I-3 - Taxation Act

Section 726.20.1 Disposition versions

2017-12-07

726.20.1. In this Title,

“eligible taxable capital gain amount” of an individual for a taxation year from the disposition of a resource property, referred to in this definition as the “particular property”, means the least of

(a)  subject to the third paragraph, the amount by which the amount determined under the second paragraph is exceeded by 1/2 of

i.  where the particular property was owned by the individual immediately before the disposition and was a property referred to in paragraph a or b of the definition of “resource property” in respect of the individual, the amount by which the cost to the individual of the particular property, determined without reference, where applicable, to section 419.0.1, exceeds the adjusted cost base to the individual of the particular property immediately before the disposition,

ii.  where the particular property was owned by the individual immediately before the disposition and was a property referred to in paragraph c of the definition of “resource property” in respect of the individual that was substituted for another property that was a flow-through share or an interest in a partnership, the amount by which the cost to the individual of the other property, determined without reference, where applicable, to section 419.0.1, exceeds the aggregate of the adjusted cost base to the individual of the other property immediately before the substitution and the capital gain, if any, of the individual from the disposition, at the time of such a substitution, of the other property or of a property substituted for the other property,

iii.  where immediately before the disposition the particular property was owned by a particular partnership of which the individual is a member, whether directly or indirectly through another partnership, the amount that may reasonably be considered to be the individual’s share of the amount by which the cost to the partnership of the particular property, determined without reference, where applicable, to section 419.0.1, exceeds the adjusted cost base to the partnership of the particular property immediately before the disposition, and

iv.  where the particular property was owned by a particular partnership of which the individual is a member, whether directly or indirectly through another partnership, immediately before the disposition and was a property referred to in paragraph d of the definition of “resource property” in respect of the individual that was substituted for another property that was a flow-through share or an interest in a partnership, the amount that may reasonably be considered to be the individual’s share of the amount by which the cost to the partnership of the other property, determined without reference, where applicable, to section 419.0.1, exceeds the aggregate of the adjusted cost base to the partnership of the other property immediately before the substitution and the capital gain, if any, of the partnership from the disposition, at the time of such a substitution, of the other property or of a property substituted for the other property;

(b)  where paragraph a or d of section 231.2 applies in respect of the disposition of the particular property, the amount that would correspond to the individual’s taxable capital gain for the year from the disposition if that section were read without reference to that paragraph and, in any other case, the individual’s taxable capital gain for the year from the disposition of the particular property; and

(c)  subject to the fourth paragraph, nil, where the particular property is property described in section 726.7 or 726.7.1 and the amount by which the amount determined in respect of the individual for the year by the formula provided for in subparagraph a of the first paragraph of section 726.7 exceeds the amount, if any, deducted under Title VI.5 by the individual in computing the individual’s taxable income for the year is not nil;

“resource property” of an individual or partnership means capital property owned by the individual or the partnership, as the case may be, that is

(a)  a flow-through share issued to the individual or partnership pursuant to an agreement in writing entered into after 14 May 1992, as part of a public share issue, where the flow-through share was issued as part of such an issue, in respect of which the receipt for the final prospectus or the exemption from filing a prospectus was granted after that date, except for a flow-through share that

i.  was issued following an investment made after 12 June 2003, or following an application for a receipt for the preliminary prospectus or an application for an exemption from filing a prospectus made after 12 June 2003, and

ii.  was acquired by the individual or partnership before 31 March 2004;

(b)  an interest in a particular partnership acquired by the individual or partnership after 14 May 1992 as part of a public issue of interests in a partnership, where the interest in the particular partnership was acquired as part of such an issue, in respect of which the receipt for the final prospectus or the exemption from filing a prospectus was granted after that date, provided that

i.  any of the following conditions is met:

(1)  a flow-through share referred to in paragraph a is issued to the particular partnership, or

(2)  the particular partnership incurs Canadian exploration expenses or Canadian development expenses after 14 May 1992 otherwise than by reason of the acquisition of a flow-through share, and

ii.  where the condition set out in subparagraph 2 of subparagraph i is met, the interest in the particular partnership was not acquired by the individual or partnership before 31 March 2004 following an investment made after 12 June 2003, or following an application for a receipt for the preliminary prospectus or an application for an exemption from filing a prospectus made after 12 June 2003; and

(c)  a property, in this paragraph referred to as the “new property”, substituted for another property that was a resource property of the individual under paragraph a or b, where

i.  the new property was then acquired by the individual through a transaction in respect of which an election referred to in section 518, 614 or 620 was made or in respect of which sections 530 to 533, 536 to 539, 541 to 543.2 or 626 to 632 apply, on the winding-up of a Canadian corporation in respect of which sections 556 to 564.1 and 565 apply, or by reason of an amalgamation within the meaning of section 544, and

ii.  the individual has elected, in a letter enclosed with the fiscal return the individual is required to file under section 1000 for the taxation year in which the substitution occurred and containing a description of the other property and the circumstances in which the new property was acquired, on or before the individual’s filing-due date for that taxation year, to consider the new property as being a resource property of the individual under this paragraph; and

(d)  a property, in this paragraph referred to as the “new property”, substituted for another property that was a resource property of the partnership under paragraph a or b, where

i.  the new property was then acquired by the partnership through a transaction in respect of which an election referred to in section 529 was made, and

ii.  each individual who is a member of the partnership has elected, in a letter enclosed with the fiscal return the individual is required to file under section 1000 for the individual’s taxation year in which ends the fiscal period of the partnership in which the substitution occurred and containing a description of the other property and the circumstances in which the new property was acquired, on or before the individual’s filing-due date for that taxation year, to consider the new property as being a resource property of the partnership under this paragraph.

