I-3 - Taxation Act

Section 107 Disposition versions

2019-06-19

107. (Repealed).

1972, c. 23, s. 96; 1978, c. 26, s. 23; 1990, c. 59, s. 61; 1993, c. 16, s. 66; 1996, c. 39, s. 36; 2003, c. 2, s. 42; 2005, c. 1, s. 47; 2007, c. 12, s. 39; 2019, c. 14, s. 78.

2007-11-07

107. The eligible incorporeal capital amount of a taxpayer at a particular time in respect of a business of the taxpayer is the amount by which the amount determined under the second paragraph is exceeded by the aggregate of

(a)  the amount by which 3/4 of the aggregate of all amounts each of which is an incorporeal capital amount in respect of the business that is payable or disbursed by the taxpayer before the particular time but after the taxpayer’s adjustment time, exceeds the aggregate of all amounts each of which is an amount determined by the formula

1/2 × (A − B) × (C / D);

(b)  the aggregate of the following amounts:

i.  3/2 of the aggregate of all amounts each of which is an amount included under paragraph b of section 105 in computing the taxpayer’s income from the business for a taxation year ending before the particular time but after 17 October 2000,

ii.  9/8 of the aggregate of all amounts each of which is an amount included under paragraph b of section 105 in computing the taxpayer’s income from the business for a taxation year ending before the particular time and after 27 February 2000 but before 18 October 2000,

iii.  the aggregate of all amounts each of which is an amount included under paragraph b of section 105 in computing the taxpayer’s income from the business for a taxation year ending before the earlier of the particular time and 28 February 2000 but after the taxpayer’s adjustment time,

iv.  the aggregate of all amounts each of which is an amount that would have been included in computing the taxpayer’s income from the business for a taxation year ending before the earlier of the particular time and 28 February 2000 but after 22 February 1994 under subparagraph ii of paragraph a of section 105, as that subparagraph read for that taxation year, if the amount determined under subparagraph d of the second paragraph of section 105.2 for the year had been nil, and

v.  the aggregate of all amounts each of which is a taxable capital gain included in computing the taxpayer’s income for a taxation year that began before 23 February 1994, by reason of the application of subparagraph ii of paragraph a of section 105, as that subparagraph read for that taxation year, to the taxpayer in respect of the business;

(c)  3/2 of the taxpayer’s eligible incorporeal capital amount in respect of the business at the taxpayer’s adjustment time;

(d)  the amount by which the aggregate of all amounts each of which is an amount deducted under paragraph b of section 130 in computing the taxpayer’s income from the business for a taxation year ending before the taxpayer’s adjustment time exceeds the aggregate of all amounts each of which is an amount included under section 105 in computing that income for such a taxation year; and

(e)  where the aggregate determined under subparagraph b exceeds zero, 1/2 of the amount determined under subparagraph ii of subparagraph a of the second paragraph in respect of the business.

The amount to which the first paragraph refers is equal to the aggregate of

(a)  the amount by which the amount determined under the fourth paragraph is exceeded by the aggregate of

i.  the aggregate of all amounts each of which is an amount deducted under paragraph b of section 130 in computing the taxpayer’s income from the business for a taxation year ending before the particular time, but after the taxpayer’s adjustment time,

ii.  the amount by which the aggregate of all amounts each of which is an amount deducted under paragraph b of section 130 in computing the taxpayer’s income for a taxation year ending before the taxpayer’s adjustment time exceeds the aggregate of all amounts each of which is an amount included under section 105 in computing that income for such a taxation year, and

iii.  the aggregate of all amounts each of which is an amount by which the eligible incorporeal capital amount of the taxpayer in respect of the business is required to be reduced at or before the particular time under section 485.7; and

(b)  the aggregate of all amounts each of which is equal to 3/4 of the amount by which a particular amount, other than an amount described in the fifth paragraph, that the taxpayer is or may become entitled to receive before the particular time but after the taxpayer’s adjustment time, on account of capital relating to the business carried on or formerly carried on by the taxpayer, exceeds all the expenses made or incurred by the taxpayer for the purpose of obtaining the particular amount, to the extent that they are not otherwise deductible in computing the taxpayer’s income.

In the formula in subparagraph a of the first paragraph,

(a)  A is the amount required, because of subparagraph b of section 105 or section 231, to be included in computing the income of a person or partnership, in this paragraph referred to as the “transferor”, not dealing at arm’s length with the taxpayer in respect of the disposition after 20 December 2002 of a property that is an incorporeal capital property acquired by the taxpayer directly or indirectly, in any manner whatever, from the transferor and not disposed of by the taxpayer before the particular time referred to in subparagraph a of the first paragraph;

(b)  B is the aggregate of all amounts each of which is an amount that can reasonably be considered to have been claimed as a deduction under Title VI.5 of Book IV by the transferor in respect of the disposition of the property;

(c)  C is the transferor’s proceeds from the disposition of the property; and

(d)  D is the aggregate of all amounts each of which is equal to the proceeds from the disposition of an incorporeal capital property that occurs in the taxation year of the transferor in which the property described in subparagraph a was disposed of.

