I-4 - Act respecting the application of the Taxation Act

Section 69 Disposition versions

1978-12-22

69. Where any capital property contemplated in section 67 and owned by a taxpayer, hereinafter called the original owner, on 18 June 1971 devolves to any subsequent owner with whom the taxpayer does not deal at arm’s length by winding-up, death or one or more transactions, including a gift, between persons not dealing at arm’s length, the following rules apply in computing, at any particular time after 1971, the adjusted cost base of the capital property to the subsequent owner if the original owner has not elected as contemplated in section 72 in respect of such capital property:

(a)  such capital property is deemed to have been owned by the subsequent owner on 18 June 1971 and thereafter without interruption until the particular time;

(b)  for the purposes of this chapter, the actual cost of the capital property or, in the case of an obligation, its amortized cost on 1 January 1972, is deemed to be the same for the subsequent owner as for the original owner; and

(c)  at the time when the capital property became vested in the subsequent owner after 1971, the latter shall add to the cost to him of the capital property, as determined under section 68, the amount by which the aggregate of amounts referred to in paragraph a, b, c or c.1 of section 70 exceeds the aggregate of those referred to in paragraph d or e of the said section or, if they are less, he shall deduct the difference thereof.

For the purposes of this section, an amalgamation, within the meaning of section 544 of the Taxation Act (chapter I-3), is deemed to be a transaction between persons not dealing at arm’s length.

1972, c. 24, s. 72; 1973, c. 17, s. 151; 1975, c. 22, s. 272; 1978, c. 26, s. 223.

1977-12-31

69. Where any capital property contemplated in section 67 and owned by a taxpayer, hereinafter called the original owner, on 18 June 1971 devolves to any subsequent owner with whom the taxpayer does not deal at arm’s length by winding-up, death or one or more transactions, including a gift, between persons not dealing at arm’s length, the following rules apply in computing, at any particular time after 1971, the adjusted cost base of the capital property to the subsequent owner if the original owner has not elected as contemplated in section 72 in respect of such capital property:

(a)  such capital property is deemed to have been owned by the subsequent owner on 18 June 1971 and thereafter without interruption until the particular time;

(b)  for the purposes of this chapter, the actual cost of the capital property or, in the case of an obligation, its amortized cost on 1 January 1972, is deemed to be the same for the subsequent owner as for the original owner; and

(c)  at the time when the capital property has devolved, after 1971, to the subsequent owner, he shall add to the cost for him, of the capital property as determined under section 68, the amount by which the aggregate of the amounts contemplated in paragraph a, b or c of section 70 exceeds the aggregate of those contemplated in paragraph d or e of the said section or, if they are less, he shall deduct the difference.

For the purposes of this section, an amalgamation, within the meaning of section 544 of the Taxation Act is deemed to be a transaction between persons not dealing at arm’s length.

1972, c. 24, s. 72; 1973, c. 17, s. 151; 1975, c. 22, s. 272.