I-3 - Taxation Act

Section 1137.3 Disposition versions

2006-03-01

1137.3. Where, at a particular time, a corporation in a taxation year pays a particular amount, in relation to property, that may reasonably be considered to be the repayment of particular assistance that reduced, pursuant to paragraph b.3 or b.4 of section 1137, the amount that the corporation, or a corporation from which it acquired the property, was entitled to deduct, in respect of the property, in computing its paid-up capital under those paragraphs, the following rules apply:

(a)  the particular amount is deemed to have been incurred at that particular time by the corporation as costs, in the year in which it paid the particular amount, to acquire property described in the first paragraph of section 1137.5 which it owned at the end of the year;

(b)  the corporation may deduct the particular amount in computing its paid-up capital for a taxation year

i.  that is, where the particular assistance reduced an amount that could have been deducted, pursuant to paragraph b.3 or b.4 of section 1137, the taxation year in which the property was acquired by the corporation or, where paragraph b.4 applies, by the transferor referred to therein, the year in which it paid the particular amount or the year following that year, or

ii.  that is, where the assistance reduced an amount that could have been deducted, pursuant to paragraph b.3 or b.4 of section 1137, the taxation year following the year in which the property was acquired by the corporation or, where paragraph b.4 applies, by the transferor referred to therein, the year in which it pays the particular amount; and

(c)  the amount that the corporation deducts, for a particular taxation year, from its paid-up capital under subparagraph b is deemed to have been deducted by the corporation under paragraph b.3 of section 1137 in computing its paid-up capital for that particular year.

For the purposes of the first paragraph, an amount is deemed to be an amount paid, at a particular time, as repayment of assistance by a corporation, where

(a)  it reduced, because of paragraphs b.3 and b.4 of section 1137, the amount deductible by the corporation under either of those paragraphs in computing its paid-up capital for a taxation year;

(b)  it has not been received by the corporation; and

(c)  it ceased, at the particular time, to be an amount the corporation may reasonably expect to receive.

1997, c. 85, s. 312; 1999, c. 83, s. 261.