I-3, r. 1 - Regulation respecting the Taxation Act

Section 125.0.1r1 Disposition versions

2012-09-01

125.0.1R1. In this chapter,

“excluded payment” with respect to a taxpayer for a taxation year means, subject to the second paragraph, an indexed payment under an indexed debt obligation where

(a)  the non-indexed debt obligation associated with the indexed debt obligation provides for the payment, at least annually, of interest at a single fixed rate; and

(b)  the indexed payment corresponds to one of the interest payments referred to in paragraph a;

“indexed payment” means, in relation to an indexed debt obligation, an amount payable under the obligation that is determined by reference to the purchasing power of money;

“inflation adjustment period” of an indexed debt obligation means, in relation to a taxpayer,

(a)  where the taxpayer acquires and disposes of the taxpayer’s interest in the obligation in the same regular adjustment period of the obligation, the period that begins when the taxpayer acquires the interest in the obligation and ends when the taxpayer disposes of the interest; and

(b)  in any other case, each of the following consecutive periods:

i.  the period that begins when the taxpayer acquires the taxpayer’s interest in the obligation and ends at the end of the regular adjustment period of the obligation in which the taxpayer acquires the interest in the obligation,

ii.  each succeeding regular adjustment period of the obligation throughout which the taxpayer holds the interest in the obligation, and

iii.  where the taxpayer does not dispose of the interest in the obligation at the end of a regular adjustment period of the obligation, the period that begins immediately after the last period referred to in subparagraph i or ii and that ends when the taxpayer disposes of the interest in the obligation;

“regular adjustment period” of an indexed debt obligation means

(a)  where the terms or conditions of the obligation provide that, while the obligation is outstanding, indexed payments are to be made at regular intervals not exceeding 12 months in length, each of the following periods:

i.  the period that begins when the obligation is issued and ends when the first indexed payment is required to be made, and

ii.  each succeeding period beginning when an indexed payment is required to be made and ending when the next indexed payment is required to be made;

(b)  where paragraph a does not apply and the obligation is outstanding for less than 12 months, the period that begins when the obligation is issued and ends when the obligation ceases to be outstanding; and

(c)  in any other case, each of the following periods:

i.  the 12-month period that begins when the obligation is issued,

ii.  each succeeding 12-month period throughout which the obligation is outstanding, and

iii.  where the obligation ceases to be outstanding at a time other than the end of a 12-month period referred to in subparagraph i or ii, the period that commences immediately after the last period referred to in those subparagraphs and that ends when the obligation ceases to be outstanding.

For the purposes of the definition of “excluded payment” in the first paragraph, an excluded payment does not include payments under an indexed debt obligation where, at any time in the taxation year, the taxpayer’s proportionate interest in a payment to be made under the obligation after that time differs from the taxpayer’s proportionate interest in any other payment to be made under the obligation after that time.

s. 125.0.1R1; O.C. 1454-99, s. 10; O.C. 134-2009, s. 1.