Suppose shareholders of Opco hold different classes of common shares on which dividends can be paid at the discretion of the board so that one class can receives dividends to the exclusion of other classes. All common shares participate pro rata in the net assets of the corporation on a winding-up. The CRA believes that a 55(3)(b) butterfly of Opco could be problematic because it is difficult to determine the fair market value of Opco’s common shares. The CRA is studying discretionary dividend shares and will not provide additional views until the study is completed. 2016 CTF Roundtable Q2.
