II, s. 581995, c. 21, s. 271998, c. 19, s. 1111999, c. 22, s. 212001, c. 17, s. 582007, c. 35, s. 212013, c. 34, s. 118, c. 40, s. 362016, c. 12, s. 23
80.01(1)In this section,commercial debt obligationcommercial debt obligationhas the meaning assigned by subsection 80(1); (créance commerciale)commercial obligationcommercial obligationhas the meaning assigned by subsection 80(1); (dette commerciale)debtordebtorhas the meaning assigned by subsection 80(1); (débiteur)distress preferred sharedistress preferred sharehas the meaning assigned by subsection 80(1); (action privilégiée de renflouement)forgiven amountforgiven amounthas the meaning assigned by subsection 80(1) except that, where an amount would be included in computing a person’s income under paragraph 6(1)(a) or subsection 15(1) as a consequence of the settlement of an obligation if the obligation were settled without any payment being made in satisfaction of its principal amount,forgiven amountin respect of that obligation has the meaning assigned by subsection 6(15.1) or 15(1.21), as the case may be; (montant remis)personpersonhas the meaning assigned by subsection 80(1); (personne)specified costspecified costat any time to a person of an obligation means,(a)where the obligation is capital property of the person at that time, the adjusted cost base at that time to the person of the obligation, and(b)in any other case, the cost amount to the person of the obligation. (coût déterminé)Marginal note:Application(2)For the purposes of this section,(a)paragraphs 80(2)(a), 80(2)(b), 80(2)(j), 80(2)(l) and 80(2)(n) apply; and(b)a person has a significant interest in a corporation at any time if the person owned at that time(i)shares of the capital stock of the corporation that would give the person 25% or more of the votes that could be cast under all circumstances at an annual meeting of shareholders of the corporation, or(ii)shares of the capital stock of the corporation having a fair market value of 25% or more of the fair market value of all the issued shares of the capital stock of the corporationand, for the purposes of this paragraph, a person shall be deemed to own at any time each share of the capital stock of a corporation that is owned, otherwise than because of this paragraph, at that time by another person with whom the person does not deal at arm’s length.Marginal note:Deemed settlement on amalgamation(3)Where a commercial obligation or another obligation (in this subsection referred to as the “indebtedness”) of a debtor that is a corporation to pay an amount to another corporation (in this subsection referred to as the “creditor”) is settled on an amalgamation of the debtor and the creditor, the indebtedness shall be deemed to have been settled immediately before the time that is immediately before the amalgamation by a payment made by the debtor and received by the creditor of an amount equal to the amount that would have been the creditor’s cost amount of the indebtedness at that time if(a)the definitioncost amountin subsection 248(1) were read without reference to paragraph (e) of that definition; and(b)that cost amount included amounts added in computing the creditor’s income in respect of the portion of the indebtedness representing unpaid interest, to the extent those amounts have not been deducted in computing the creditor’s income as bad debts in respect of that unpaid interest.Marginal note:Deemed settlement on winding-up(4)Where there is a winding-up of a subsidiary to which the rules in subsection 88(1) apply and(a)a debt or other obligation (in this subsection referred to as the “subsidiary’s obligation”) of the subsidiary to pay an amount to the parent, or(b)a debt or other obligation (in this subsection referred to as the “parent’s obligation”) of the parent to pay an amount to the subsidiaryis, as a consequence of the winding-up, settled at a particular time without any payment of an amount or by the payment of an amount that is less than the principal amount of the subsidiary’s obligation or the parent’s obligation, as the case may be,(c)where that payment is less than the amount that would have been the cost amount to the parent or subsidiary of the subsidiary’s obligation or the parent’s obligation immediately before the particular time if the definitioncost amountin subsection 248(1) were read without reference to paragraph (e) of that definition and the parent so elects in a prescribed form on or before the day on or before which the parent is required to file a return of income pursuant to section 150 for the taxation year that includes the particular time, the amount paid at that time in satisfaction of the principal amount of the subsidiary’s obligation or the parent’s obligation shall be deemed to be equal to the amount that would be the cost amount to the parent or the subsidiary, as the case may be, of the subsidiary’s obligation or the parent’s obligation immediately before the particular time if(i)the definitioncost amountin subsection 248(1) were read without reference to paragraph (e) of that definition, and(ii)that cost