Income Tax Act

Definition of affiliated persons

• 251.1 (1) For the purposes of this Act, affiliated persons, or persons affiliated with each other, are

  • (a) an individual and a spouse or common-law partner of the individual;

  • (b) a corporation and

    • (i) a person by whom the corporation is controlled,

    • (ii) each member of an affiliated group of persons by which the corporation is controlled, and

    • (iii) a spouse or common-law partner of a person described in subparagraph (i) or (ii);

  • (c) two corporations, if

    • (i) each corporation is controlled by a person, and the person by whom one corporation is controlled is affiliated with the person by whom the other corporation is controlled,

    • (ii) one corporation is controlled by a person, the other corporation is controlled by a group of persons, and each member of that group is affiliated with that person, or

    • (iii) each corporation is controlled by a group of persons, and each member of each group is affiliated with at least one member of the other group;

  • (d) a corporation and a partnership, if the corporation is controlled by a particular group of persons each member of which is affiliated with at least one member of a majority-interest group of partners of the partnership, and each member of that majority-interest group is affiliated with at least one member of the particular group;

  • (e) a partnership and a majority interest partner of the partnership; and

  • (f) two partnerships, if

    • (i) the same person is a majority-interest partner of both partnerships,

    • (ii) a majority-interest partner of one partnership is affiliated with each member of a majority-interest group of partners of the other partnership, or

    • (iii) each member of a majority-interest group of partners of each partnership is affiliated with at least one member of a majority-interest group of partners of the other partnership.

• Marginal note:Affiliation where amalgamation or merger

  (2) Where at any time 2 or more corporations (in this subsection referred to as the “predecessors”) amalgamate or merge to form a new corporation, the new corporation and any predecessor are deemed to have been affiliated with each other where they would have been affiliated with each other immediately before that time if

  • (a) the new corporation had existed immediately before that time; and

  • (b) the persons who were the shareholders of the new corporation immediately after that time had been the shareholders of the new corporation immediately before that time.

• Marginal note:Definitions

  (3) The definitions in this subsection apply in this section.

  affiliated group of persons

  groupe de personnes affiliées

  affiliated group of persons means a group of persons each member of which is affiliated with every other member. (groupe de personnes affiliées)

  controlled

  contrôlé

  controlled means controlled, directly or indirectly in any manner whatever. (contrôlé)

  majority-interest group of partners

  groupe d’associés détenant une participation majoritaire

  majority-interest group of partners of a partnership means a group of persons each of whom has an interest in the partnership such that

  • (a) if one person held the interests of all members of the group, that person would be a majority interest partner of the partnership; and

  • (b) if any member of the group were not a member, the test described in paragraph (a) would not be met. (groupe d’associés détenant une participation majoritaire)

• Marginal note:Interpretation

  (4) For the purposes of this section,

  • (a) persons are affiliated with themselves; and

  • (b) a person includes a partnership.