I-3 - Taxation Act

Section 418.16 Disposition versions

2020-09-24

418.16. Subject to sections 418.22 and 418.23, where after 31 December 1971 a corporation acquired, in any manner whatsoever, a particular Canadian resource property referred to in this section as “particular property”, it may deduct in computing its income for a taxation year an amount not exceeding the aggregate of all amounts each of which is the lesser of the amount referred to in the second paragraph and the amount referred to in the third paragraph determined in respect of an original owner of the particular property.

The first amount to which the first paragraph refers is equal to the amount of the Canadian exploration and development expenses incurred by the original owner before he disposed of the particular property, to the extent that those expenses

(a)  were not otherwise deducted in computing the income of the corporation for the year or deducted in computing the income of the corporation for a preceding taxation year or in computing the income of a predecessor owner of the particular property for any taxation year; and

(b)  were not deductible under section 362 or deducted under section 367 or 368 in computing the income of the original owner for any taxation year.

The last amount to which the first paragraph refers is equal to the amount by which

(a)  the part of the corporation’s income for the year, determined before any deduction under section 88.4 of the Act respecting the application of the Taxation Act (chapter I-4) or any of sections 359 to 419.6, that may reasonably be regarded as attributable to

i.  the amount included in computing its income for the year under paragraph e of section 330 that may reasonably be regarded as attributable to the disposition by the corporation in the year or a preceding taxation year of any right in or to the particular property to the extent that the proceeds of the disposition have not been included in computing an amount for any preceding taxation year under this subparagraph, subparagraph i of subparagraph a of the third paragraph of section 418.18, subparagraph iii of subparagraph c of the first paragraph of section 418.20, section 418.28 or section 88.4 of the Act respecting the application of the Taxation Act, to the extent that that section refers to clause A of subparagraph i of paragraph d of subsection 25 of section 29 of the Income Tax Application Rules (R.S.C. 1985, c. 2 (5th Suppl.)),

ii.  its reserve amount for the year in respect of the original owner and each predecessor owner of the particular property, or

iii.  production from the particular property; exceeds

(b)  the aggregate of

i.  any other amount deducted for the year under section 88.4 of the Act respecting the application of the Taxation Act, to the extent that that section refers to subsection 25 of section 29 of the Income Tax Application Rules, this section and any of sections 418.18, 418.19 and 418.21, that can reasonably be regarded as attributable to the part of its income for the year described in subparagraph a in respect of the particular property, and

ii.  any other amount added, because of section 485.13, in computing the amount determined under subparagraph a.

1989, c. 77, s. 49; 1993, c. 16, s. 165; 1996, c. 39, s. 117; 1997, c. 3, s. 71; 1998, c. 16, s. 251; 2000, c. 5, s. 293; 2020, c. 16, s. 191.

2006-03-01

418.16. Subject to sections 418.22 and 418.23, where after 31 December 1971 a corporation acquired, in any manner whatsoever, a particular Canadian resource property referred to in this section as “particular property”, it may deduct in computing its income for a taxation year an amount not exceeding the aggregate of all amounts each of which is the lesser of the amount referred to in the second paragraph and the amount referred to in the third paragraph determined in respect of an original owner of the particular property.

The first amount to which the first paragraph refers is equal to the amount of the Canadian exploration and development expenses incurred by the original owner before he disposed of the particular property, to the extent that those expenses

(a)  were not otherwise deducted in computing the income of the corporation for the year or deducted in computing the income of the corporation for a preceding taxation year or in computing the income of a predecessor owner of the particular property for any taxation year; and

(b)  were not deductible under section 362 or deducted under section 367 or 368 in computing the income of the original owner for any taxation year.

The last amount to which the first paragraph refers is equal to the amount by which

(a)  the part of the corporation’s income for the year, determined before any deduction under section 88.4 of the Act respecting the application of the Taxation Act (chapter I-4) or any of sections 359 to 419.6, that may reasonably be regarded as attributable to

i.  the amount included in computing its income for the year under paragraph e of section 330 that may reasonably be regarded as attributable to the disposition by the corporation in the year or a preceding taxation year of any interest in or right to the particular property to the extent that the proceeds of the disposition have not been included in computing an amount for any preceding taxation year under this subparagraph, subparagraph i of subparagraph a of the third paragraph of section 418.18, subparagraph iii of subparagraph c of the first paragraph of section 418.20, section 418.28 or section 88.4 of the Act respecting the application of the Taxation Act, to the extent that that section refers to clause A of subparagraph i of paragraph d of subsection 25 of section 29 of the Income Tax Application Rules (Revised Statutes of Canada, 1985, chapter 2, 5th Supplement),

ii.  its reserve amount for the year in respect of the original owner and each predecessor owner of the particular property, or

iii.  production from the particular property; exceeds

(b)  the aggregate of

i.  any other amount deducted for the year under section 88.4 of the Act respecting the application of the Taxation Act, to the extent that that section refers to subsection 25 of section 29 of the Income Tax Application Rules, this section and any of sections 418.18, 418.19 and 418.21, that can reasonably be regarded as attributable to the part of its income for the year described in subparagraph a in respect of the particular property, and

ii.  any other amount added, because of section 485.13, in computing the amount determined under subparagraph a.

1989, c. 77, s. 49; 1993, c. 16, s. 165; 1996, c. 39, s. 117; 1997, c. 3, s. 71; 1998, c. 16, s. 251; 2000, c. 5, s. 293.