amount included amounts added in computing the parent’s income or the subsidiary’s income in respect of the portion of the indebtedness representing unpaid interest, to the extent that the parent or the subsidiary has not deducted any amounts as bad debts in respect of that unpaid interest, and(d)for the purposes of applying section 80 to the subsidiary’s obligation, where property is distributed at any time in circumstances to which paragraph 88(1)(a) or 88(1)(b) applies and the subsidiary’s obligation is settled as a consequence of the distribution, the subsidiary’s obligation shall be deemed to have been settled immediately before the time that is immediately before the time of the distribution and not at any later time.Marginal note:Deemed settlement on winding-up(5)Where there is a winding-up of a subsidiary to which the rules in subsection 88(1) apply and, as a consequence of the winding-up, a distress preferred share issued by the subsidiary and owned by the parent (or a distress preferred share issued by the parent and owned by the subsidiary) is settled at any time without any payment of an amount or by the payment of an amount that is less than the principal amount of the share,(a)where the payment was less than the adjusted cost base of the share to the parent or the subsidiary, as the case may be, immediately before that time, for the purposes of applying the provisions of this Act to the issuer of the share, the amount paid at that time in satisfaction of the principal amount of the share shall be deemed to be equal to its adjusted cost base to the parent or to the subsidiary, as the case may be; and(b)for the purposes of applying section 80 to the share, where property is distributed at any time in circumstances to which paragraph 88(1)(a) or 88(1)(b) applies and the share is settled as a consequence of the distribution, the share shall be deemed to have been settled immediately before the time that is immediately before the time of the distribution and not at any later time.Marginal note:Deemed settlement on SIFT trust wind-up event(5.1)If a trust that is a SIFT wind-up entity is the only beneficiary under another trust (in this subsection referred to as the “subsidiary trust”), and a capital property that is a debt or other obligation (in this subsection referred to as the “subsidiary trust’s obligation”) of the subsidiary trust to pay an amount to the SIFT wind-up entity is, as a consequence of a distribution from the subsidiary trust that is a SIFT trust wind-up event, settled at a particular time without any payment of an amount or by the payment of an amount that is less than the principal amount of the subsidiary trust’s obligation(a)paragraph (b) applies if(i)the payment is less than the amount that would have been the adjusted cost base to the SIFT wind-up entity of the subsidiary trust’s obligation immediately before the particular time, and(ii)the SIFT wind-up entity elects, in prescribed form on or before the SIFT wind-up entity’s filing-due date for the taxation year that includes the particular time, to have paragraph (b) apply;(b)if this paragraph applies, the amount paid at the particular time in satisfaction of the principal amount of the subsidiary trust’s obligation is deemed to be equal to the amount that would be the adjusted cost base to the SIFT wind-up entity of the subsidiary trust’s obligation immediately before the particular time if that adjusted cost base included amounts added in computing the SIFT wind-up entity’s income in respect of the portion of the indebtedness representing unpaid interest, to the extent that the SIFT wind-up entity has not deducted any amounts as bad debts in respect of that unpaid interest; and(c)for the purposes of applying section 80 to the subsidiary trust’s obligation, the subsidiary trust’s obligation is deemed to have been settled immediately before the time that is immediately before the distribution.Marginal note:Specified obligation in relation to debt parking(6)For the purpose of subsection (7), an obligation issued by a debtor is, at a particular time, a specified obligation of the debtor where(a)at any previous time (other than a time before the last time, if any, the obligation became a parked obligation before the particular time),(i)a person who owned the obligation(A)dealt at arm’s length with the debtor, and(B)where the debtor is a corporation, did not have a significant interest in the debtor, or(ii)the obligation was acquired by the holder of the obligation from another person who was, at the time of that acquisition, not related to the holder or related to the holder only because of paragraph 251(5)(b); or(b)the obligation is deemed by subsection 50(1) to be reacquired at the particular time.Marginal note:Parked obligation(7)For the purposes of this subsection and subsections (6), (8) and (10),(a)an obligation issued by a debtor is a “parked obligation” at any time where at that time(i)the obligation is a specified obligation of the debtor, and(ii)the holder of the obligation(A)does not deal at arm’s length with the debtor, or(B)where