I-3 - Taxation Act

Section 851.22.1 Disposition versions

2023-09-26

851.22.1. In this Title,

“base year” of a taxpayer means the taxpayer’s taxation year that precedes the taxpayer’s transition year;

“excluded property” of a taxpayer for a taxation year means property, held in the year by the taxpayer, that is

(a)  a share of the capital stock of a corporation if, at any time in the year, the taxpayer has a significant interest in the corporation;

(b)  a property that is, at all times in the year at which the taxpayer held the property, a prescribed payment card corporation share of the taxpayer;

(c)  if the taxpayer is an investment dealer, a property that is, at all times in the year at which the taxpayer held the property, a prescribed securities exchange investment of the taxpayer;

(d)  a share of the capital stock of a corporation if

i.  control of the corporation is, at any time (in this paragraph referred to as the “acquisition of control time”) that is in the 24-month period that begins immediately after the end of the year, acquired by

(1)  the taxpayer,

(2)  one or more persons related to the taxpayer (otherwise than by reason of a right referred to in paragraph b of section 20), or

(3)  the taxpayer and one or more persons described in subparagraph 2; and

ii.  the taxpayer elects, in a document filed with the Minister on or before the taxpayer’s filing-due date for the taxpayer’s taxation year that includes the acquisition of control time, to have subparagraph i apply; or

(e)  a prescribed property;

“fair value property” of a taxpayer for a taxation year means a property, held at any time in the year by the taxpayer, that is–or it is reasonable to expect would, if the taxpayer held the property at the end of the year, be–valued (otherwise than solely because its fair value was less than its cost to the taxpayer or, if the property is a specified debt obligation, because of a default of the debtor) in accordance with generally accepted accounting principles, at its fair value (determined in accordance with those principles) in the taxpayer’s balance sheet as at the end of the year;

“financial institution” at a particular time means, subject to the second paragraph,

(a)  a corporation that is, at that time,

i.  a corporation referred to in any of paragraphs a to e.1 of the definition of “restricted financial institution” in section 1,

ii.  an investment dealer, or

iii.  a corporation controlled by one or more persons or partnerships each of which is a financial institution at that time, other than a corporation the control of which was acquired by reason of the default of a debtor where it is reasonable to consider that control is being retained solely for the purpose of minimizing any losses in respect of the debtor’s default; and

(b)  a trust or partnership more than 50% of the fair market value of all interests in which are held at that time by one or more financial institutions;

“investment dealer” at a particular time means a corporation that is, at that time, a registered securities dealer;

“mark-to-market property” of a taxpayer for a taxation year means property (other than an excluded property) held in the year by the taxpayer that is

(a)  a share;

(b)  where the taxpayer is not an investment dealer, a specified debt obligation that is a fair value property of the taxpayer for the year;

(c)  where the taxpayer is an investment dealer, a specified debt obligation; or

(d)  a tracking property of the taxpayer that is a fair value property of the taxpayer for the year;

“specified debt obligation” of a taxpayer means the interest held by the taxpayer in a loan, bond, debenture, note, hypothecary claim, mortgage, agreement of sale or any other similar indebtedness, or a debt obligation, where the taxpayer purchased the interest, other than an interest in

(a)  an income bond, an income debenture, a small business bond, a development bond or a prescribed property; or

(b)  an instrument issued by or made with a person to whom the taxpayer is related or with whom the taxpayer does not otherwise deal at arm’s length, or in which the taxpayer has a significant interest;

“tracking property” of a taxpayer means a property of the taxpayer the fair market value of which is determined primarily by reference to one or more criteria in respect of a property (in this definition referred to as a “tracked property”) that, if owned by the taxpayer, would be a mark-to-market property of the taxpayer, which criteria are

(a)  the fair market value of the tracked property;

(b)  the profits or gains from the disposition of the tracked property;

(c)  the revenue, income or cash flow from the tracked property; or

(d)  any other similar criteria in respect of the tracked property;

“transition amount” of a taxpayer for the taxpayer’s transition year is the positive or negative amount determined by the formula

A - B;

“transition property” of a taxpayer means a property that

(a)  was a specified debt obligation held by the taxpayer at the end of the taxpayer’s base year;

(b)  was not a mark-to-market property of the taxpayer for the taxpayer’s base year, but would have been a mark-to-market property of the taxpayer for the taxpayer’s base year if the property had been carried at the property’s fair market value in the taxpayer’s balance sheet as at the end of each taxation year of the taxpayer that ends after the taxpayer last acquired the property (otherwise than by reason of a reacquisition under section 851.22.15) and before the commencement of the taxpayer’s transition year; and

(c)  was a mark-to-market property of the taxpayer for the transition year of the taxpayer;

“transition year” of a taxpayer means the taxpayer’s first taxation year that begins after 31 December 2022.

