I-3 - Taxation Act

Section 462.15 Disposition versions

2006-03-01

462.15. Notwithstanding any other provision of this Act, sections 462.1, 462.2, 462.5 and 462.6 do not apply to any income, gain or loss derived in a particular taxation year from transferred or loaned property, as the case may be, or from property substituted therefor if

(a)  at the time of the transfer the fair market value of the transferred property did not exceed the fair market value of the property received by the transferor as consideration for the transferred property;

(b)  where the consideration received by the transferor included indebtedness or in the case of a loan,

i.  interest was charged on the indebtedness or loan, as the case may be, at a rate equal to or greater than the lesser of the prescribed rate that was in effect at the time the indebtedness was incurred or the loan was made, and the rate that would, having regard to all the circumstances, have been agreed upon, at the time the indebtedness was incurred or the loan was made, between parties dealing with each other at arm’s length;

ii.  the amount of interest that was payable in respect of the particular year in respect of the indebtedness or loan was paid not later than 30 days after the end of the particular year;

iii.  the amount of interest that was payable in respect of each taxation year preceding the particular year in respect of the indebtedness or loan was paid not later than 30 days after the end of each such taxation year;

(c)  where the property was transferred to or for the benefit of the transferor’s spouse, the second paragraph of section 454 applies to the transfer.

1987, c. 67, s. 112; 1997, c. 85, s. 79; 2003, c. 2, s. 126.