the debtor is a corporation and the holder acquired the obligation after July 12, 1994 (otherwise than pursuant to an agreement in writing entered into on or before July 12, 1994), has a significant interest in the debtor; and(b)an obligation that is, at any time, acquired or reacquired in circumstances to which subparagraph (6)(a)(ii) or paragraph (6)(b) applies shall, if the obligation is a parked obligation immediately after that time, be deemed to have become a parked obligation at that time.Marginal note:Deemed settlement after debt parking(8)Where at any particular time after February 21, 1994 a commercial debt obligation that was issued by a debtor becomes a parked obligation (otherwise than pursuant to an agreement in writing entered into before February 22, 1994) and the specified cost at the particular time to the holder of the obligation is less than 80% of the principal amount of the obligation, for the purpose of applying the provisions of this Act to the debtor(a)the obligation shall be deemed to have been settled at the particular time; and(b)the forgiven amount at the particular time in respect of the obligation shall be determined as if the debtor had paid an amount at the particular time in satisfaction of the principal amount of the obligation equal to that specified cost.Marginal note:Statute-barred debt(9)Where at any particular time after February 21, 1994 a commercial debt obligation issued by a debtor that is payable to a person (other than a person with whom the debtor is related at the particular time) becomes unenforceable in a court of competent jurisdiction because of a statutory limitation period and the obligation would, but for this subsection, not have been settled or extinguished at the particular time, for the purpose of applying the provisions of this Act to the debtor, the obligation shall be deemed to have been settled at the particular time.Marginal note:Subsequent payments in satisfaction of debt(10)Where a commercial debt obligation issued by a debtor is first deemed by subsection (8) or (9) to have been settled at a particular time, at a subsequent time a payment is made by the debtor of an amount in satisfaction of the principal amount of the obligation and it cannot reasonably be considered that one of the reasons the obligation became a parked obligation or became unenforceable, as the case may be, before the subsequent time was to have this subsection apply to the payment, in computing the debtor’s income for the taxation year (in this subsection referred to as the “subsequent year”) that includes the subsequent time from the source in connection with which the obligation was issued, there may be deducted the amount determined by the formula0.5(A - B) - CwhereAis the amount of the payment,Bis the amount, if any, by which(a)the principal amount of the obligationexceeds the total of(b)all amounts each of which is a forgiven amount at any time(i)in the period that began at the particular time and ended immediately before the subsequent time, and(ii)at which a particular portion of the obligation is deemed by subsection (8) or (9) to be settledin respect of the particular portion, and(c)all amounts paid in satisfaction of the principal amount of the obligation in the period that began at the particular time and ended immediately before the subsequent time, andCis the amount, if any, by which the total of(a)all amounts deducted under section 61.3 in computing the debtor’s income for the subsequent year or a preceding taxation year,(b)all amounts added because of subsection 80(13) in computing the debtor’s income for the subsequent year or a preceding taxation year in respect of a settlement under subsection (8) or (9) in a period during which the debtor was exempt from tax under this Part on its taxable income, and(c)all amounts added because of subsection 80(13) in computing the debtor’s income for the subsequent year or a preceding taxation year in respect of a settlement under subsection (8) or (9) in a period during which the debtor was non-resident (other than any of those amounts added in computing the debtor’s taxable income or taxable income earned in Canada)exceeds the total of(d)the amount, if any, deducted because of paragraph 37(1)(f.1) in determining the balance determined under subsection 37(1) in respect of the debtor immediately after the subsequent year, and(e)all amounts by which the amount deductible under this subsection in respect of a payment made by the debtor before the subsequent time in computing the debtor’s income for the subsequent year or a preceding year has been reduced because of this description.Marginal note:Foreign currency gains and losses(11)Where an obligation issued by a debtor is denominated in a currency (other than the Canadian currency) and the obligation is deemed by subsection (8) or (9) to have been settled, those subsections do not apply for the purpose of determining any gain or loss of the debtor on the settlement that is attributable to a fluctuation in the value of the currency relative to the value of Canadian currency.
