I-3 - Taxation Act

Section 832.8 Disposition versions

2006-03-01

832.8. Where, at any time in a taxation year, the beneficial ownership of property is acquired or reacquired by the insurer in consequence of another person’s failure to pay all or any part of an amount, in this section referred to as the “insurer’s claim”, owing to the insurer at that time in respect of a bond, debenture, hypothecary claim, mortgage, agreement of sale or any other form of indebtedness owned by the insurer, the following rules apply to the insurer:

(a)  sections 484.7 to 484.13 do not apply in respect of the acquisition or reacquisition;

(b)  the insurer is deemed to have acquired or reacquired, as the case may be, the property at an amount equal to its fair market value, immediately before that time;

(c)  the insurer is deemed to have disposed at that time of the portion of the indebtedness represented by the insurer’s claim for proceeds of disposition equal to the fair market value referred to in paragraph b and, immediately after that time, to have reacquired that portion of the indebtedness at a cost of nil;

(d)  the acquisition or reacquisition is deemed to have no effect on the form of the indebtedness;

(e)  no amount is deductible in respect of the insurer’s claim by reason of sections 140 and 140.1 in computing the insurer’s income for the taxation year or a subsequent taxation year.

1990, c. 59, s. 314; 1996, c. 39, s. 229; 2005, c. 1, s. 195.