I-3 - Taxation Act

Section 726.17 Disposition versions

2006-03-01

726.17. Notwithstanding any other provision of this Act, where it may reasonably be considered that one of the main reasons for an individual acquiring, holding or having an interest in a partnership or trust, other than an interest in a personal trust, or a share of an investment corporation, mortgage investment corporation or mutual fund corporation, or that one of the main reasons for the existence of any terms, conditions, rights or other attributes of the interest or share, as the case may be, is to enable the individual to receive or have allocated to him a percentage of any capital gain or taxable capital gain of the partnership, trust or corporation that is larger than the percentage of the income of the partnership, trust or corporation to which the individual is entitled, the following rules apply:

(a)  no amount may be deducted under this Title by the individual in respect of any gain contemplated in this section allocated or distributed to him after 21 November 1985; and

(b)  where the individual is a trust, any gain contemplated in this section allocated or distributed to it after 21 November 1985 shall not be included in computing its eligible taxable capital gain within the meaning of section 668.4.

1987, c. 67, s. 142; 1990, c. 59, s. 269; 1996, c. 39, s. 273; 1997, c. 3, s. 32.