The amount to which the portion of paragraph a of the definition of “eligible taxable capital gain amount” in the first paragraph before subparagraph i refers is the aggregate of

(a)  any amount that can reasonably be considered as deducted by the individual under this Title in respect of the disposition of the particular property in computing the individual’s taxable income for a preceding taxation year that began after 17 October 2000;

(b)  any amount that is the quotient obtained when the amount that can reasonably be considered as deducted by the individual under this Title in respect of the disposition of the particular property in computing the individual’s taxable income for a preceding taxation year that includes 28 February 2000 or 17 October 2000, or that began after 28 February 2000 and ended before 17 October 2000, is divided by twice the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for that preceding taxation year; and

(c)  2/3 of any amount that can reasonably be considered as deducted by the individual under this Title in respect of the disposition of the particular property in computing the individual’s taxable income for a preceding taxation year that ended before 28 February 2000.

Where the individual’s taxation year includes 28 February 2000 or 17 October 2000, or begins after 28 February 2000 and ends before 17 October 2000, the following rules apply:

(a)  the reference to the fraction “1/2” in the portion of paragraph a of the definition of “eligible taxable capital gain amount” in the first paragraph before subparagraph i shall be read as a reference to the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year;

(b)  the reference to the word “twice” in subparagraph b of the second paragraph shall be read, with the necessary modifications, as a reference to the fraction that is the reciprocal of the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year; and

(c)  the reference to the fraction “2/3” in subparagraph c of the second paragraph shall be read as a reference to the fraction obtained when the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year is divided by 3/4.

When paragraph c of the definition of “eligible taxable capital gain amount” in the first paragraph applies

(a)  to a taxation year that ends after 18 March 2007 and that includes 19 March 2007, it is to be read as follows:

“(c) nil, where the particular property is property described in any of sections 726.7 to 726.7.2 and the amount by which the total of the amount determined in respect of the individual for the year by the formula provided for in subparagraph a of the first paragraph of section 726.7 and, if the particular property was disposed of after 18 March 2007, $125,000, exceeds the amount, if any, deducted under Title VI.5 by the individual in computing the individual’s taxable income for the year, otherwise than under section 726.7.3 if the particular property was disposed of before 19 March 2007, is not nil;”; and

(b)  to a taxation year that begins after 19 March 2007 in relation to a resource property the disposition of which occurred before that date, it is to be read as follows:

“(c) nil, where the particular property is property described in any of sections 726.7 to 726.7.2 and the amount by which the amount that would be determined in respect of the individual for the year by the formula provided for in subparagraph a of the first paragraph of section 726.7 if the formula were read as if “$375,000” was replaced by “$250,000”, exceeds the amount, if any, deducted under Title VI.5 by the individual in computing the individual’s taxable income for the year is not nil;”.

For the purposes of paragraph d of the definition of “resource property” in the first paragraph, if an individual makes an election under subparagraph ii of that paragraph d, the following rules apply:

(a)  the election is not valid unless it was made on behalf of the individual and of each other individual who is a member of the partnership and the individual had authority to act for the partnership;

(b)  if the election is valid because of subparagraph a, each other individual who is a member of the partnership in the fiscal period is deemed to have made the election; and

(c)  despite subparagraph a, an election deemed to have been made by a member under paragraph b is deemed to be a valid election made by that member.

1993, c. 19, s. 43; 1993, c. 64, s. 65; 1995, c. 1, s. 62; 1996, c. 39, s. 191; 1997, c. 3, s. 71; 1997, c. 14, s. 290; 1997, c. 85, s. 110; 1998, c. 16, s. 182; 2000, c. 5, s. 158; 2002, c. 40, s. 55; 2003, c. 2, s. 205; 2004, c. 21, s. 126; 2005, c. 23, s. 76; 2007, c. 12, s. 83; 2009, c. 15, s. 123; 2012, c. 8, s. 69; 2017, c. 29, s. 111.

2012-05-09

726.20.1. In this Title,

“eligible taxable capital gain amount” of an individual for a taxation year from the disposition of a resource property, referred to in this definition as the “particular property”, means the least of

