106.1. Despite any other provision of this Part, if at a particular time a person or partnership, in this section referred to as the “purchaser”, has, directly or indirectly, in any manner whatever, acquired an incorporeal capital property in respect of a business from a transferor being a person or partnership with whom or with which the purchaser was not dealing at arm’s length, and the property was an incorporeal capital property of the transferor, other than a property acquired by the purchaser as a consequence of the death of the transferor, the incorporeal capital amount of the purchaser in respect of the business is deemed, in respect of that acquisition, to be equal to 4/3 of the amount by which either the amount determined under subparagraph b of the second paragraph of section 107 in respect of the disposition of the property by the transferor, or, if the transferor makes an election under section 105.2.1 or 105.2.2 in respect of the property, 3/4 of the actual proceeds of disposition referred to in that section, exceeds the aggregate of(a) the aggregate of all amounts each of which is an amount that can reasonably be considered to have been claimed as a deduction under Title VI.5 of Book IV, for a taxation year that ends before 28 February 2000, by any person with whom the purchaser was not dealing at arm’s length in respect of the disposition of the property by the transferor, or any other disposition of the property before the particular time;
(b) 9/8 of the aggregate of all amounts each of which is an amount that can reasonably be considered to have been claimed as a deduction under Title VI.5 of Book IV, for a taxation year that ends after 27 February 2000 but before 18 October 2000, by any person with whom the purchaser was not dealing at arm’s length in respect of the disposition of the property by the transferor, or any other disposition of the property before the particular time; and
(c) 3/2 of the aggregate of all amounts each of which is an amount that can reasonably be considered to have been claimed as a deduction under Title VI.5 of Book IV, for a taxation year that ends after 17 October 2000, by any person with whom the purchaser was not dealing at arm’s length in respect of the disposition of the property by the transferor, or any other disposition of the property before the particular time.
Notwithstanding the foregoing, where the purchaser disposes of the property after the particular time, the amount which is deemed under the first paragraph to be the incorporeal capital amount of the purchaser in relation to the property shall be determined at any time after the disposition as if the aggregate of the amounts determined under subparagraphs a to c of the first paragraph in respect of the property were the lesser of(a) the amount otherwise so determined, and
(b) the amount by which the amount determined under subparagraph b of the second paragraph of section 107 in respect of the disposition of the property by the transferor exceeds the amount determined under that subparagraph b in respect of the disposition of the property by the purchaser.