The amount to which subparagraph a of the second paragraph refers is equal to the aggregate of all amounts each of which is an amount included in computing the taxpayer’s income from the business for a taxation year ending before the particular time but after the taxpayer’s adjustment time,

(a)  in the case of a taxation year that ends after 27 February 2000, under paragraph a of section 105, or

(b)  in the case of a taxation year that ends before 28 February 2000,

i.  under subparagraph i of paragraph a of section 105, as it read for that year, or

ii.  under paragraph b of section 105, as it read for that year, to the extent that the amount so included relates to an amount included in the aggregate determined under subparagraph i of subparagraph a of the second paragraph.

The amount to which subparagraph b of the second paragraph refers is

(a)  an amount that is included in computing the taxpayer’s income, or deducted in computing, for the purposes of this Part, any balance of undeducted outlays, expenses or other amounts for the year or a preceding taxation year;

(b)  an amount that reduces the cost or capital cost of a property or the amount of an outlay or expense; or

(c)  an amount that is included in computing any gain or loss of the taxpayer from the disposition of a capital property.

1972, c. 23, s. 96; 1978, c. 26, s. 23; 1990, c. 59, s. 61; 1993, c. 16, s. 66; 1996, c. 39, s. 36; 2003, c. 2, s. 42; 2005, c. 1, s. 47; 2007, c. 12, s. 39.

2006-03-01

107. The eligible incorporeal capital amount of a taxpayer at a particular time in respect of a business of the taxpayer is the amount by which the amount determined under the second paragraph is exceeded by the aggregate of

(a)  3/4 of the aggregate of all amounts each of which is an incorporeal capital amount in respect of the business that is payable or disbursed by the taxpayer before the particular time but after the taxpayer’s adjustment time;

(b)  the aggregate of the following amounts:

i.  3/2 of the aggregate of all amounts each of which is an amount included under paragraph b of section 105 in computing the taxpayer’s income from the business for a taxation year ending before the particular time but after 17 October 2000,

ii.  9/8 of the aggregate of all amounts each of which is an amount included under paragraph b of section 105 in computing the taxpayer’s income from the business for a taxation year ending before the particular time and after 27 February 2000 but before 18 October 2000,

iii.  the aggregate of all amounts each of which is an amount included under paragraph b of section 105 in computing the taxpayer’s income from the business for a taxation year ending before the earlier of the particular time and 28 February 2000 but after the taxpayer’s adjustment time,

iv.  the aggregate of all amounts each of which is an amount that would have been included in computing the taxpayer’s income from the business for a taxation year ending before the earlier of the particular time and 28 February 2000 but after 22 February 1994 under subparagraph ii of paragraph a of section 105, as that subparagraph read for that taxation year, if the amount determined under subparagraph d of the second paragraph of section 105.2 for the year had been nil, and

v.  the aggregate of all amounts each of which is a taxable capital gain included in computing the taxpayer’s income for a taxation year that began before 23 February 1994, by reason of the application of subparagraph ii of paragraph a of section 105, as that subparagraph read for that taxation year, to the taxpayer in respect of the business;

(c)  3/2 of the taxpayer’s eligible incorporeal capital amount in respect of the business at the taxpayer’s adjustment time;

(d)  the amount by which the aggregate of all amounts each of which is an amount deducted under paragraph b of section 130 in computing the taxpayer’s income from the business for a taxation year ending before the taxpayer’s adjustment time exceeds the aggregate of all amounts each of which is an amount included under section 105 in computing that income for such a taxation year; and

(e)  where the aggregate determined under subparagraph b exceeds zero, 1/2 of the amount determined under subparagraph ii of subparagraph a of the second paragraph in respect of the business.

The amount to which the first paragraph refers is equal to the aggregate of

(a)  the amount by which the aggregate of all amounts each of which is an amount included in computing the taxpayer’s income from the business for a taxation year ending before the particular time but after the taxpayer’s adjustment time under subparagraph i of paragraph a of section 105, where the taxation year ends before 28 February 2000, or under paragraph a of that section, where the taxation year ends after 27 February 2000, is exceeded by the aggregate of

i.  the aggregate of all amounts each of which is an amount deducted under paragraph b of section 130 in computing the taxpayer’s income from the business for a taxation year ending before the particular time, but after the taxpayer’s adjustment time,

ii.  the amount by which the aggregate of all amounts each of which is an amount deducted under paragraph b of section 130 in computing the taxpayer’s income for a taxation year ending before the taxpayer’s adjustment time exceeds the aggregate of all amounts each of which is an amount included under section 105 in computing that income for such a taxation year, and

iii.  the aggregate of all amounts each of which is an amount by which the eligible incorporeal capital amount of the taxpayer in respect of the business is required to be reduced at or before the particular time under section 485.7; and

(b)  the aggregate of all amounts each of which is equal to 3/4 of the amount by which an amount that, as a result of a disposition occurring before the particular time but after the taxpayer’s adjustment time, the taxpayer is or may become entitled to receive, in respect of a business carried on or formerly carried on by the taxpayer where the consideration given by the taxpayer therefor is such that, if any payment had been made by the taxpayer after 31 December 1971 for that consideration, the payment would have been an incorporeal capital amount of the taxpayer in respect of the business, exceeds all expenses made or incurred by the taxpayer for the purpose of giving that consideration, to the extent that they are not otherwise deductible in computing the taxpayer’s income.

1972, c. 23, s. 96; 1978, c. 26, s. 23; 1990, c. 59, s. 61; 1993, c. 16, s. 66; 1996, c. 39, s. 36; 2003, c. 2, s. 42; 2005, c. 1, s. 47.