(a)  subject to the third paragraph, the amount by which the amount determined under the second paragraph is exceeded by 1/2 of

i.  where the particular property was owned by the individual immediately before the disposition and was a property referred to in paragraph a or b of the definition of “resource property” in respect of the individual, the amount by which the cost to the individual of the particular property, determined without reference, where applicable, to section 419.0.1, exceeds the adjusted cost base to the individual of the particular property immediately before the disposition,

ii.  where the particular property was owned by the individual immediately before the disposition and was a property referred to in paragraph c of the definition of “resource property” in respect of the individual that was substituted for another property that was a flow-through share or an interest in a partnership, the amount by which the cost to the individual of the other property, determined without reference, where applicable, to section 419.0.1, exceeds the aggregate of the adjusted cost base to the individual of the other property immediately before the substitution and the capital gain, if any, of the individual from the disposition, at the time of such a substitution, of the other property or of a property substituted for the other property,

iii.  where immediately before the disposition the particular property was owned by a particular partnership of which the individual is a member, whether directly or indirectly through another partnership, the amount that may reasonably be considered to be the individual’s share of the amount by which the cost to the partnership of the particular property, determined without reference, where applicable, to section 419.0.1, exceeds the adjusted cost base to the partnership of the particular property immediately before the disposition, and

iv.  where the particular property was owned by a particular partnership of which the individual is a member, whether directly or indirectly through another partnership, immediately before the disposition and was a property referred to in paragraph d of the definition of “resource property” in respect of the individual that was substituted for another property that was a flow-through share or an interest in a partnership, the amount that may reasonably be considered to be the individual’s share of the amount by which the cost to the partnership of the other property, determined without reference, where applicable, to section 419.0.1, exceeds the aggregate of the adjusted cost base to the partnership of the other property immediately before the substitution and the capital gain, if any, of the partnership from the disposition, at the time of such a substitution, of the other property or of a property substituted for the other property;

(b)  where paragraph a or d of section 231.2 applies in respect of the disposition of the particular property, the amount that would correspond to the individual’s taxable capital gain for the year from the disposition if that section were read without reference to that paragraph and, in any other case, the individual’s taxable capital gain for the year from the disposition of the particular property; and

(c)  subject to the fourth paragraph, nil, where the particular property is property described in any of sections 726.7 to 726.7.2 and the amount by which the amount determined in respect of the individual for the year by the formula provided for in subparagraph a of the first paragraph of section 726.7 exceeds the amount, if any, deducted under Title VI.5 by the individual in computing the individual’s taxable income for the year is not nil;

“resource property” of an individual or partnership means capital property owned by the individual or the partnership, as the case may be, that is

(a)  a flow-through share issued to the individual or partnership pursuant to an agreement in writing entered into after 14 May 1992, as part of a public share issue, where the flow-through share was issued as part of such an issue, in respect of which the receipt for the final prospectus or the exemption from filing a prospectus was granted after that date, except for a flow-through share that

i.  was issued following an investment made after 12 June 2003, or following an application for a receipt for the preliminary prospectus or an application for an exemption from filing a prospectus made after 12 June 2003, and

ii.  was acquired by the individual or partnership before 31 March 2004;

(b)  an interest in a particular partnership acquired by the individual or partnership after 14 May 1992 as part of a public issue of interests in a partnership, where the interest in the particular partnership was acquired as part of such an issue, in respect of which the receipt for the final prospectus or the exemption from filing a prospectus was granted after that date, provided that

i.  any of the following conditions is met:

(1)  a flow-through share referred to in paragraph a is issued to the particular partnership, or

(2)  the particular partnership incurs Canadian exploration expenses or Canadian development expenses after 14 May 1992 otherwise than by reason of the acquisition of a flow-through share, and

ii.  where the condition set out in subparagraph 2 of subparagraph i is met, the interest in the particular partnership was not acquired by the individual or partnership before 31 March 2004 following an investment made after 12 June 2003, or following an application for a receipt for the preliminary prospectus or an application for an exemption from filing a prospectus made after 12 June 2003; and

(c)  a property, in this paragraph referred to as the “new property”, substituted for another property that was a resource property of the individual under paragraph a or b, where

i.  the new property was then acquired by the individual through a transaction in respect of which an election referred to in section 518, 614 or 620 was made or in respect of which sections 530 to 533, 536 to 539, 541 to 543.2 or 626 to 632 apply, on the winding-up of a Canadian corporation in respect of which sections 556 to 564.1 and 565 apply, or by reason of an amalgamation within the meaning of section 544, and

ii.  the individual has elected, in a letter enclosed with the fiscal return the individual is required to file under section 1000 for the taxation year in which the substitution occurred and containing a description of the other property and the circumstances in which the new property was acquired, on or before the individual’s filing-due date for that taxation year, to consider the new property as being a resource property of the individual under this paragraph; and

(d)  a property, in this paragraph referred to as the “new property”, substituted for another property that was a resource property of the partnership under paragraph a or b, where

i.  the new property was then acquired by the partnership through a transaction in respect of which an election referred to in section 529 was made, and

ii.  each individual who is a member of the partnership has elected, in a letter enclosed with the fiscal return the individual is required to file under section 1000 for the individual’s taxation year in which ends the fiscal period of the partnership in which the substitution occurred and containing a description of the other property and the circumstances in which the new property was acquired, on or before the individual’s filing-due date for that taxation year, to consider the new property as being a resource property of the partnership under this paragraph.

The amount to which the portion of paragraph a of the definition of “eligible taxable capital gain amount” in the first paragraph before subparagraph i refers is the aggregate of

(a)  any amount that can reasonably be considered as deducted by the individual under this Title in respect of the disposition of the particular property in computing the individual’s taxable income for a preceding taxation year that began after 17 October 2000;

(b)  any amount that is the quotient obtained when the amount that can reasonably be considered as deducted by the individual under this Title in respect of the disposition of the particular property in computing the individual’s taxable income for a preceding taxation year that includes 28 February 2000 or 17 October 2000, or that began after 28 February 2000 and ended before 17 October 2000, is divided by twice the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for that preceding taxation year; and

(c)  2/3 of any amount that can reasonably be considered as deducted by the individual under this Title in respect of the disposition of the particular property in computing the individual’s taxable income for a preceding taxation year that ended before 28 February 2000.

