I-3 - Taxation Act

Section 125.3 Disposition versions

2006-03-01

125.3. Subject to section 125.4, where at any particular time a lessee who has made an election under section 125.1 in respect of a leased property assigns the lease or subleases the property to another person with whom he is not dealing at arm’s length, the other person is deemed, for the purposes of section 125.1 and for the purposes of computing his income in respect of the lease for any period after the particular time, to be the same person as, and the continuation of, the lessee.

However, notwithstanding paragraph b of section 125.1, that other person is deemed to have acquired the property from the lessee at the time that it was acquired by the lessee, at a cost equal to the lessee’s proceeds of disposition of the property that would be determined under paragraph f of section 125.1 if the said paragraph f were read without reference to “and the amounts received or receivable by the lessee in respect of the cancellation or assignment of the lease or the sublease of the property” and to “and the amounts paid or payable by or on behalf of the lessee in respect of the cancellation or assignment of the lease or the sublease of the property”, with the necessary modifications.

1991, c. 25, s. 42; 1994, c. 22, s. 98; 1995, c. 63, s. 261.