I-3 - Taxation Act

Section 577.7.1 Disposition versions

2017-02-08

577.7.1. For the purposes of this chapter, where a taxpayer is an eligible Canadian bank and an eligible bank affiliate of the taxpayer is owed, at any time in a taxation year of the affiliate (in this section referred to as the “particular year”) or its immediately preceding taxation year, an upstream deposit, the following rules apply:

(a)  the affiliate is deemed to make a loan to the taxpayer immediately before the end of the particular year equal to the loan that it is deemed to make to the taxpayer, at that time, under paragraph a of subsection 8.1 of section 90 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)); and

(b)  the taxpayer is deemed to repay immediately before the end of the particular year—in an amount that the taxpayer is deemed to pay, at that time, under paragraph b of subsection 8.1 of section 90 of the Income Tax Act and in the order in which they arose—loans made by the affiliate under paragraph a in a prior taxation year and not previously repaid, and the repayment is deemed to not be part of a series of loans or other transactions and repayments.

2017, c. 1, s. 141.