Where the individual’s taxation year includes 28 February 2000 or 17 October 2000, or begins after 28 February 2000 and ends before 17 October 2000, the following rules apply:

(a)  the reference to the fraction “1/2” in the portion of paragraph a of the definition of “eligible taxable capital gain amount” in the first paragraph before subparagraph i shall be read as a reference to the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year;

(b)  the reference to the word “twice” in subparagraph b of the second paragraph shall be read, with the necessary modifications, as a reference to the fraction that is the reciprocal of the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year; and

(c)  the reference to the fraction “2/3” in subparagraph c of the second paragraph shall be read as a reference to the fraction obtained when the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year is divided by 3/4.

When paragraph c of the definition of “eligible taxable capital gain amount” in the first paragraph applies

(a)  to a taxation year that ends after 18 March 2007 and that includes 19 March 2007, it is to be read as follows:

“(c) nil, where the particular property is property described in any of sections 726.7 to 726.7.2 and the amount by which the total of the amount determined in respect of the individual for the year by the formula provided for in subparagraph a of the first paragraph of section 726.7 and, if the particular property was disposed of after 18 March 2007, $125,000, exceeds the amount, if any, deducted under Title VI.5 by the individual in computing the individual’s taxable income for the year, otherwise than under section 726.7.3 if the particular property was disposed of before 19 March 2007, is not nil;”; and

(b)  to a taxation year that begins after 19 March 2007 in relation to a resource property the disposition of which occurred before that date, it is to be read as follows:

“(c) nil, where the particular property is property described in any of sections 726.7 to 726.7.2 and the amount by which the amount that would be determined in respect of the individual for the year by the formula provided for in subparagraph a of the first paragraph of section 726.7 if the formula were read as if “$375,000” was replaced by “$250,000”, exceeds the amount, if any, deducted under Title VI.5 by the individual in computing the individual’s taxable income for the year is not nil;”.

For the purposes of paragraph d of the definition of “resource property” in the first paragraph, if an individual makes an election under subparagraph ii of that paragraph d, the following rules apply:

(a)  the election is not valid unless it was made on behalf of the individual and of each other individual who is a member of the partnership and the individual had authority to act for the partnership;

(b)  if the election is valid because of subparagraph a, each other individual who is a member of the partnership in the fiscal period is deemed to have made the election; and

(c)  despite subparagraph a, an election deemed to have been made by a member under paragraph b is deemed to be a valid election made by that member.

1993, c. 19, s. 43; 1993, c. 64, s. 65; 1995, c. 1, s. 62; 1996, c. 39, s. 191; 1997, c. 3, s. 71; 1997, c. 14, s. 290; 1997, c. 85, s. 110; 1998, c. 16, s. 182; 2000, c. 5, s. 158; 2002, c. 40, s. 55; 2003, c. 2, s. 205; 2004, c. 21, s. 126; 2005, c. 23, s. 76; 2007, c. 12, s. 83; 2009, c. 15, s. 123; 2012, c. 8, s. 69.

2009-06-04

726.20.1. In this Title,

“eligible taxable capital gain amount” of an individual for a taxation year from the disposition of a resource property, referred to in this definition as the “particular property”, means the least of

(a)  subject to the third paragraph, the amount by which the amount determined under the second paragraph is exceeded by 1/2 of

i.  where the particular property was owned by the individual immediately before the disposition and was a property referred to in paragraph a or b of the definition of “resource property” in respect of the individual, the amount by which the cost to the individual of the particular property, determined without reference, where applicable, to section 419.0.1, exceeds the adjusted cost base to the individual of the particular property immediately before the disposition,

ii.  where the particular property was owned by the individual immediately before the disposition and was a property referred to in paragraph c of the definition of “resource property” in respect of the individual that was substituted for another property that was a flow-through share or an interest in a partnership, the amount by which the cost to the individual of the other property, determined without reference, where applicable, to section 419.0.1, exceeds the aggregate of the adjusted cost base to the individual of the other property immediately before the substitution and the capital gain, if any, of the individual from the disposition, at the time of such a substitution, of the other property or of a property substituted for the other property,

iii.  where immediately before the disposition the particular property was owned by a particular partnership of which the individual is a member, whether directly or indirectly through another partnership, the amount that may reasonably be considered to be the individual’s share of the amount by which the cost to the partnership of the particular property, determined without reference, where applicable, to section 419.0.1, exceeds the adjusted cost base to the partnership of the particular property immediately before the disposition, and

iv.  where the particular property was owned by a particular partnership of which the individual is a member, whether directly or indirectly through another partnership, immediately before the disposition and was a property referred to in paragraph d of the definition of “resource property” in respect of the individual that was substituted for another property that was a flow-through share or an interest in a partnership, the amount that may reasonably be considered to be the individual’s share of the amount by which the cost to the partnership of the other property, determined without reference, where applicable, to section 419.0.1, exceeds the aggregate of the adjusted cost base to the partnership of the other property immediately before the substitution and the capital gain, if any, of the partnership from the disposition, at the time of such a substitution, of the other property or of a property substituted for the other property;

