I-3 - Taxation Act

Section 726.6.3 Disposition versions

2019-06-19

726.6.3. For the purposes of subparagraph a.0.2 of the first paragraph of section 726.6, at any time, a property owned at that time by an individual, the individual’s spouse or a partnership, an interest in which is an interest in a family farm or fishing partnership of the individual or of the individual’s spouse will not be considered to have been used in the course of carrying on a farming or fishing business in Canada, unless

(a)  the property or a property for which the property was substituted meets the following conditions:

i.  throughout the period of at least 24 months preceding that time, the property was owned by any one or more of

(1)  the individual or the spouse, a child or the father or mother of the individual,

(2)  a partnership, an interest in which is an interest in a family farm or fishing partnership of the individual or of the individual’s spouse,

(3)  if the individual is a personal trust, the individual from whom the trust acquired the property or the spouse, a child or the father or mother of the individual, or

(4)  a personal trust from which the individual or a child or the father or mother of the individual acquired the property, and

ii.  either

(1)  in at least two years while the property was owned by one or more persons or partnerships referred to in subparagraph i, the property was used principally in a farming or fishing business carried on in Canada in which an individual referred to in subparagraph i, or where the individual is a personal trust, a beneficiary under the trust, was actively engaged on a regular and continuous basis, and the gross revenue of a person referred to in subparagraph i (in this subparagraph 1 referred to as the “operator”) from such a business for the period during which the property was owned by a person or partnership referred to in subparagraph i exceeded the income of the operator from all other sources for that period, or

(2)  throughout a period of at least 24 months while the property was owned by one or more persons or partnerships referred to in subparagraph i, the property was used by a corporation described in subparagraph 4 of subparagraph i of subparagraph a.0.2 of the first paragraph of section 726.6 or by a partnership described in subparagraph 5 of that subparagraph i in a farming or fishing business in which an individual referred to in any of subparagraphs 1 to 3 of that subparagraph i was actively engaged on a regular and continuous basis; and

(b)  (subparagraph repealed);

(c)  if the property or a property for which the property was substituted was last acquired by the individual or a partnership before 18 June 1987 or after 17 June 1987 under an agreement in writing entered into before that date,

i.  in the year the property was disposed of by the individual, the property was used principally in the course of carrying on a farming business in Canada by

(1)  the individual or the spouse, a child or the father or mother of the individual,

(2)  a beneficiary described in subparagraph 2 of subparagraph i of subparagraph a.0.2 of the first paragraph of section 726.6, or the spouse, a child or the father or mother of that beneficiary,

(3)  a corporation described in subparagraph 4 of subparagraph i of subparagraph a.0.2 of the first paragraph of section 726.6,

(4)  a partnership described in subparagraph 5 of subparagraph i of subparagraph a.0.2 of the first paragraph of section 726.6, or

(5)  a personal trust from which the individual acquired the property, or

ii.  in at least five years during which the property was owned by any of the persons or partnerships described in subparagraph i, the property was used principally in the course of carrying on a farming business in Canada by any of those persons or partnerships.

Where, at any time, a qualified farm or fishing property is encumbered with a real servitude, the property that results from the establishment of that servitude is considered, at that time, to have been used in the course of carrying on a farming or fishing business in Canada only if the qualified farm or fishing property so encumbered satisfies the conditions set out in subparagraphs a and c of the first paragraph.

2007, c. 12, s. 75; 2015, c. 21, s. 255; 2017, c. 29, s. 99; 2019, c. 14, s. 190.

2017-12-07

726.6.3. For the purposes of subparagraph a.0.2 of the first paragraph of section 726.6, at any time, a property owned at that time by an individual, the individual’s spouse or a partnership, an interest in which is an interest in a family farm or fishing partnership of the individual or of the individual’s spouse will not be considered to have been used in the course of carrying on a farming or fishing business in Canada, unless

(a)  the property or a property for which the property was substituted meets the following conditions:

i.  throughout the period of at least 24 months preceding that time, the property was owned by any one or more of

(1)  the individual or the spouse, a child or the father or mother of the individual,

(2)  a partnership, an interest in which is an interest in a family farm or fishing partnership of the individual or of the individual’s spouse,

(3)  if the individual is a personal trust, the individual from whom the trust acquired the property or the spouse, a child or the father or mother of the individual, or