“Financial institution”, as defined in the first paragraph, at a particular time does not include

(a)  a corporation that is, at that time, an investment corporation, a mortgage investment corporation, a mutual fund corporation, or a deposit insurance corporation within the meaning of section 804;

(b)  a trust that is a mutual fund trust at that time; or

(c)  a prescribed person or partnership.

In the formula in the definition of “transition amount” in the first paragraph,

(a)  A is the aggregate of all amounts each of which is the fair market value, at the end of the taxpayer’s base year, of a transition property of the taxpayer; and

(b)  B is the aggregate of all amounts each of which is the cost amount to the taxpayer, at the end of the taxpayer’s base year, of a transition property of the taxpayer.

1996, c. 39, s. 235; 1997, c. 3, s. 71; 2001, c. 7, s. 117; 2001, c. 53, s. 174; 2005, c. 1, s. 197; 2010, c. 25, s. 95; 2023, c. 19, s. 85.

2010-10-27

851.22.1. In this Title,

“base year” of a taxpayer means the taxpayer’s taxation year that precedes the taxpayer’s transition year;

“excluded property” of a taxpayer for a taxation year means property, held in the year by the taxpayer, that is

(a)  a share of the capital stock of a corporation if, at any time in the year, the taxpayer has a significant interest in the corporation;

(b)  a property that is, at all times in the year at which the taxpayer held the property, a prescribed payment card corporation share of the taxpayer;

(c)  if the taxpayer is an investment dealer, a property that is, at all times in the year at which the taxpayer held the property, a prescribed securities exchange investment of the taxpayer;

(d)  a share of the capital stock of a corporation if

i.  control of the corporation is, at any time (in this paragraph referred to as the “acquisition of control time”) that is in the 24-month period that begins immediately after the end of the year, acquired by

(1)  the taxpayer,

(2)  one or more persons related to the taxpayer (otherwise than by reason of a right referred to in paragraph b of section 20), or

(3)  the taxpayer and one or more persons described in subparagraph 2; and

ii.  the taxpayer elects, in a document filed with the Minister on or before the taxpayer’s filing-due date for the taxpayer’s taxation year that includes the acquisition of control time, to have subparagraph i apply; or

(e)  a prescribed property;

“fair value property” of a taxpayer for a taxation year means a property, held at any time in the year by the taxpayer, that is–or it is reasonable to expect would, if the taxpayer held the property at the end of the year, be–valued (otherwise than solely because its fair value was less than its cost to the taxpayer or, if the property is a specified debt obligation, because of a default of the debtor) in accordance with generally accepted accounting principles, at its fair value (determined in accordance with those principles) in the taxpayer’s balance sheet as at the end of the year;

“financial institution” at a particular time means, subject to the second paragraph,

(a)  a corporation that is, at that time,

i.  a corporation referred to in any of paragraphs a to e.1 of the definition of “restricted financial institution” in section 1,

ii.  an investment dealer, or

iii.  a corporation controlled by one or more persons or partnerships each of which is a financial institution at that time, other than a corporation the control of which was acquired by reason of the default of a debtor where it is reasonable to consider that control is being retained solely for the purpose of minimizing any losses in respect of the debtor’s default; and

(b)  a trust or partnership more than 50% of the fair market value of all interests in which are held at that time by one or more financial institutions;

“investment dealer” at a particular time means a corporation that is, at that time, a registered securities dealer;

“mark-to-market property” of a taxpayer for a taxation year means property (other than an excluded property) held in the year by the taxpayer that is

(a)  a share;

(b)  where the taxpayer is not an investment dealer, a specified debt obligation that is a fair value property of the taxpayer for the year;

(c)  where the taxpayer is an investment dealer, a specified debt obligation; or

(d)  a tracking property of the taxpayer that is a fair value property of the taxpayer for the year;

“specified debt obligation” of a taxpayer means the interest held by the taxpayer in a loan, bond, debenture, note, hypothecary claim, mortgage, agreement of sale or any other similar indebtedness, or a debt obligation, where the taxpayer purchased the interest, other than an interest in

(a)  an income bond, an income debenture, a small business bond, a development bond or a prescribed property; or

(b)  an instrument issued by or made with a person to whom the taxpayer is related or with whom the taxpayer does not otherwise deal at arm’s length, or in which the taxpayer has a significant interest;

“tracking property” of a taxpayer means a property of the taxpayer the fair market value of which is determined primarily by reference to one or more criteria in respect of a property (in this definition referred to as a “tracked property”) that, if owned by the taxpayer, would be a mark-to-market property of the taxpayer, which criteria are

(a)  the fair market value of the tracked property;

(b)  the profits or gains from the disposition of the tracked property;

