Lesson  6 -  Part 3D - SUBSECTION 84(3)

Subsection 84(3) applies where a corporation has "redeemed, acquired or cancelled in any manner whatever" shares of any class (and the transaction is not covered by sub. 84(2)).

Where such a transaction occurs, the corporation is deemed to have paid a dividend equal to the amount paid on the redemption in excess of the PUC of the shares.

Again the shares are deemed disposed of, however, paragraph (j) of the definition of "proceeds of disposition" in section 54 excludes the amount of the dividend from the POD.