(b)  the taxable capital gain of the individual for the year from the disposition of the particular property; and

(c)  subject to the fourth paragraph, nil, where the particular property is property described in any of sections 726.7 to 726.7.2 and the amount by which the amount determined in respect of the individual for the year by the formula provided for in subparagraph a of the first paragraph of section 726.7 exceeds the amount, if any, deducted under Title VI.5 by the individual in computing the individual’s taxable income for the year is not nil;

“resource property” of an individual or partnership means capital property owned by the individual or the partnership, as the case may be, that is

(a)  a flow-through share issued to the individual or partnership pursuant to an agreement in writing entered into after 14 May 1992, as part of a public share issue, where the flow-through share was issued as part of such an issue, in respect of which the receipt for the final prospectus or the exemption from filing a prospectus was granted after that date, except for a flow-through share that

i.  was issued following an investment made after 12 June 2003, or following an application for a receipt for the preliminary prospectus or an application for an exemption from filing a prospectus made after 12 June 2003, and

ii.  was acquired by the individual or partnership before 31 March 2004;

(b)  an interest in a particular partnership acquired by the individual or partnership after 14 May 1992 as part of a public issue of interests in a partnership, where the interest in the particular partnership was acquired as part of such an issue, in respect of which the receipt for the final prospectus or the exemption from filing a prospectus was granted after that date, provided that

i.  any of the following conditions is met:

(1)  a flow-through share referred to in paragraph a is issued to the particular partnership, or

(2)  the particular partnership incurs Canadian exploration expenses or Canadian development expenses after 14 May 1992 otherwise than by reason of the acquisition of a flow-through share, and

ii.  where the condition set out in subparagraph 2 of subparagraph i is met, the interest in the particular partnership was not acquired by the individual or partnership before 31 March 2004 following an investment made after 12 June 2003, or following an application for a receipt for the preliminary prospectus or an application for an exemption from filing a prospectus made after 12 June 2003; and

(c)  a property, in this paragraph referred to as the “new property”, substituted for another property that was a resource property of the individual under paragraph a or b, where

i.  the new property was then acquired by the individual through a transaction in respect of which an election referred to in section 518, 614 or 620 was made or in respect of which sections 530 to 533, 536 to 539, 541 to 543.2 or 626 to 632 apply, on the winding-up of a Canadian corporation in respect of which sections 556 to 564.1 and 565 apply, or by reason of an amalgamation within the meaning of section 544, and

ii.  the individual has elected, in a letter enclosed with the fiscal return the individual is required to file under section 1000 for the taxation year in which the substitution occurred and containing a description of the other property and the circumstances in which the new property was acquired, on or before the individual’s filing-due date for that taxation year, to consider the new property as being a resource property of the individual under this paragraph; and

(d)  a property, in this paragraph referred to as the “new property”, substituted for another property that was a resource property of the partnership under paragraph a or b, where

i.  the new property was then acquired by the partnership through a transaction in respect of which an election referred to in section 529 was made, and

ii.  each individual who is a member of the partnership has elected, in a letter enclosed with the fiscal return the individual is required to file under section 1000 for the individual’s taxation year in which ends the fiscal period of the partnership in which the substitution occurred and containing a description of the other property and the circumstances in which the new property was acquired, on or before the individual’s filing-due date for that taxation year, to consider the new property as being a resource property of the partnership under this paragraph.

The amount to which the portion of paragraph a of the definition of “eligible taxable capital gain amount” in the first paragraph before subparagraph i refers is the aggregate of

(a)  any amount that can reasonably be considered as deducted by the individual under this Title in respect of the disposition of the particular property in computing the individual’s taxable income for a preceding taxation year that began after 17 October 2000;

(b)  any amount that is the quotient obtained when the amount that can reasonably be considered as deducted by the individual under this Title in respect of the disposition of the particular property in computing the individual’s taxable income for a preceding taxation year that includes 28 February 2000 or 17 October 2000, or that began after 28 February 2000 and ended before 17 October 2000, is divided by twice the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for that preceding taxation year; and

(c)  2/3 of any amount that can reasonably be considered as deducted by the individual under this Title in respect of the disposition of the particular property in computing the individual’s taxable income for a preceding taxation year that ended before 28 February 2000.

Where the individual’s taxation year includes 28 February 2000 or 17 October 2000, or begins after 28 February 2000 and ends before 17 October 2000, the following rules apply:

(a)  the reference to the fraction “1/2” in the portion of paragraph a of the definition of “eligible taxable capital gain amount” in the first paragraph before subparagraph i shall be read as a reference to the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year;

(b)  the reference to the word “twice” in subparagraph b of the second paragraph shall be read, with the necessary modifications, as a reference to the fraction that is the reciprocal of the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year; and

(c)  the reference to the fraction “2/3” in subparagraph c of the second paragraph shall be read as a reference to the fraction obtained when the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year is divided by 3/4.