(c)  the revenue, income or cash flow from the tracked property; or

(d)  any other similar criteria in respect of the tracked property;

“transition amount” of a taxpayer for the taxpayer’s transition year is the positive or negative amount determined by the formula

A - B;

“transition property” of a taxpayer means a property that

(a)  was a specified debt obligation held by the taxpayer at the end of the taxpayer’s base year;

(b)  was not a mark-to-market property of the taxpayer for the taxpayer’s base year, but would have been a mark-to-market property of the taxpayer for the taxpayer’s base year if the property had been carried at the property’s fair market value in the taxpayer’s balance sheet as at the end of each taxation year of the taxpayer that ends after the taxpayer last acquired the property (otherwise than by reason of a reacquisition under section 851.22.15) and before the commencement of the taxpayer’s transition year; and

(c)  was a mark-to-market property of the taxpayer for the transition year of the taxpayer;

“transition year” of a taxpayer means the taxpayer’s first taxation year that begins after 30 September 2006.

“Financial institution”, as defined in the first paragraph, at a particular time does not include

(a)  a corporation that is, at that time, an investment corporation, a mortgage investment corporation, a mutual fund corporation, or a deposit insurance corporation within the meaning of section 804;

(b)  a trust that is a mutual fund trust at that time; or

(c)  a prescribed person or partnership.

In the formula in the definition of “transition amount” in the first paragraph,

(a)  A is the aggregate of all amounts each of which is the fair market value, at the end of the taxpayer’s base year, of a transition property of the taxpayer; and

(b)  B is the aggregate of all amounts each of which is the cost amount to the taxpayer, at the end of the taxpayer’s base year, of a transition property of the taxpayer.

1996, c. 39, s. 235; 1997, c. 3, s. 71; 2001, c. 7, s. 117; 2001, c. 53, s. 174; 2005, c. 1, s. 197; 2010, c. 25, s. 95.

2006-03-01

851.22.1. In this Title,

“financial institution” at a particular time means, subject to the third paragraph,

(a)  a corporation that is, at that time,

i.  a corporation referred to in any of paragraphs a to e.1 of the definition of “restricted financial institution” in section 1,

ii.  an investment dealer, or

iii.  a corporation controlled by one or more persons or partnerships each of which is a financial institution at that time, other than a corporation the control of which was acquired by reason of the default of a debtor where it is reasonable to consider that control is being retained solely for the purpose of minimizing any losses in respect of the debtor’s default; and

(b)  a trust or partnership more than 50% of the fair market value of all interests in which are held at that time by one or more financial institutions;

“investment dealer” at a particular time means a corporation that is, at that time, a registered securities dealer;

“mark-to-market property” of a taxpayer for a taxation year means any of the following properties held by the taxpayer in the year that is neither a share of a corporation in which the taxpayer has a significant interest at any time in the year nor a prescribed property:

(a)  a share;

(b)  where the taxpayer is not an investment dealer, subject to the second paragraph, a specified debt obligation that

i.  was carried at fair market value in the taxpayer’s financial statements for the year, where the taxpayer held the obligation at the end of the year, and for each preceding taxation year that ended after the taxpayer acquired the obligation, or

ii.  was acquired and disposed of in the year, where it is reasonable to expect that the obligation would have been carried in the taxpayer’s financial statements for the year at fair market value if the taxpayer had not disposed of the obligation; and

(c)  where the taxpayer is an investment dealer, a specified debt obligation;

“specified debt obligation” of a taxpayer means the interest held by the taxpayer in a loan, bond, debenture, note, hypothecary claim, mortgage, agreement of sale or any other similar indebtedness, or a debt obligation, where the taxpayer purchased the interest, other than an interest in

(a)  an income bond, an income debenture, a small business bond, a development bond or a prescribed property; or

(b)  an instrument issued by or made with a person to whom the taxpayer is related or with whom the taxpayer does not otherwise deal at arm’s length, or in which the taxpayer has a significant interest.

A specified debt obligation referred to in paragraph b of the definition of “mark-to-market property” in the first paragraph does not include a specified debt obligation of the taxpayer that was, or would have been, carried at fair market value solely because its fair market value was less than its cost to the taxpayer, or because of a default of the debtor.

“Financial institution”, as defined in the first paragraph, at a particular time does not include

(a)  a corporation that is, at that time, an investment corporation, a mortgage investment corporation, a mutual fund corporation, or a deposit insurance corporation within the meaning of section 804;

(b)  a trust that is a mutual fund trust at that time; or

(c)  a prescribed person or partnership.

1996, c. 39, s. 235; 1997, c. 3, s. 71; 2001, c. 7, s. 117; 2001, c. 53, s. 174; 2005, c. 1, s. 197.