I-3 - Taxation Act

Section 418.15 Disposition versions

2023-09-26

418.15. In this chapter, the expression

(a)  “reserve amount” of a corporation for a taxation year in respect of an original owner or predecessor owner of a Canadian resource property means the amount by which

i.  the aggregate of all amounts that are required to be included, under paragraph b of section 330, in computing its income for the year, and required to be included under section 545 or section 564 where it refers to the said section 545, in respect of a reserve deducted under section 357 or 358, as it applies in respect of a disposition made before 13 November 1981, in computing the income of the original owner or predecessor owner exceeds

ii.  the aggregate of all amounts deducted under section 357 or 358, as it applies in respect of a disposition made before 13 November 1981, in computing its income for the year in respect of the disposition of property by the original owner or the predecessor owner, as the case may be;

(b)  “predecessor owner” of a Canadian resource property or a foreign resource property means a corporation

i.  that acquired the property in circumstances in which any of sections 418.16 to 418.21 or section 88.4 of the Act respecting the application of the Taxation Act (chapter I-4), to the extent that that section refers to subsection 25 of section 29 of the Income Tax Application Rules (R.S.C. 1985, c. 2 (5th Suppl.)), applies, or would apply if the corporation had continued to own the property, to the corporation in respect of the property,

ii.  that disposed of the property to another corporation that acquired it in circumstances in which any of sections 418.16 to 418.21 or section 88.4 of the Act respecting the application of the Taxation Act, to the extent that that section refers to subsection 25 of section 29 of the Income Tax Application Rules, applies, or would apply if the other corporation had continued to own the property, to the other corporation in respect of the property, and

iii.  that would, but for section 418.33, 418.34, 418.34.1 or 418.36, as the case may be, be entitled in computing its income for a taxation year ending after it disposed of the property to a deduction under any of sections 418.16 to 418.21 or section 88.4 of the Act respecting the application of the Taxation Act, to the extent that that section refers to subsection 25 of section 29 of the Income Tax Application Rules, in respect of expenses incurred by an original owner of the property;

(c)  “original owner” of a Canadian resource property or a foreign resource property means a person

i.  who owned the property and disposed of it to a corporation that acquired it in circumstances in which any of sections 418.16 to 418.21 or section 88.4 of the Act respecting the application of the Taxation Act, to the extent that that section refers to subsection 25 of section 29 of the Income Tax Application Rules, applies, or would apply if the corporation had continued to own the property, to the corporation in respect of the property, and

ii.  who would, but for section 418.31, 418.32, 418.32.1 or 418.36, as the case may be, be entitled in respect of expenses described in section 88.5 of the Act respecting the application of the Taxation Act, to the extent that section 88.4 of that Act refers to expenses described in subparagraph i or ii of paragraph c of subsection 25 of section 29 of the Income Tax Application Rules, Canadian exploration and development expenses, foreign resource pool expenses, Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses incurred by the person before the person disposed of the property to a deduction, in computing the person’s income for a taxation year ending after the person disposed of the property, under that section 88.4, to the extent that it refers to section 29 of the Income Tax Application Rules, or under any of sections 367, 368, 371, 400, 401, 413, 414, 418.1.10 and 418.7.

For the purposes of this chapter, except for the purposes of subparagraph b of the second paragraph of section 414 and subparagraph c of the first paragraph of section 418.20, “production” from a Canadian resource property or a foreign resource property means

(a)  petroleum, natural gas and related hydrocarbons produced from the property,

(b)  heavy crude oil produced from the property processed to any stage that is not beyond the crude oil stage or its equivalent,

(c)  ore, other than iron ore or tar sands, produced from the property processed to any stage that is not beyond the prime metal stage or its equivalent,

(d)  iron ore produced from the property processed to any stage that is not beyond the pellet stage or its equivalent,

(e)  tar sands produced from the property processed to any stage that is not beyond the crude oil stage or its equivalent, and

(f)  any rental or royalty from the property computed by reference to the amount or value of the production of petroleum, natural gas or related hydrocarbons or ore.

1989, c. 77, s. 49; 1995, c. 49, s. 236; 1996, c. 39, s. 273; 1997, c. 3, s. 71; 1997, c. 14, s. 71; 1998, c. 16, s. 158; 2004, c. 8, s. 82; 2023, c. 19, s. 31.