When paragraph c of the definition of “eligible taxable capital gain amount” in the first paragraph applies

(a)  to a taxation year that ends after 18 March 2007 and that includes 19 March 2007, it is to be read as follows:

“(c) nil, where the particular property is property described in any of sections 726.7 to 726.7.2 and the amount by which the total of the amount determined in respect of the individual for the year by the formula provided for in subparagraph a of the first paragraph of section 726.7 and, if the particular property was disposed of after 18 March 2007, $125,000, exceeds the amount, if any, deducted under Title VI.5 by the individual in computing the individual’s taxable income for the year, otherwise than under section 726.7.3 if the particular property was disposed of before 19 March 2007, is not nil;”; and

(b)  to a taxation year that begins after 19 March 2007 in relation to a resource property the disposition of which occurred before that date, it is to be read as follows:

“(c) nil, where the particular property is property described in any of sections 726.7 to 726.7.2 and the amount by which the amount that would be determined in respect of the individual for the year by the formula provided for in subparagraph a of the first paragraph of section 726.7 if the formula were read as if “$375,000” was replaced by “$250,000”, exceeds the amount, if any, deducted under Title VI.5 by the individual in computing the individual’s taxable income for the year is not nil;”.

For the purposes of paragraph d of the definition of “resource property” in the first paragraph, if an individual makes an election under subparagraph ii of that paragraph d, the following rules apply:

(a)  the election is not valid unless it was made on behalf of the individual and of each other individual who is a member of the partnership and the individual had authority to act for the partnership;

(b)  if the election is valid because of subparagraph a, each other individual who is a member of the partnership in the fiscal period is deemed to have made the election; and

(c)  despite subparagraph a, an election deemed to have been made by a member under paragraph b is deemed to be a valid election made by that member.

1993, c. 19, s. 43; 1993, c. 64, s. 65; 1995, c. 1, s. 62; 1996, c. 39, s. 191; 1997, c. 3, s. 71; 1997, c. 14, s. 290; 1997, c. 85, s. 110; 1998, c. 16, s. 182; 2000, c. 5, s. 158; 2002, c. 40, s. 55; 2003, c. 2, s. 205; 2004, c. 21, s. 126; 2005, c. 23, s. 76; 2007, c. 12, s. 83; 2009, c. 15, s. 123.

2007-11-07

726.20.1. In this Title,

“eligible taxable capital gain amount” of an individual for a taxation year from the disposition of a resource property, referred to in this definition as the “particular property”, means the least of

(a)  subject to the third paragraph, the amount by which the amount determined under the second paragraph is exceeded by 1/2 of

i.  where the particular property was owned by the individual immediately before the disposition and was a property referred to in paragraph a or b of the definition of “resource property” in respect of the individual, the amount by which the cost to the individual of the particular property, determined without reference, where applicable, to section 419.0.1, exceeds the adjusted cost base to the individual of the particular property immediately before the disposition,

ii.  where the particular property was owned by the individual immediately before the disposition and was a property referred to in paragraph c of the definition of “resource property” in respect of the individual that was substituted for another property that was a flow-through share or an interest in a partnership, the amount by which the cost to the individual of the other property, determined without reference, where applicable, to section 419.0.1, exceeds the aggregate of the adjusted cost base to the individual of the other property immediately before the substitution and the capital gain, if any, of the individual from the disposition of the other property at the time of the substitution,

iii.  where immediately before the disposition the particular property was owned by a particular partnership of which the individual is a member, whether directly or indirectly through another partnership, the amount that may reasonably be considered to be the individual’s share of the amount by which the cost to the partnership of the particular property, determined without reference, where applicable, to section 419.0.1, exceeds the adjusted cost base to the partnership of the particular property immediately before the disposition, and

iv.  where the particular property was owned by a particular partnership of which the individual is a member, whether directly or indirectly through another partnership, immediately before the disposition and was a property referred to in paragraph d of the definition of “resource property” in respect of the individual that was substituted for another property that was a flow-through share or an interest in a partnership, the amount that may reasonably be considered to be the individual’s share of the amount by which the cost to the partnership of the other property, determined without reference, where applicable, to section 419.0.1, exceeds the aggregate of the adjusted cost base to the partnership of the other property immediately before the substitution and the capital gain, if any, of the partnership from the disposition of the other property at the time of the substitution;

(b)  the taxable capital gain of the individual for the year from the disposition of the particular property; and

(c)  nil, where the particular property is property described in any of sections 726.7 to 726.7.2 and the amount by which the amount determined in respect of the individual for the year by the formula provided for in subparagraph a of the first paragraph of section 726.7 exceeds the amount, if any, deducted under Title VI.5 by the individual in computing the individual’s taxable income for the year is not nil;

“resource property” of an individual or partnership means capital property owned by the individual or the partnership, as the case may be, that is

(a)  a flow-through share issued to the individual or partnership pursuant to an agreement in writing entered into after 14 May 1992, as part of a public share issue, where the flow-through share was issued as part of such an issue, in respect of which the receipt for the final prospectus or the exemption from filing a prospectus was granted after that date, except for a flow-through share that

i.  was issued following an investment made after 12 June 2003, or following an application for a receipt for the preliminary prospectus or an application for an exemption from filing a prospectus made after 12 June 2003, and

ii.  was acquired by the individual or partnership before 31 March 2004;

