I-3 - Taxation Act

Section 460 Disposition versions

2019-06-19

460. If, because of section 459, this section applies to an individual in respect of a property transferred by the individual to the child of the individual, the following rules apply:

(a)  in cases where paragraph b and section 461 do not apply, the individual is deemed to have disposed of the property, at the time of the transfer, for proceeds equal to proceeds of disposition otherwise determined;

(b)  subject to paragraph c, if the proceeds of disposition of the property otherwise determined exceed the greater of the following amounts, the individual is deemed to have disposed of the property at the time of the transfer for the greater of those amounts:

i.  the fair market value of the property immediately before the time of the transfer, and

ii.  if, immediately before the transfer, the property was

(1)  a depreciable property of a prescribed class, the lesser of the capital cost of the property and the amount, determined immediately before the time of the disposition of the property, that is equal to that proportion of the undepreciated capital cost of the property of that class to the individual that the capital cost of the property to the individual is of the capital cost to the individual of all the property of that class that had not, at or before that time, been disposed of,

(2)  land, a share of the capital stock of a family farm or fishing corporation of the individual or an interest in a family farm or fishing partnership of the individual, the adjusted cost base of the property to the individual immediately before the time of the transfer, or

(3)  (subparagraph repealed);

(c)  if, immediately before the transfer, the property was an interest in a family farm or fishing partnership of the individual and the individual receives no consideration in respect of the transfer of the property and makes a valid election under paragraph c of subsection 4.1 of section 73 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), in the individual’s fiscal return filed under Part I of that Act for the taxation year that includes the time of the transfer, to have that paragraph c apply in respect of the transfer of the property, the individual is deemed, except for the purposes of section 632, not to have disposed of the property at the time of the transfer; and

(d)  section 422 does not apply to the individual in respect of the property.

1973, c. 17, s. 52; 1979, c. 18, s. 37; 1990, c. 59, s. 173; 1994, c. 22, s. 183; 1997, c. 3, s. 71; 2005, c. 1, s. 108; 2007, c. 12, s. 63; 2017, c. 29, s. 70; 2019, c. 14, s. 130.

2017-12-07

460. If, because of section 459, this section applies to an individual in respect of a property transferred by the individual to the child of the individual, the following rules apply:

(a)  in cases where paragraph b and section 461 do not apply, the individual is deemed to have disposed of the property, at the time of the transfer, for proceeds equal to proceeds of disposition otherwise determined;

(b)  subject to paragraph c, if the proceeds of disposition of the property otherwise determined exceed the greater of the following amounts, the individual is deemed to have disposed of the property at the time of the transfer for the greater of those amounts:

i.  the fair market value of the property immediately before the time of the transfer, and

ii.  if, immediately before the transfer, the property was

(1)  a depreciable property of a prescribed class, the lesser of the capital cost of the property and the amount, determined immediately before the time of the disposition of the property, that is equal to that proportion of the undepreciated capital cost of the property of that class to the individual that the capital cost of the property to the individual is of the capital cost to the individual of all the property of that class that had not, at or before that time, been disposed of,

(2)  land, a share of the capital stock of a family farm or fishing corporation of the individual or an interest in a family farm or fishing partnership of the individual, the adjusted cost base of the property to the individual immediately before the time of the transfer, or

(3)  an incorporeal capital property in respect of a business, the amount obtained by multiplying 4/3 by that proportion of the individual’s eligible incorporeal capital amount in respect of the business that the fair market value of the property immediately before the transfer was of the fair market value at that time of the aggregate of the individual’s incorporeal capital property in respect of the business;

(c)  if, immediately before the transfer, the property was an interest in a family farm or fishing partnership of the individual and the individual receives no consideration in respect of the transfer of the property and makes a valid election under paragraph c of subsection 4.1 of section 73 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)), in the individual’s fiscal return filed under Part I of that Act for the taxation year that includes the time of the transfer, to have that paragraph c apply in respect of the transfer of the property, the individual is deemed, except for the purposes of section 632, not to have disposed of the property at the time of the transfer; and

(d)  section 422 does not apply to the individual in respect of the property.

