I-3 - Taxation Act

Section 418.29.1 Disposition versions

2015-10-26

418.29.1. If there has been an amalgamation within the meaning of section 544, other than an amalgamation to which subsection 4 of that section applies, of two or more corporations (each of which is referred to in this section as a “predecessor corporation”) to form a new corporation and immediately before the time of the amalgamation a predecessor corporation was a member of a partnership that owned a Canadian resource property or a foreign resource property at that time, for the purposes of subparagraph c of the first paragraph of section 418.15 and sections 418.16 to 418.21, the following rules apply:

(a)  the predecessor corporation is deemed to have owned, immediately before the time of the amalgamation, that portion of each Canadian resource property and of each foreign resource property owned by the partnership at the time of the amalgamation that is equal to the predecessor corporation’s percentage share of the aggregate of the amounts that would be paid to all members of the partnership if the partnership were wound up and to have disposed of those portions to the new corporation at the time of the amalgamation;

(b)  the new corporation is deemed to have, as a consequence of the amalgamation, acquired the portions of property referred to in paragraph a at the time of the amalgamation; and

(c)  the income of the new corporation for a taxation year that ends after the time of the amalgamation that can reasonably be attributable to production from the properties referred to in paragraph a is deemed to be equal to the lesser of

i.  the new corporation’s share of the part of the income of the partnership for fiscal periods of the partnership that end in the year that can reasonably be regarded as being attributable to production from those properties, and

ii.  the amount that would be determined in accordance with subparagraph i for the year if the new corporation’s share of the income of the partnership for each of the fiscal periods of the partnership that end in the year were determined on the basis of the percentage share referred to in paragraph a.

2015, c. 24, s. 73.