I-3 - Taxation Act

Section 295.1 Disposition versions

2017-02-08

295.1. Where, at a particular time, an option granted by a trust and referred to in subparagraph b.1 of the second paragraph of section 294 expires, and the option is held at that time by a person who does not deal at arm’s length with the trust or was granted to a person who did not deal at arm’s length with the trust at the time that the option was granted, the following rules apply:

(a)  the trust is deemed to have disposed of capital property at the particular time for proceeds of disposition equal to the amount received by it in consideration for the granting of the option; and

(b)  the adjusted cost base to the trust of that capital property immediately before the particular time is deemed to be nil.

1993, c. 16, s. 118; 2017, c. 1, s. 115.

2006-03-01

295.1. Where a trust grants an option to purchase units of the trust to be issued by the trust, the trust is deemed to have disposed of capital property and realized a gain equal to the amount it received as consideration for the granting of the option, at the time the option expires.

1993, c. 16, s. 118.