I-3 - Taxation Act

Section 462.12 Disposition versions

2006-03-01

462.12. Where an individual has transferred or loaned property, either directly or indirectly, by means of a trust or otherwise, to a corporation and one of the main purposes of the transfer or loan may reasonably be considered to be to reduce the income of the individual and to benefit, either directly or indirectly, by means of a trust or otherwise, a person who is a designated person in respect of the individual, the individual is deemed in computing his income for any taxation year to have received as interest in the year, an amount equal to the amount determined under section 462.13, where the taxation year includes a period after the loan or transfer throughout which

(a)  the individual was resident in Canada;

(b)  the corporation was not a small business corporation; and

(c)  the person is a designated person in respect of the individual and would have been a specified shareholder of the corporation, within the meaning of section 21.17 if the reference therein to “any other corporation that is related to the corporation” were read as a reference to “any other corporation, other than a small business corporation, that is related to the corporation” and if section 21.18 were read without reference to paragraphs a and d thereof.

1987, c. 67, s. 112; 1993, c. 16, s. 191; 1997, c. 3, s. 71.