I-3 - Taxation Act

Section 418.18 Disposition versions

2020-09-24

418.18. Subject to sections 418.22 and 418.23, where a corporation acquired after 6 May 1974 in the case of an oil business, after 31 March 1975 in the case of a mining business or after 5 December 1996 in all other cases, in any manner whatsoever, a particular Canadian resource property (referred to in this section as “particular property”), it may deduct in computing its income for a taxation year an amount not exceeding the aggregate of all amounts each of which is the lesser of the amount referred to in the second paragraph and the amount referred to in the third paragraph determined in respect of an original owner of the particular property.

The first amount to which the first paragraph refers is equal to the amount by which

(a)  the aggregate of the cumulative Canadian exploration expense of the original owner determined immediately after the disposition of the particular property by the original owner, and all amounts required to be added under paragraph c of section 418.25 to the cumulative Canadian exploration expense of the original owner in respect of a predecessor owner of the particular property, or in respect of the corporation, as the case may be, at any time after the disposition of the particular property by the original owner and before the end of the year, to the extent that an amount in respect of that aggregate was not

i.  otherwise deducted in computing the corporation’s income for the year or deducted in computing the corporation’s income for a preceding taxation year or in computing the income of a predecessor owner of the particular property for any taxation year, and

ii.  deducted or required to be deducted under section 400 or 401 in computing the income of the original owner for any taxation year, or designated by the original owner for any taxation year for the purposes of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) pursuant to subsection 14.1 of section 66 of that Act; exceeds

(b)  the aggregate of all amounts by which the amount determined under this paragraph is required, because of section 485.8, to be reduced at or before the end of the year.

The last amount to which the first paragraph refers is equal to the amount by which

(a)  the part of the corporation’s income for the year, determined before any deduction under section 88.4 of the Act respecting the application of the Taxation Act (chapter I-4) or any of sections 359 to 419.6, that may reasonably be regarded as attributable to

i.  the amount included in computing its income for the year under paragraph e of section 330 that may reasonably be regarded as being attributable to the disposition by the corporation in the year or a preceding taxation year of any right in or to the particular property to the extent that the proceeds of the disposition have not been included in computing an amount for any preceding taxation year under this subparagraph, subparagraph i of subparagraph a of the third paragraph of section 418.16, subparagraph iii of subparagraph c of the first paragraph of section 418.20, section 418.28 or section 88.4 of the Act respecting the application of the Taxation Act, to the extent that that section refers to clause A of subparagraph i of paragraph d of subsection 25 of section 29 of the Income Tax Application Rules (R.S.C. 1985, c. 2 (5th Suppl.)),

ii.  its reserve amount for the year in respect of the original owner and each predecessor owner of the particular property, or

iii.  production from the particular property; exceeds

(b)  the aggregate of

i.  any other amount deducted under 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, this section and sections 418.16, 418.19 and 418.21 for the year that can reasonably be regarded as attributable to the part of its income for the year described in subparagraph a in respect of the particular property, and

ii.  any other amount added, because of section 485.13, in computing the amount determined under subparagraph a.

1989, c. 77, s. 49; 1993, c. 16, s. 167; 1995, c. 49, s. 111; 1996, c. 39, s. 119; 1997, c. 3, s. 71; 1998, c. 16, s. 251; 2000, c. 5, s. 293; 2013, c. 10, s. 32; 2020, c. 16, s. 191.

2013-06-05

418.18. Subject to sections 418.22 and 418.23, where a corporation acquired after 6 May 1974 in the case of an oil business, after 31 March 1975 in the case of a mining business or after 5 December 1996 in all other cases, in any manner whatsoever, a particular Canadian resource property (referred to in this section as “particular property”), it may deduct in computing its income for a taxation year an amount not exceeding the aggregate of all amounts each of which is the lesser of the amount referred to in the second paragraph and the amount referred to in the third paragraph determined in respect of an original owner of the particular property.

The first amount to which the first paragraph refers is equal to the amount by which

(a)  the aggregate of the cumulative Canadian exploration expense of the original owner determined immediately after the disposition of the particular property by the original owner, and all amounts required to be added under paragraph c of section 418.25 to the cumulative Canadian exploration expense of the original owner in respect of a predecessor owner of the particular property, or in respect of the corporation, as the case may be, at any time after the disposition of the particular property by the original owner and before the end of the year, to the extent that an amount in respect of that aggregate was not

i.  otherwise deducted in computing the corporation’s income for the year or deducted in computing the corporation’s income for a preceding taxation year or in computing the income of a predecessor owner of the particular property for any taxation year, and

ii.  deducted or required to be deducted under section 400 or 401 in computing the income of the original owner for any taxation year, or designated by the original owner for any taxation year for the purposes of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) pursuant to subsection 14.1 of section 66 of that Act; exceeds

(b)  the aggregate of all amounts by which the amount determined under this paragraph is required, because of section 485.8, to be reduced at or before the end of the year.

