I-3 - Taxation Act

Section 135.6 Disposition versions

2006-03-01

135.6. For the purposes of sections 135.4 and 135.5, costs relating to the construction, renovation or alteration of a building or to the ownership of land include

(a)  interest paid or payable by a taxpayer in respect of borrowed money that cannot be identified with a particular building or particular land, but that can reasonably be considered, having regard to all the circumstances, as interest on borrowed money used by the taxpayer in respect of the construction, renovation or alteration of a building or the ownership of land; and

(b)  interest paid or payable by a taxpayer in respect of borrowed money that can reasonably be considered, having regard to all the circumstances, to have been used to assist, directly or indirectly, a person with whom the taxpayer does not deal at arm’s length, a corporation of which the taxpayer is a specified shareholder, or a partnership of which the taxpayer’s share of any income or loss is 10% or more, to construct, renovate or alter a building or to purchase land, except where the assistance is in the form of a loan to that person, corporation or partnership and a reasonable rate of interest thereon is charged by the taxpayer.

1984, c. 15, s. 32; 1986, c. 15, s. 49; 1990, c. 59, s. 79; 1997, c. 3, s. 71.