(b)  an interest in a particular partnership acquired by the individual or partnership after 14 May 1992 as part of a public issue of interests in a partnership, where the interest in the particular partnership was acquired as part of such an issue, in respect of which the receipt for the final prospectus or the exemption from filing a prospectus was granted after that date, provided that

i.  any of the following conditions is met:

(1)  a flow-through share referred to in paragraph a is issued to the particular partnership, or

(2)  the particular partnership incurs Canadian exploration expenses or Canadian development expenses after 14 May 1992 otherwise than by reason of the acquisition of a flow-through share, and

ii.  where the condition set out in subparagraph 2 of subparagraph i is met, the interest in the particular partnership was not acquired by the individual or partnership before 31 March 2004 following an investment made after 12 June 2003, or following an application for a receipt for the preliminary prospectus or an application for an exemption from filing a prospectus made after 12 June 2003; and

(c)  a property, in this paragraph referred to as the “new property”, substituted for another property that was a resource property of the individual under paragraph a or b, where

i.  the new property was then acquired by the individual through a transaction in respect of which an election referred to in section 518, 614 or 620 was made or in respect of which sections 536 to 539, 541 to 543.2 or 626 to 632 apply, on the winding-up of a Canadian corporation in respect of which sections 556 to 564.1 and 565 apply, or by reason of an amalgamation within the meaning of section 544, and

ii.  the individual has elected, in a letter enclosed with the fiscal return the individual is required to file under section 1000 for the taxation year in which the substitution occurred and containing a description of the other property and the circumstances in which the new property was acquired, on or before the individual’s filing-due date for that taxation year, to consider the new property as being a resource property of the individual under this paragraph; and

(d)  a property, in this paragraph referred to as the “new property”, substituted for another property that was a resource property of the partnership under paragraph a or b, where

i.  the new property was then acquired by the partnership through a transaction in respect of which an election referred to in section 529 was made, and

ii.  each individual who is a member of the partnership has elected, in a letter enclosed with the fiscal return the individual is required to file under section 1000 for the individual’s taxation year in which ends the fiscal period of the partnership in which the substitution occurred and containing a description of the other property and the circumstances in which the new property was acquired, on or before the individual’s filing-due date for that taxation year, to consider the new property as being a resource property of the partnership under this paragraph.

The amount to which the portion of paragraph a of the definition of “eligible taxable capital gain amount” in the first paragraph before subparagraph i refers is the aggregate of

(a)  any amount that can reasonably be considered as deducted by the individual under this Title in respect of the disposition of the particular property in computing the individual’s taxable income for a preceding taxation year that began after 17 October 2000;

(b)  any amount that is the quotient obtained when the amount that can reasonably be considered as deducted by the individual under this Title in respect of the disposition of the particular property in computing the individual’s taxable income for a preceding taxation year that includes 28 February 2000 or 17 October 2000, or that began after 28 February 2000 and ended before 17 October 2000, is divided by twice the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for that preceding taxation year; and

(c)  2/3 of any amount that can reasonably be considered as deducted by the individual under this Title in respect of the disposition of the particular property in computing the individual’s taxable income for a preceding taxation year that ended before 28 February 2000.

Where the individual’s taxation year includes 28 February 2000 or 17 October 2000, or begins after 28 February 2000 and ends before 17 October 2000, the following rules apply:

(a)  the reference to the fraction “1/2” in the portion of paragraph a of the definition of “eligible taxable capital gain amount” in the first paragraph before subparagraph i shall be read as a reference to the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year;

(b)  the reference to the word “twice” in subparagraph b of the second paragraph shall be read, with the necessary modifications, as a reference to the fraction that is the reciprocal of the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year; and

(c)  the reference to the fraction “2/3” in subparagraph c of the second paragraph shall be read as a reference to the fraction obtained when the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year is divided by 3/4.

1993, c. 19, s. 43; 1993, c. 64, s. 65; 1995, c. 1, s. 62; 1996, c. 39, s. 191; 1997, c. 3, s. 71; 1997, c. 14, s. 290; 1997, c. 85, s. 110; 1998, c. 16, s. 182; 2000, c. 5, s. 158; 2002, c. 40, s. 55; 2003, c. 2, s. 205; 2004, c. 21, s. 126; 2005, c. 23, s. 76; 2007, c. 12, s. 83.

2006-03-01

726.20.1. In this Title,

“eligible taxable capital gain amount” of an individual for a taxation year from the disposition of a resource property, referred to in this definition as the “particular property”, means the least of

(a)  subject to the third paragraph, the amount by which the amount determined under the second paragraph is exceeded by 1/2 of

i.  where the particular property was owned by the individual immediately before the disposition and was a property referred to in paragraph a or b of the definition of “resource property” in respect of the individual, the amount by which the cost to the individual of the particular property, determined without reference, where applicable, to section 419.0.1, exceeds the adjusted cost base to the individual of the particular property immediately before the disposition,

ii.  where the particular property was owned by the individual immediately before the disposition and was a property referred to in paragraph c of the definition of “resource property” in respect of the individual that was substituted for another property that was a flow-through share or an interest in a partnership, the amount by which the cost to the individual of the other property, determined without reference, where applicable, to section 419.0.1, exceeds the aggregate of the adjusted cost base to the individual of the other property immediately before the substitution and the capital gain, if any, of the individual from the disposition of the other property at the time of the substitution, and

iii.  where immediately before the disposition the particular property was owned by a particular partnership of which the individual is a member, whether directly or indirectly through another partnership, the amount that may reasonably be considered to be the individual’s share of the amount by which the cost to the partnership of the particular property, determined without reference, where applicable, to section 419.0.1, exceeds the adjusted cost base to the partnership of the particular property immediately before the disposition;

