I-3 - Taxation Act

Section 333.8 Disposition versions

2020-09-24

333.8. Section 421 does not apply to deem consideration to be an amount received or receivable by an individual for a restrictive covenant granted by the individual if

(a)  the restrictive covenant is granted by the individual to another taxpayer (in this section referred to as the “purchaser”) with whom the individual deals at arm’s length;

(b)  the restrictive covenant directly relates to the acquisition from one or more other persons (in this section and section 333.13 referred to as the “vendors”) by the purchaser of a right in the individual’s employer, in a corporation related to that employer or in a business carried on by that employer;

(c)  the individual deals at arm’s length with the employer and with the vendors;

(d)  the restrictive covenant is an undertaking by the individual not to provide, directly or indirectly, property or services in competition with property or services provided or to be provided by the purchaser or by a person related to the purchaser in the course of carrying on the business to which the restrictive covenant relates;

(e)  no proceeds are received or receivable by the individual for granting the restrictive covenant; and

(f)  the amount that can reasonably be regarded as being the consideration for the restrictive covenant is received or receivable only by the vendors.

2009, c. 5, s. 117; 2015, c. 21, s. 163; 2020, c. 16, s. 56.

2015-10-21

333.8. Section 421 does not apply to deem consideration to be an amount received or receivable by an individual for a restrictive covenant granted by the individual if

(a)  the restrictive covenant is granted by the individual to another taxpayer (in this section referred to as the “purchaser”) with whom the individual deals at arm’s length;

(b)  the restrictive covenant directly relates to the acquisition from one or more other persons (in this section and section 333.13 referred to as the “vendors”) by the purchaser of a right or an interest in the individual’s employer, in a corporation related to that employer or in a business carried on by that employer;

(c)  the individual deals at arm’s length with the employer and with the vendors;

(d)  the restrictive covenant is an undertaking by the individual not to provide, directly or indirectly, property or services in competition with property or services provided or to be provided by the purchaser or by a person related to the purchaser in the course of carrying on the business to which the restrictive covenant relates;

(e)  no proceeds are received or receivable by the individual for granting the restrictive covenant; and

(f)  the amount that can reasonably be regarded as being the consideration for the restrictive covenant is received or receivable only by the vendors.

2009, c. 5, s. 117; 2015, c. 21, s. 163.

2009-05-15

333.8. Section 421 does not apply to deem consideration to be an amount received or receivable by an individual for a restrictive covenant granted by the individual if

(a)  the restrictive covenant is granted by the individual to another taxpayer (in this section referred to as the “purchaser”) with whom the individual deals at arm’s length;

(b)  the restrictive covenant directly relates to the acquisition from one or more other persons (in this section and section 333.10 referred to as the “vendors”) by the purchaser of an interest in the individual’s employer, in a corporation related to that employer or in a business carried on by that employer;

(c)  the individual deals at arm’s length with the employer and with the vendors;

(d)  the restrictive covenant is an undertaking by the individual not to provide, directly or indirectly, property or services in competition with property or services provided or to be provided by the purchaser or by a person related to the purchaser in the course of carrying on the business to which the restrictive covenant relates;

(e)  no proceeds are received or receivable by the individual for granting the restrictive covenant; and

(f)  the amount that can reasonably be regarded as being the consideration for the restrictive covenant is received or receivable only by the vendors.

2009, c. 5, s. 117.