CRA stated:

[O]nly the amount assessed under subsection 191.3(3) would form part of the instalment base of the transferee corporation. Since the corporation was not assessed under subsection 191.3(3) in 2010 and 2009 for Part VI.1 tax, no such tax would be included in its instalment base in those years.

Where in an attempt to circumvent Regulation 5301(8) a corporation transfers all or substantially all of its assets to more than one corporation with which it does not deal at arm's length, s. 245(2) may be applied.