(a)where the obligation is capital property of the person at that time, the adjusted cost base at that time to the person of the obligation, and(b)in any other case, the cost amount to the person of the obligation. (coût déterminé)
(a)paragraphs 80(2)(a), 80(2)(b), 80(2)(j), 80(2)(l) and 80(2)(n) apply; and(b)a person has a significant interest in a corporation at any time if the person owned at that time(i)shares of the capital stock of the corporation that would give the person 25% or more of the votes that could be cast under all circumstances at an annual meeting of shareholders of the corporation, or(ii)shares of the capital stock of the corporation having a fair market value of 25% or more of the fair market value of all the issued shares of the capital stock of the corporationand, for the purposes of this paragraph, a person shall be deemed to own at any time each share of the capital stock of a corporation that is owned, otherwise than because of this paragraph, at that time by another person with whom the person does not deal at arm’s length.
(i)shares of the capital stock of the corporation that would give the person 25% or more of the votes that could be cast under all circumstances at an annual meeting of shareholders of the corporation, or(ii)shares of the capital stock of the corporation having a fair market value of 25% or more of the fair market value of all the issued shares of the capital stock of the corporation
(a)the definitioncost amountin subsection 248(1) were read without reference to paragraph (e) of that definition; and(b)that cost amount included amounts added in computing the creditor’s income in respect of the portion of the indebtedness representing unpaid interest, to the extent those amounts have not been deducted in computing the creditor’s income as bad debts in respect of that unpaid interest.
(a)a debt or other obligation (in this subsection referred to as the “subsidiary’s obligation”) of the subsidiary to pay an amount to the parent, or(b)a debt or other obligation (in this subsection referred to as the “parent’s obligation”) of the parent to pay an amount to the subsidiary
(c)where that payment is less than the amount that would have been the cost amount to the parent or subsidiary of the subsidiary’s obligation or the parent’s obligation immediately before the particular time if the definitioncost amountin subsection 248(1) were read without reference to paragraph (e) of that definition and the parent so elects in a prescribed form on or before the day on or before which the parent is required to file a return of income pursuant to section 150 for the taxation year that includes the particular time, the amount paid at that time in satisfaction of the principal amount of the subsidiary’s obligation or the parent’s obligation shall be deemed to be equal to the amount that would be the cost amount to the parent or the subsidiary, as the case may be, of the subsidiary’s obligation or the parent’s obligation immediately before the particular time if(i)the definitioncost amountin subsection 248(1) were read without reference to paragraph (e) of that definition, and(ii)that cost amount included amounts added in computing the parent’s income or the subsidiary’s income in respect of the portion of the indebtedness representing unpaid interest, to the extent that the parent or the subsidiary has not deducted any amounts as bad debts in respect of that unpaid interest, and(d)for the purposes of applying section 80 to the subsidiary’s obligation, where property is distributed at any time in circumstances to which paragraph 88(1)(a) or 88(1)(b) applies and the subsidiary’s obligation is settled as a consequence of the distribution, the subsidiary’s obligation shall be deemed to have been settled immediately before the time that is immediately before the time of the distribution and not at any later time.
(i)the definitioncost amountin subsection 248(1) were read without reference to paragraph (e) of that definition, and(ii)that cost amount included amounts added in computing the parent’s income or the subsidiary’s income in respect of the portion of the indebtedness representing unpaid interest, to the extent that the parent or the subsidiary has not deducted any amounts as bad debts in respect of that unpaid interest, and
(a)where the payment was less than the adjusted cost base of the share to the parent or the subsidiary, as the case may be, immediately before that time, for the purposes of applying the provisions of this Act to the issuer of the share, the amount paid at that time in satisfaction of the principal amount of the share shall be deemed to be equal to its adjusted cost base to the parent or to the subsidiary, as the case may be; and(b)for the purposes of applying section 80 to the share, where property is distributed at any time in circumstances to which paragraph 88(1)(a) or 88(1)(b) applies and the share is settled as a consequence of the distribution, the share shall be deemed to have been settled immediately before the time that is immediately before the time of the distribution and not at any later time.
