I-3 - Taxation Act

Section 217.10 Disposition versions

2015-10-26

217.10. (Repealed).

1997, c. 31, s. 27; 2015, c. 24, s. 43.

2006-03-01

217.10. In this division,

“income on 31 December 1995” in respect of a business carried on by a taxpayer means the amount determined by the formula

(A − B − C + D) × E;

“qualifying fiscal period” of a business of a taxpayer means

(a)  where at the end of the year 1994 the taxpayer carried on the business and no fiscal period of the business ended at that time, a fiscal period of the business that begins after the beginning of the taxpayer’s taxation year that includes the end of the year 1995 and ends

i.  at the end of the year 1995 because of subparagraph b of the second paragraph of section 7 or because of the said subparagraph b and of section 190, or

ii.  immediately before the end of the year 1995 because of subparagraph b of the second paragraph of section 7 and of the second paragraph of section 601;

(b)  a fiscal period of the business that ends at the end of the year 1995 because of subparagraph b of the second paragraph of section 7 where

i.  the taxpayer is an individual who carries on the business as a member of a partnership at the end of the year 1995,

ii.  the individual acquired the individual’s interest in the partnership in the year 1995 from a professional corporation,

iii.  the professional corporation carried on the business at the end of the year 1994 as a member of the partnership and does not have a share of the income or loss of the partnership for the fiscal period,

iv.  the individual is a practising member of the professional order under the authority of which the professional corporation practised the profession, and

v.  the individual was a specified shareholder of the professional corporation immediately before acquiring the interest in the partnership; and

(c)  where the taxpayer is a professional corporation that has a taxation year that ends at the end of the year 1995 because of subparagraph b of the second paragraph of section 7, and at the end of the year 1994 the business was carried on by the professional corporation as a member of a partnership, or by an individual referred to in the second paragraph, a fiscal period of the business that ends in the taxation year;

“specified percentage”, in relation to a taxpayer, for a particular taxation year in respect of a business means

(a)  where the first taxation year in which a qualifying fiscal period of the business ends is the taxation year 1995, or any of sections 217.5 to 217.7 applies in respect of the business, and the particular taxation year ends in

i.  the year 1995, 95%,

ii.  the year 1996, 85%,

iii.  the year 1997, 75%,

iv.  the year 1998, 65%,

v.  the year 1999, 55%,

vi.  the year 2000, 45%,

vii.  the year 2001, 35%,

viii.  the year 2002, 25%,

ix.  the year 2003, 15%, and

x.  any year that is after the year 2003, 0%;

(b)  where the first taxation year in which a qualifying fiscal period of a business of the taxpayer ends is the taxation year 1996 and the particular taxation year ends in

i.  the year 1996, 95%,

ii.  the year 1997, 85%,

iii.  the year 1998, 75%,

iv.  the year 1999, 65%,

v.  the year 2000, 55%,

vi.  the year 2001, 45%,

vii.  the year 2002, 35%,

viii.  the year 2003, 25%,

ix.  the year 2004, 15%, and

x.  any year that is after the year 2004, 0%.

An individual to which paragraph c of the definition of “qualifying fiscal period” in the first paragraph refers means an individual

(a)  who transferred an interest in the partnership to the professional corporation before the end of the year 1995;

(b)  who is a practising member of the professional order under the authority of which the professional corporation practises the profession;

(c)  who was a specified shareholder of the professional corporation immediately after the transfer; and

(d)  who does not have a share of the income or loss of the partnership for the first fiscal period of the partnership that ends in 1995.

For the purposes of the formula in the definition of “income on 31 December 1995” in the first paragraph,

(a)  A is the aggregate of all amounts each of which is the taxpayer’s income from the business for a qualifying fiscal period;

(b)  B is the aggregate of all amounts each of which is the taxpayer’s loss from the business for a qualifying fiscal period;

(c)  C is the lesser of

i.  the aggregate of all amounts each of which is an amount included in computing the taxpayer’s income or loss from the business for a qualifying fiscal period and that is deemed to be a taxable capital gain for the purposes of Title VI.5 of Book IV, and

ii.  the aggregate of the maximum amounts deductible under the said Title VI.5 in computing the taxpayer’s taxable income for the taxation year in which the qualifying fiscal period ends;

(d)  D is

i.  where the taxpayer is a professional corporation, the total salary or wages deductible in computing an amount determined under paragraph a or b that is payable by the professional corporation to an individual

(1)  who is a practising member of the professional order under the authority of which the professional corporation practised the profession, and

(2)  who is a specified shareholder of the professional corporation, and

ii.  in any other case, nil; and

(e)  E is,

i.  where the taxpayer is a professional corporation a taxation year of which ended at the end of the year 1995 because of subparagraph b of the second paragraph of section 7, the amount determined by the formula

(F − G) / F, and

ii.  in any other case, 1.

For the purposes of the formula in subparagraph i of subparagraph e of the third paragraph,

(a)  F is the number of days in all qualifying fiscal periods of the business; and

(b)  G is the number of days in the taxation year.

1997, c. 31, s. 27.