Exceptions from Subsection 55(2) - CCH Canadian

Public Company Spin-off Rules• Public company spin-offs are not subject to the “types of property”requirements– “types of property” rules prevent “cashing out” transactions– not relevant in public company spin-off butterflies• Can distribute any mix of property• Only applies to spin-offs (and not split-ups)• Applies to wholly-owned subsidiaries of public companies• Distributing corporation can do another spin-off but not a split-upbutterfly within three years• Transferee cannot do any butterfly for three years© 2010 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is aSwiss entity with which the independent member firms of the KPMG network are affiliated 48