I-3 - Taxation Act

Section 333.11 Disposition versions

2015-10-21

333.11. Subparagraph c of the first paragraph of section 333.6 does not apply to an amount that would, but for sections 333.5 to 333.14, be included in computing a taxpayer’s income from a source that is an office or employment or a business or property under paragraph a of section 28.

2009, c. 5, s. 117; 2015, c. 21, s. 164.

2009-05-15

333.11. If section 333.9 or 333.10 does not apply to a taxpayer’s grant of a restrictive covenant solely because the condition in paragraph g of section 333.9 or in paragraph e of section 333.10 has not been satisfied, the following rules apply:

(a)  to the extent that the consideration that can reasonably be regarded as being in part the consideration for the restrictive covenant granted by the taxpayer is received or receivable by one or more non arm’s length individuals and taxpayers in which one or more non arm’s length individuals hold, directly or indirectly, an interest (in this section referred to as the “allocable portion”), section 421 applies only to that allocable portion;

(b)  a joint election may be filed in the prescribed form by the taxpayer and each of the non arm’s length individuals and other taxpayers referred to in paragraph a to deem the portion of the allocable portion that would otherwise be considered by section 421 to be received or receivable in a taxation year by the taxpayer for granting the restrictive covenant to be received or receivable in the taxation year by the taxpayer as a goodwill amount, if the condition in paragraph g of section 333.9 has not been satisfied, or as proceeds of disposition from the disposition of capital property, if the condition in paragraph e of section 333.10 has not been satisfied;

(c)  if paragraph b applies to deem consideration to be received or receivable in a taxation year by the taxpayer, except for the purposes of this section, that consideration is considered not to be received or receivable by each of the non arm’s length individuals and other taxpayers who make the joint election with the taxpayer;

(d)  if paragraph b applies to deem consideration to be received or receivable in a taxation year by the taxpayer and the consideration is actually received or receivable by another taxpayer referred to in that paragraph that is a corporation, partnership or trust, that consideration is deemed to have been received by the corporation, partnership or trust, as the case may be, as a mandatary of the taxpayer if it is transferred to the taxpayer within 180 days from the date of receipt; and

(e)  the expense incurred by the purchaser for the goodwill amount referred to in section 333.9 or the cost of the shares of the target corporation referred to in section 333.10 does not differ from the amount that those amounts would have been if section 333.9 or 333.10 had applied to all of the consideration paid or payable by the purchaser to the non arm’s length individuals and other taxpayers referred to in paragraph b for the goodwill amount or capital stock of the target corporation.

2009, c. 5, s. 117.