Related payments rule

A more stringent rule, the related payments rule, will apply in relation to a distribution on shares where:

  • there is an obligation to pass on the value of the distribution to someone else, and
  • the shares, upon which the distribution is paid, are not held at risk during a defined period called the secondary qualification period.

Where the rule applies to a distribution paid on shares, the shareholder will need to hold the shares at risk for 45 days within the secondary qualification period (a more limited period) in order to be a qualified person.

Because of the way the secondary qualification period is defined, the rule will apply to each distribution on those shares where a related payment is made.

    Last modified: 09 Jul 2014QC 17505