1973, c. 17, s. 52; 1979, c. 18, s. 37; 1990, c. 59, s. 173; 1994, c. 22, s. 183; 1997, c. 3, s. 71; 2005, c. 1, s. 108; 2007, c. 12, s. 63; 2017, c. 29, s. 70.

2007-11-07

460. If, because of section 459, this section applies to an individual in respect of a property transferred by the individual to the child of the individual, the following rules apply:

(a)  in cases where paragraph b and section 461 do not apply, the individual is deemed to have disposed of the property, at the time of the transfer, for proceeds equal to proceeds of disposition otherwise determined;

(b)  subject to paragraph c, if the proceeds of disposition of the property otherwise determined exceed the greater of the following amounts, the individual is deemed to have disposed of the property at the time of the transfer for the greater of those amounts:

i.  the fair market value of the property immediately before the time of the transfer, and

ii.  if, immediately before the transfer, the property was

(1)  a depreciable property of a prescribed class, the lesser of the capital cost of the property and the amount, determined immediately before the time of the disposition of the property, that is equal to that proportion of the undepreciated capital cost of the property of that class to the individual that the capital cost of the property to the individual is of the capital cost to the individual of all the property of that class that had not, at or before that time, been disposed of,

(2)  land, a share of the capital stock of a family farm corporation of the individual, a share of the capital stock of a family fishing corporation of the individual, an interest in a family farm partnership of the individual or an interest in a family fishing partnership of the individual, the adjusted cost base of the property to the individual immediately before the time of the transfer, or

(3)  an incorporeal capital property in respect of a business, the amount obtained by multiplying 4/3 by that proportion of the individual’s eligible incorporeal capital amount in respect of the business that the fair market value of the property immediately before the transfer was of the fair market value at that time of the aggregate of the individual’s incorporeal capital property in respect of the business;

(c)  if, immediately before the transfer, the property was an interest in a family farm partnership of the individual or an interest in a family fishing partnership of the individual and the individual receives no consideration in respect of the transfer of the property and makes a valid election under paragraph c of subsection 4.1 of section 73 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement), in the individual’s fiscal return filed under Part I of that Act for the taxation year that includes the time of the transfer, to have that paragraph c apply in respect of the transfer of the property, the individual is deemed, except for the purposes of section 632, not to have disposed of the property at the time of the transfer; and

(d)  section 422 does not apply to the individual in respect of the property.

1973, c. 17, s. 52; 1979, c. 18, s. 37; 1990, c. 59, s. 173; 1994, c. 22, s. 183; 1997, c. 3, s. 71; 2005, c. 1, s. 108; 2007, c. 12, s. 63.

2006-03-01

460. Where the proceeds of disposition of property contemplated by section 459 are greater than either of the following two amounts, they are deemed equal to the greater of these amounts:

(a)  the fair market value of the property immediately before the transfer; and

(b)  in the case of land, a share of the capital stock of a family farm corporation of the individual or an interest in a family farm partnership of the individual, the adjusted cost base of the property to the individual immediately before the transfer; in the case of incorporeal capital property in respect of a business, 4/3 of that proportion of the individual’s eligible incorporeal capital amount in respect of that business that the fair market value of the property transferred, immediately before the time of the transfer, was of the fair market value at that time of the aggregate of the individual’s incorporeal capital property in respect of the business; in the case of depreciable property of a prescribed class, that proportion of the undepreciated capital cost to the individual immediately before the transfer of the aggregate of his depreciable property of that class that the fair market value of the property transferred, immediately before the time of the transfer, was of the fair market value of the aggregate of all his depreciable property of that class at that time.

1973, c. 17, s. 52; 1979, c. 18, s. 37; 1990, c. 59, s. 173; 1994, c. 22, s. 183; 1997, c. 3, s. 71; 2005, c. 1, s. 108.