I-3 - Taxation Act

Section 690.3 Disposition versions

2006-03-01

690.3. Where a trust governed by a retirement compensation arrangement has distributed, at a particular time, property owned by it to a taxpayer who was a beneficiary under the trust in satisfaction of all or any part of the taxpayer’s interest in the trust, the following rules apply:

(a)  the trust is deemed to have disposed of the property for proceeds of disposition equal to its fair market value at the particular time;

(b)  the trust is deemed to have paid to the taxpayer as a distribution an amount equal to the proceeds determined in respect of the property under paragraph a;

(c)  the taxpayer is deemed to have acquired the property at a cost equal to the proceeds determined in respect of the property under paragraph a;

(d)  the taxpayer is deemed to have disposed of his interest in the trust or part thereof, as the case may be, for proceeds of disposition equal to the adjusted cost base to him of that interest or part thereof, as the case may be, immediately before the particular time;

(e)  for the purposes of sections 93 to 104, 130 and 130.1 and the regulations made under paragraph a of section 130, where the property distributed was depreciable property of a prescribed class of the trust and the amount that was the capital cost to the trust of that property exceeds the cost at which the taxpayer is deemed by paragraph c to have acquired the property

i.  the capital cost of the property to the taxpayer is deemed to be the capital cost of the property to the trust;

ii.  the excess is deemed to have been allowed to the taxpayer as depreciation in respect of the property for taxation years preceding the acquisition by him of the property.

1989, c. 77, s. 73; 1990, c. 59, s. 246; 2001, c. 7, s. 80.