Section 86 Rollover Agreement

Summary

This is a precedent Section 86 Rollover Agreement, to be used when effecting a Section 86 rollover for a corporation. It contains practical guidance and drafting notes. Section 86 of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (the "Act") is a provision that is often used in the course of a corporate reorganization to exchange one property for another — typically, it is a tax-deferred share-for-share exchange transaction. This rollover agreement evidences the terms of the transaction between the shareholder and corporation with respect to the share exchange, while also ensuring that the transaction complies with the requirements for a Section 86 rollover. For more information, see the practice note: Section 86 Rollovers. See also the precedent Board Resolution (Section 86 Rollover) and the checklist: Section 86 Rollover Transaction Checklist. For information on business estate and succession planning, see the Business Estate and Succession Planning Resource Kit.