2006-03-01

418.15. In this chapter, the expression

(a)  “reserve amount” of a corporation for a taxation year in respect of an original owner or predecessor owner of a Canadian resource property means the amount by which

i.  the aggregate of all amounts that are required to be included, under paragraph b of section 330, in computing its income for the year, and required to be included under section 545 or section 564 where it refers to the said section 545, in respect of a reserve deducted under section 357 or 358 in computing the income of the original owner or predecessor owner exceeds

ii.  the aggregate of all amounts deducted under section 357 or 358 in computing its income for the year in respect of the disposition of property by the original owner or the predecessor owner, as the case may be;

(b)  “predecessor owner” of a Canadian resource property or a foreign resource property means a corporation

i.  that acquired the property in circumstances in which any of sections 418.16 to 418.21 or section 88.4 of the Act respecting the application of the Taxation Act (chapter I-4), to the extent that that section refers to subsection 25 of section 29 of the Income Tax Application Rules (Revised Statutes of Canada, 1985, chapter 2, 5th Supplement), applies, or would apply if the corporation had continued to own the property, to the corporation in respect of the property,

ii.  that disposed of the property to another corporation that acquired it in circumstances in which any of sections 418.16 to 418.21 or section 88.4 of the Act respecting the application of the Taxation Act, to the extent that that section refers to subsection 25 of section 29 of the Income Tax Application Rules, applies, or would apply if the other corporation had continued to own the property, to the other corporation in respect of the property, and

iii.  that would, but for section 418.33, 418.34, 418.34.1 or 418.36, as the case may be, be entitled in computing its income for a taxation year ending after it disposed of the property to a deduction under any of sections 418.16 to 418.21 or section 88.4 of the Act respecting the application of the Taxation Act, to the extent that that section refers to subsection 25 of section 29 of the Income Tax Application Rules, in respect of expenses incurred by an original owner of the property;

(c)  “original owner” of a Canadian resource property or a foreign resource property means a person

i.  who owned the property and disposed of it to a corporation that acquired it in circumstances in which any of sections 418.16 to 418.21 or section 88.4 of the Act respecting the application of the Taxation Act, to the extent that that section refers to subsection 25 of section 29 of the Income Tax Application Rules, applies, or would apply if the corporation had continued to own the property, to the corporation in respect of the property, and

ii.  who would, but for section 418.31, 418.32, 418.32.1 or 418.36, as the case may be, be entitled in respect of expenses described in section 88.5 of the Act respecting the application of the Taxation Act, to the extent that section 88.4 of that Act refers to expenses described in subparagraph i or ii of paragraph c of subsection 25 of section 29 of the Income Tax Application Rules, Canadian exploration and development expenses, foreign resource pool expenses, Canadian exploration expenses, Canadian development expenses or Canadian oil and gas property expenses incurred by the person before the person disposed of the property to a deduction, in computing the person’s income for a taxation year ending after the person disposed of the property, under that section 88.4, to the extent that it refers to section 29 of the Income Tax Application Rules, or under any of sections 367, 368, 371, 400, 401, 413, 414, 418.1.10 and 418.7.

For the purposes of this chapter, except for the purposes of subparagraph b of the second paragraph of section 414 and subparagraph c of the first paragraph of section 418.20, “production” from a Canadian resource property or a foreign resource property means

(a)  petroleum, natural gas and related hydrocarbons produced from the property,

(b)  heavy crude oil produced from the property processed to any stage that is not beyond the crude oil stage or its equivalent,

(c)  ore, other than iron ore or tar sands, produced from the property processed to any stage that is not beyond the prime metal stage or its equivalent,

(d)  iron ore produced from the property processed to any stage that is not beyond the pellet stage or its equivalent,

(e)  tar sands produced from the property processed to any stage that is not beyond the crude oil stage or its equivalent, and

(f)  any rental or royalty from the property computed by reference to the amount or value of the production of petroleum, natural gas or related hydrocarbons or ore.

1989, c. 77, s. 49; 1995, c. 49, s. 236; 1996, c. 39, s. 273; 1997, c. 3, s. 71; 1997, c. 14, s. 71; 1998, c. 16, s. 158; 2004, c. 8, s. 82.