(4)  a personal trust from which the individual or a child or the father or mother of the individual acquired the property, and

ii.  either

(1)  in at least two years while the property was owned by one or more persons or partnerships referred to in subparagraph i, the property was used principally in a farming or fishing business carried on in Canada in which an individual referred to in subparagraph i, or where the individual is a personal trust, a beneficiary under the trust, was actively engaged on a regular and continuous basis, and the gross revenue of a person referred to in subparagraph i (in this subparagraph 1 referred to as the “operator”) from such a business for the period during which the property was owned by a person or partnership referred to in subparagraph i exceeded the income of the operator from all other sources for that period, or

(2)  throughout a period of at least 24 months while the property was owned by one or more persons or partnerships referred to in subparagraph i, the property was used by a corporation described in subparagraph 4 of subparagraph i of subparagraph a.0.2 of the first paragraph of section 726.6 or by a partnership described in subparagraph 5 of that subparagraph i in a farming or fishing business in which an individual referred to in any of subparagraphs 1 to 3 of that subparagraph i was actively engaged on a regular and continuous basis; and

(b)  (subparagraph repealed);

(c)  if the property or a property for which the property was substituted was last acquired by the individual or a partnership before 18 June 1987 or after 17 June 1987 under an agreement in writing entered into before that date,

i.  in the year the property was disposed of by the individual, the property was used principally in the course of carrying on a farming business in Canada by

(1)  the individual or the spouse, a child or the father or mother of the individual,

(2)  a beneficiary described in subparagraph 2 of subparagraph i of subparagraph a.0.2 of the first paragraph of section 726.6, or the spouse, a child or the father or mother of that beneficiary,

(3)  a corporation described in subparagraph 4 of subparagraph i of subparagraph a.0.2 of the first paragraph of section 726.6,

(4)  a partnership described in subparagraph 5 of subparagraph i of subparagraph a.0.2 of the first paragraph of section 726.6, or

(5)  a personal trust from which the individual acquired the property, or

ii.  in at least five years during which the property was owned by any of the persons or partnerships described in subparagraph i, the property was used principally in the course of carrying on a farming business in Canada by any of those persons or partnerships.

If, at any time, a qualified farm or fishing property is encumbered with a real servitude, the incorporeal capital property that results from the establishment of that servitude is considered, at that time, to have been used in the course of carrying on a farming or fishing business in Canada only if the qualified farm or fishing property so encumbered satisfies the conditions set out in subparagraphs a and c of the first paragraph.

2007, c. 12, s. 75; 2015, c. 21, s. 255; 2017, c. 29, s. 99.

2015-10-21

726.6.3. For the purposes of subparagraph a of the first paragraph of section 726.6, at any time, a property owned at that time by an individual, the individual’s spouse or a partnership, an interest in which is an interest in a family farm partnership of the individual or of the individual’s spouse will not be considered to have been used in the course of carrying on a farming business in Canada, unless

(a)  the property or a property for which the property was substituted meets the following conditions:

i.  throughout the period of at least 24 months preceding that time, the property was owned by any one or more of

(1)  the individual or the spouse, a child or the father or mother of the individual,

(2)  a partnership, an interest in which is an interest in a family farm partnership of the individual or of the individual’s spouse,

(3)  if the individual is a personal trust, the individual from whom the trust acquired the property or the spouse, a child or the father or mother of the individual, or

(4)  a personal trust from which the individual or a child or the father or mother of the individual acquired the property, and

ii.  either

(1)  in at least two years while the property was owned by one or more persons referred to in subparagraph i, the property was used principally in a farming business carried on in Canada in which an individual referred to in subparagraph i, or if the individual is a personal trust, a beneficiary under the trust, was actively engaged on a regular and continuous basis, and the gross revenue of a person referred to in subparagraph i (in this subparagraph 1 referred to as the “operator”) from such a business for the period during which the property was owned by a person referred to in subparagraph i exceeded the income of the operator from all other sources for that period, or

(2)  throughout a period of at least 24 months while the property was owned by one or more persons or partnerships referred to in subparagraph i, the property was used by a corporation described in subparagraph 4 of subparagraph i of subparagraph a of the first paragraph of section 726.6 or by a partnership described in subparagraph 5 of that subparagraph i in a farming business in which an individual described in any of subparagraphs 1 to 3 of that subparagraph i was actively engaged on a regular and continuous basis; and

(b)  (subparagraph repealed);

