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.