I-3 - Taxation Act

Section 167.1.1 Disposition versions

2019-06-19

167.1.1. For the purposes of section 167, the amount determined by the following formula is deemed to be interest that accrued on a disposed debt obligation—that is, at any time, described in section 92.5R3 of the Regulation respecting the Taxation Act (chapter I-3, r. 1) because of subparagraph d of the first paragraph of that section—that the transferee has become entitled to receive for a period commencing before the time of the disposition (in this section referred to as the “particular time”) and ending at the particular time and that is not payable until after the particular time:

A – B.

In the formula in the first paragraph,

(a)  A is the price for which the debt obligation was disposed of at the particular time; and

(b)  B is the amount by which the price (converted to Canadian currency using the exchange rate prevailing at the particular time, if the debt obligation is denominated in a foreign currency) for which the debt obligation was issued exceeds the portion of the principal amount of the debt obligation (converted to Canadian currency using the exchange rate prevailing at the particular time, if the debt obligation is denominated in a foreign currency) that was repaid by the issuer on or before the particular time.

2019, c. 14, s. 85.