Section 139 — Income Tax Act: Conversion of insurance corporations into mutual corporations

Where an insurance corporation that is a Canadian corporation applies an amount in payment for shares of the corporation purchased or otherwise acquired by it under a mutualization proposal under Division III of Part VI of the Insurance Companies Act or under a law of the province under the laws of which the corporation is incorporated that provides for the conversion of the corporation into a mutual corporation by the purchase of its shares in accordance with that law, section 15 does not apply to require the inclusion, in computing the income of a shareholder of the corporation, of any part of that amount;

and no part of that amount shall be deemed, for the purpose of subsection 138(7), to have been paid to shareholders or, for the purpose of section 84, to have been received as a dividend.