esignment problem Fourteen 4 sociated Companies Alwing situ

esignment problem Fourteen - 4 sociated Companies) (Alwing situations are independent of each other. All of the corporati controlled private corporations and have only one class of shares. lanice and Sarah Holt are sisters. Janice owns 100 percent of the shares of JH Inc. and 28 ercent of Holt Ltd. remaining 40 percent of the shares held by her father. Sarah also owns 41 percent of the shares of Holt Ltd. The remaining shares of Holt Ltd. are held by an unrelated party. Her sister Sarah owns 60 percent of the shares of SH Inc., with the Mr. Martin and Mr. Osbourne are not related. Mr. Martin and Mr. Osbourne each own 50 percent of the shares of Kannon Inc. Mr. Martin owns 60 percent of the shares of Press Ltd. Mr. Osbourne owns the remaining 40 percent of Press Ltd.\'s shares. C. Mr. Jared, Mr. Kapok, and Mr. Lee are three unrelated individuals. . Mr. Jared owns 50 percent of the shares of Arbor Inc. and 25 percent of the shares of Broton Ltd. . Mr. Kapok owns 50 percent of the shares of Broton Ltd. . Mr. Lee owns 50 percent of the shares of Arbor Inc. and 25 percent of the shares of Broton Ltd. D. Ms. Phig owns 24 percent of Heron Inc., a company that owns 60 percent of also owns 65 percent of the shares of Nortex Inc. Nortex Inc. owns 30 percent of Land Ltd. E. Mr. Brady owns 55 percent of Solex Inc. Solex Inc. owns 40 percent of Bolex Ltd. Mr. Brady also owns 14 percent of HC Ltd., which in turn owns 54 percent of the shares of Bolex Ltd. Mr. Brady\'s 15 year old son owns 6 percent of the shares of Bolex Ltd.

Solution

Situtation A.

(i) JH Inc. and Holt Ltd. are associated concerns vide ITA 256(1)(b). Janice has controlling interest in both JH Inc. and Holt Ltd.

(ii) JH Inc. and SH Inc. are not associated concerns. Janice do not have any controlling interest in SH Inc.

(iii) SH Inc. and Holt Ltd. are associated concerns vide ITA 256(1)(c). Janice has controlling interest in Holt Ltd. and Sarah has controlling interest in SH Inc. 41% of stake in Holt Ltd is held by Sarah who is related to Janice.

Situtation B.

Kannon Inc. and Press Ltd. are associated concerns vide ITA 256(1)(b). Osbourne has controlling interest in both Kannon Inc. and Press Ltd.

Situtation C.

Arbor Inc. and Broton Ltd. are associated concerns vide ITA 256(1)(b). Mr. Jared and Mr .Lee not both independently have controlling interest in both Arbor Inc. and Broton Ltd.

Situtation D.

(i) Heron Inc. and Land Ltd. are associated concerns vide ITA 256(1)(a). Heron Inc. has controlling interest in Land Ltd.

(ii) Nortex Ltd. and Land Ltd. are associated concerns vide ITA 256(1)(a). Nortex Ltd. has controlling interest in Land Ltd.

(iii) Heron Inc. and Nortex Ltd. are not associated concerns. Ms. Phig holds 65% stake in Nortex Ltd. but do not have any controlling interest in Heron Inc.

Situtation E.

(i) Solex Inc. and Bolex Ltd. are associated concerns vide ITA 256(1)(a). Solex Inc. has controlling interest in Bolex Ltd.

(ii) HC Ltd. and Bolex Ltd. are associated concerns vide ITA 256(1)(a). HC Ltd. has controlling interest in Bolex Ltd.

(iii) Solex Inc. and Bolex Ltd. are not associated concerns. Mr. Brady holds 55% stake in Solex Inc. but do not have any controlling interest in HC Ltd. Further it would not be covered by ITA 256(1)(c) as son of Mr. Brady do not have any controlling stake in Solex Inc. and HC Ltd.