I-3 - Taxation Act

Section 158.13 Disposition versions

2006-03-01

158.13. Where the rate of return on a taxpayer’s right to receive production to which a matchable expenditure, other than a matchable expenditure no portion of which would, if this division were read without reference to this section, be deductible under section 158.3 in computing the taxpayer’s income, relates is reasonably certain at the time the taxpayer acquires the right, the following rules apply:

(a)  for the purposes of section 92.5 and the regulations made under that section,

i.  the right is deemed to be a debt obligation in respect of which no interest is stipulated to be payable in respect of the principal amount, and

ii.  the obligation is deemed to be satisfied at the time the right terminates for an amount equal to the total of the return on the debt obligation and the amount that would otherwise be the matchable expenditure that is related to the right; and

(b)  notwithstanding section 158.3, no amount may be deducted in computing the taxpayer’s income in respect of any matchable expenditure that relates to the right.

2001, c. 7, s. 26.