The last amount to which the first paragraph refers is equal to the amount by which

(a)  the part of the corporation’s income for the year, determined before any deduction under section 88.4 of the Act respecting the application of the Taxation Act (chapter I-4) or any of sections 359 to 419.6, that may reasonably be regarded as attributable to

i.  the amount included in computing its income for the year under paragraph e of section 330 that may reasonably be regarded as being attributable to the disposition by the corporation in the year or a preceding taxation year of any interest in or right to the particular property to the extent that the proceeds of the disposition have not been included in computing an amount for any preceding taxation year under this subparagraph, subparagraph i of subparagraph a of the third paragraph of section 418.16, subparagraph iii of subparagraph c of the first paragraph of section 418.20, section 418.28 or section 88.4 of the Act respecting the application of the Taxation Act, to the extent that that section refers to clause A of subparagraph i of paragraph d of subsection 25 of section 29 of the Income Tax Application Rules (R.S.C. 1985, c. 2 (5th Suppl.)),

ii.  its reserve amount for the year in respect of the original owner and each predecessor owner of the particular property, or

iii.  production from the particular property; exceeds

(b)  the aggregate of

i.  any other amount deducted under 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, this section and sections 418.16, 418.19 and 418.21 for the year that can reasonably be regarded as attributable to the part of its income for the year described in subparagraph a in respect of the particular property, and

ii.  any other amount added, because of section 485.13, in computing the amount determined under subparagraph a.

1989, c. 77, s. 49; 1993, c. 16, s. 167; 1995, c. 49, s. 111; 1996, c. 39, s. 119; 1997, c. 3, s. 71; 1998, c. 16, s. 251; 2000, c. 5, s. 293; 2013, c. 10, s. 32.

2006-03-01

418.18. Subject to sections 418.22 and 418.23, where a corporation acquired after 6 May 1974 in the case of an oil business, or after 31 March 1975 in the case of a mining business, in any manner whatsoever, a particular Canadian resource property, referred to in this section as “particular property”, it may deduct in computing its income for a taxation year an amount not exceeding the aggregate of all amounts each of which is the lesser of the amount referred to in the second paragraph and the amount referred to in the third paragraph determined in respect of an original owner of the particular property.

The first amount to which the first paragraph refers is equal to the amount by which

(a)  the aggregate of the cumulative Canadian exploration expense of the original owner determined immediately after the disposition of the particular property by the original owner, and all amounts required to be added under paragraph c of section 418.25 to the cumulative Canadian exploration expense of the original owner in respect of a predecessor owner of the particular property, or in respect of the corporation, as the case may be, at any time after the disposition of the particular property by the original owner and before the end of the year, to the extent that an amount in respect of that aggregate was not

i.  otherwise deducted in computing the corporation’s income for the year or deducted in computing the corporation’s income for a preceding taxation year or in computing the income of a predecessor owner of the particular property for any taxation year, and

ii.  deducted or required to be deducted under section 400 or 401 in computing the income of the original owner for any taxation year, or designated by the original owner for any taxation year for the purposes of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement) pursuant to subsection 14.1 of section 66 of that Act; exceeds

(b)  the aggregate of all amounts by which the amount determined under this paragraph is required, because of section 485.8, to be reduced at or before the end of the year.

The last amount to which the first paragraph refers is equal to the amount by which

(a)  the part of the corporation’s income for the year, determined before any deduction under section 88.4 of the Act respecting the application of the Taxation Act (chapter I-4) or any of sections 359 to 419.6, that may reasonably be regarded as attributable to

i.  the amount included in computing its income for the year under paragraph e of section 330 that may reasonably be regarded as being attributable to the disposition by the corporation in the year or a preceding taxation year of any interest in or right to the particular property to the extent that the proceeds of the disposition have not been included in computing an amount for any preceding taxation year under this subparagraph, subparagraph i of subparagraph a of the third paragraph of section 418.16, subparagraph iii of subparagraph c of the first paragraph of section 418.20, section 418.28 or section 88.4 of the Act respecting the application of the Taxation Act, to the extent that that section refers to clause A of subparagraph i of paragraph d of subsection 25 of section 29 of the Income Tax Application Rules (Revised Statutes of Canada, 1985, chapter 2, 5th Supplement),

ii.  its reserve amount for the year in respect of the original owner and each predecessor owner of the particular property, or

iii.  production from the particular property; exceeds

(b)  the aggregate of

i.  any other amount deducted under 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 (Revised Statutes of Canada, 1985, chapter 2, 5th Supplement), this section and sections 418.16, 418.19 and 418.21 for the year that can reasonably be regarded as attributable to the part of its income for the year described in subparagraph a in respect of the particular property, and

ii.  any other amount added, because of section 485.13, in computing the amount determined under subparagraph a.

1989, c. 77, s. 49; 1993, c. 16, s. 167; 1995, c. 49, s. 111; 1996, c. 39, s. 119; 1997, c. 3, s. 71; 1998, c. 16, s. 251; 2000, c. 5, s. 293.