I-3 - Taxation Act

Section 158.1 Disposition versions

2006-03-01

158.1. In this division,

“matchable expenditure” of a taxpayer means the amount of an expenditure that is made by the taxpayer to

(a)  acquire a right to receive production;

(b)  fulfil a covenant or obligation in circumstances in which it is reasonable to consider that a relationship exists between the covenant or obligation and a right to receive production; or

(c)  preserve or protect a right to receive production;

“right to receive production” means a right under which a taxpayer is entitled, either immediately or in the future and either absolutely or contingently, to receive an amount all or a portion of which is established by reference to use of property, production, revenue, profit, cash flow, commodity price, cost or value of property or any other similar criterion or by reference to dividends paid or payable to shareholders of any class of shares where the amount is in respect of another taxpayer’s activity, property or business but such a right does not include an income interest in a trust, a Canadian resource property or a foreign resource property;

“tax benefit” means a reduction, avoidance or deferral of tax or other amount payable under this Act or an increase in a refund of tax or other amount under this Act;

“tax shelter” means a property that would be a tax shelter, as defined in section 1079.1, if

(a)  the cost of a right to receive production were equal to the aggregate of all amounts each of which is a matchable expenditure to which the right relates; and

(b)  sections 158.2 to 158.12 did not apply for the purpose of computing an amount, or in the case of a partnership a loss, represented to be deductible;

“taxpayer” includes a partnership.

For the purposes of the definition of “matchable expenditure” in the first paragraph, the amount of an expenditure that a taxpayer may deduct in computing the taxpayer’s income for a taxation year under this chapter, otherwise than under this division, is not a matchable expenditure.

2001, c. 7, s. 26; 2003, c. 2, s. 51.