(c)  if the property or a property for which the property was substituted was last acquired by the individual or a partnership before 18 June 1987 or after 17 June 1987 under an agreement in writing entered into before that date,

i.  in the year the property was disposed of by the individual, the property was used principally in the course of carrying on a farming business in Canada by

(1)  the individual or the spouse, a child or the father or mother of the individual,

(2)  a beneficiary described in subparagraph 2 of subparagraph i of subparagraph a of the first paragraph of section 726.6, or the spouse, a child or the father or mother of that beneficiary,

(3)  a corporation described in subparagraph 4 of subparagraph i of subparagraph a of the first paragraph of section 726.6,

(4)  a partnership described in subparagraph 5 of subparagraph i of subparagraph a of the first paragraph of section 726.6, or

(5)  a personal trust from which the individual acquired the property, or

ii.  in at least five years during which the property was owned by any of the persons or partnerships described in subparagraph i, the property was used principally in the course of carrying on a farming business in Canada by any of those persons or partnerships.

If, at any time, a qualified farm property is encumbered with a real servitude, the incorporeal capital property that results from the establishment of that servitude is considered, at that time, to have been used in the course of carrying on a farming business in Canada only if the qualified farm property so encumbered satisfies the conditions set out in subparagraphs a to c of the first paragraph.

2007, c. 12, s. 75; 2015, c. 21, s. 255.

2007-11-07

726.6.3. For the purposes of subparagraph a of the first paragraph of section 726.6, at any time, a property owned at that time by an individual, the individual’s spouse or a partnership, an interest in which is an interest in a family farm partnership of the individual or of the individual’s spouse will not be considered to have been used in the course of carrying on a farming business in Canada, unless

(a)  throughout the period of at least 24 months preceding that time, the property or a property for which the property was substituted was owned by any one or more of

i.  the individual or the spouse, a child or the father or mother of the individual,

ii.  a partnership, an interest in which is an interest in a family farm partnership of the individual or of the individual’s spouse,

iii.  if the individual is a personal trust, the individual from whom the trust acquired the property or the spouse, a child or the father or mother of the individual, or

iv.  a personal trust from which the individual or a child or the father or mother of the individual acquired the property;

(b)  if subparagraph c does not apply, either

i.  in at least two years while the property was owned by one or more persons referred to in subparagraph a, the property was used principally in a farming business carried on in Canada in which an individual referred to in subparagraph a, or if the individual is a personal trust, a beneficiary under the trust, was actively engaged on a regular and continuous basis, and the gross revenue of a person referred to in subparagraph a, in this subparagraph i referred to as the “operator”, from such a business for the period during which the property was owned by a person referred to in subparagraph a exceeded the income of the operator from all other sources for that period, or

ii.  throughout a period of at least 24 months while the property was owned by one or more persons or partnerships referred to in subparagraph a, the property was used by a corporation described in subparagraph 4 of subparagraph i of subparagraph a of the first paragraph of section 726.6 or by a partnership described in subparagraph 5 of that subparagraph i in a farming business in which an individual described in any of subparagraphs 1 to 3 of that subparagraph i was actively engaged on a regular and continuous basis; and

(c)  if the property or a property for which the property was substituted was last acquired by the individual or a partnership before 18 June 1987 or after 17 June 1987 under an agreement in writing entered into before that date,

i.  in the year the property was disposed of by the individual, the property was used principally in the course of carrying on a farming business in Canada by

(1)  the individual or the spouse, a child or the father or mother of the individual,

(2)  a beneficiary described in subparagraph 2 of subparagraph i of subparagraph a of the first paragraph of section 726.6, or the spouse, a child or the father or mother of that beneficiary,

(3)  a corporation described in subparagraph 4 of subparagraph i of subparagraph a of the first paragraph of section 726.6,

(4)  a partnership described in subparagraph 5 of subparagraph i of subparagraph a of the first paragraph of section 726.6, or

(5)  a personal trust from which the individual acquired the property, or

ii.  in at least five years during which the property was owned by any of the persons or partnerships described in subparagraph i, the property was used principally in the course of carrying on a farming business in Canada by any of those persons or partnerships.

If, at any time, a qualified farm property is encumbered with a real servitude, the incorporeal capital property that results from the establishment of that servitude is considered, at that time, to have been used in the course of carrying on a farming business in Canada only if the qualified farm property so encumbered satisfies the conditions set out in subparagraphs a to c of the first paragraph.

2007, c. 12, s. 75.