(b)  the taxable capital gain of the individual for the year from the disposition of the particular property; and

(c)  nil, where the particular property is property described in any of sections 726.7 to 726.7.2 and the amount by which the amount determined in respect of the individual for the year by the formula provided for in subparagraph a of the first paragraph of section 726.7 exceeds the amount, if any, deducted under Title VI.5 by the individual in computing the individual’s taxable income for the year is not nil;

“resource property” of an individual or partnership means capital property owned by the individual or the partnership, as the case may be, that is

(a)  a flow-through share issued to the individual or partnership pursuant to an agreement in writing entered into after 14 May 1992, as part of a public share issue, where the flow-through share was issued as part of such an issue, in respect of which the receipt for the final prospectus or the exemption from filing a prospectus was granted after that date, except for a flow-through share that

i.  was issued following an investment made after 12 June 2003, or following an application for a receipt for the preliminary prospectus or an application for an exemption from filing a prospectus made after 12 June 2003, and

ii.  was acquired by the individual or partnership before 31 March 2004;

(b)  an interest in a particular partnership acquired by the individual or partnership after 14 May 1992 as part of a public issue of interests in a partnership, where the interest in the particular partnership was acquired as part of such an issue, in respect of which the receipt for the final prospectus or the exemption from filing a prospectus was granted after that date, provided that

i.  any of the following conditions is met:

(1)  a flow-through share referred to in paragraph a is issued to the particular partnership, or

(2)  the particular partnership incurs Canadian exploration expenses or Canadian development expenses after 14 May 1992 otherwise than by reason of the acquisition of a flow-through share, and

ii.  where the condition set out in subparagraph 2 of subparagraph i is met, the interest in the particular partnership was not acquired by the individual or partnership before 31 March 2004 following an investment made after 12 June 2003, or following an application for a receipt for the preliminary prospectus or an application for an exemption from filing a prospectus made after 12 June 2003; and

(c)  a property, in this paragraph referred to as the “new property”, substituted for another property that was a resource property of the individual under paragraph a or b, where

i.  the new property was then acquired by the individual through a transaction in respect of which an election referred to in section 518, 614 or 620 was made or in respect of which sections 536 to 539, 541 to 543.2 or 626 to 632 apply, on the winding-up of a Canadian corporation in respect of which sections 556 to 564.1 and 565 apply, or by reason of an amalgamation within the meaning of section 544, and

ii.  the individual has elected, in a letter enclosed with his fiscal return and containing, in particular, a description of the other property and the circumstances in which the new property was acquired, on or before the day on or before which the individual is required to file his fiscal return under section 1000 for the taxation year in which the substitution occurred, to consider the new property as being a resource property of the individual under this paragraph.

The amount to which the portion of paragraph a of the definition of “eligible taxable capital gain amount” in the first paragraph before subparagraph i refers is the aggregate of

(a)  any amount that can reasonably be considered as deducted by the individual under this Title in respect of the disposition of the particular property in computing the individual’s taxable income for a preceding taxation year that began after 17 October 2000;

(b)  any amount that is the quotient obtained when the amount that can reasonably be considered as deducted by the individual under this Title in respect of the disposition of the particular property in computing the individual’s taxable income for a preceding taxation year that includes 28 February 2000 or 17 October 2000, or that began after 28 February 2000 and ended before 17 October 2000, is divided by twice the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for that preceding taxation year; and

(c)  2/3 of any amount that can reasonably be considered as deducted by the individual under this Title in respect of the disposition of the particular property in computing the individual’s taxable income for a preceding taxation year that ended before 28 February 2000.

Where the individual’s taxation year includes 28 February 2000 or 17 October 2000, or begins after 28 February 2000 and ends before 17 October 2000, the following rules apply:

(a)  the reference to the fraction “1/2” in the portion of paragraph a of the definition of “eligible taxable capital gain amount” in the first paragraph before subparagraph i shall be read as a reference to the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year;

(b)  the reference to the word “twice” in subparagraph b of the second paragraph shall be read, with the necessary modifications, as a reference to the fraction that is the reciprocal of the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year; and

(c)  the reference to the fraction “2/3” in subparagraph c of the second paragraph shall be read as a reference to the fraction obtained when the fraction in paragraphs a to d of section 231.0.1 that applies to the individual for the year is divided by 3/4.

1993, c. 19, s. 43; 1993, c. 64, s. 65; 1995, c. 1, s. 62; 1996, c. 39, s. 191; 1997, c. 3, s. 71; 1997, c. 14, s. 290; 1997, c. 85, s. 110; 1998, c. 16, s. 182; 2000, c. 5, s. 158; 2002, c. 40, s. 55; 2003, c. 2, s. 205; 2004, c. 21, s. 126; 2005, c. 23, s. 76.