(a)paragraph (b) applies if(i)the payment is less than the amount that would have been the adjusted cost base to the SIFT wind-up entity of the subsidiary trust’s obligation immediately before the particular time, and(ii)the SIFT wind-up entity elects, in prescribed form on or before the SIFT wind-up entity’s filing-due date for the taxation year that includes the particular time, to have paragraph (b) apply;(b)if this paragraph applies, the amount paid at the particular time in satisfaction of the principal amount of the subsidiary trust’s obligation is deemed to be equal to the amount that would be the adjusted cost base to the SIFT wind-up entity of the subsidiary trust’s obligation immediately before the particular time if that adjusted cost base included amounts added in computing the SIFT wind-up entity’s income in respect of the portion of the indebtedness representing unpaid interest, to the extent that the SIFT wind-up entity has not deducted any amounts as bad debts in respect of that unpaid interest; and(c)for the purposes of applying section 80 to the subsidiary trust’s obligation, the subsidiary trust’s obligation is deemed to have been settled immediately before the time that is immediately before the distribution.
(i)the payment is less than the amount that would have been the adjusted cost base to the SIFT wind-up entity of the subsidiary trust’s obligation immediately before the particular time, and(ii)the SIFT wind-up entity elects, in prescribed form on or before the SIFT wind-up entity’s filing-due date for the taxation year that includes the particular time, to have paragraph (b) apply;
(a)at any previous time (other than a time before the last time, if any, the obligation became a parked obligation before the particular time),(i)a person who owned the obligation(A)dealt at arm’s length with the debtor, and(B)where the debtor is a corporation, did not have a significant interest in the debtor, or(ii)the obligation was acquired by the holder of the obligation from another person who was, at the time of that acquisition, not related to the holder or related to the holder only because of paragraph 251(5)(b); or(b)the obligation is deemed by subsection 50(1) to be reacquired at the particular time.
(i)a person who owned the obligation(A)dealt at arm’s length with the debtor, and(B)where the debtor is a corporation, did not have a significant interest in the debtor, or(ii)the obligation was acquired by the holder of the obligation from another person who was, at the time of that acquisition, not related to the holder or related to the holder only because of paragraph 251(5)(b); or
(A)dealt at arm’s length with the debtor, and(B)where the debtor is a corporation, did not have a significant interest in the debtor, or
(a)an obligation issued by a debtor is a “parked obligation” at any time where at that time(i)the obligation is a specified obligation of the debtor, and(ii)the holder of the obligation(A)does not deal at arm’s length with the debtor, or(B)where the debtor is a corporation and the holder acquired the obligation after July 12, 1994 (otherwise than pursuant to an agreement in writing entered into on or before July 12, 1994), has a significant interest in the debtor; and(b)an obligation that is, at any time, acquired or reacquired in circumstances to which subparagraph (6)(a)(ii) or paragraph (6)(b) applies shall, if the obligation is a parked obligation immediately after that time, be deemed to have become a parked obligation at that time.
(i)the obligation is a specified obligation of the debtor, and(ii)the holder of the obligation(A)does not deal at arm’s length with the debtor, or(B)where the debtor is a corporation and the holder acquired the obligation after July 12, 1994 (otherwise than pursuant to an agreement in writing entered into on or before July 12, 1994), has a significant interest in the debtor; and
(A)does not deal at arm’s length with the debtor, or(B)where the debtor is a corporation and the holder acquired the obligation after July 12, 1994 (otherwise than pursuant to an agreement in writing entered into on or before July 12, 1994), has a significant interest in the debtor; and
(a)the obligation shall be deemed to have been settled at the particular time; and(b)the forgiven amount at the particular time in respect of the obligation shall be determined as if the debtor had paid an amount at the particular time in satisfaction of the principal amount of the obligation equal to that specified cost.
(a)the principal amount of the obligation
(b)all amounts each of which is a forgiven amount at any time(i)in the period that began at the particular time and ended immediately before the subsequent time, and(ii)at which a particular portion of the obligation is deemed by subsection (8) or (9) to be settledin respect of the particular portion, and(c)all amounts paid in satisfaction of the principal amount of the obligation in the period that began at the particular time and ended immediately before the subsequent time, and
(i)in the period that began at the particular time and ended immediately before the subsequent time, and(ii)at which a particular portion of the obligation is deemed by subsection (8) or (9) to be settled
(a)all amounts deducted under section 61.3 in computing the debtor’s income for the subsequent year or a preceding taxation year,(b)all amounts added because of subsection 80(13) in computing the debtor’s income for the subsequent year or a preceding taxation year in respect of a settlement under subsection (8) or (9) in a period during which the debtor was exempt from tax under this Part on its taxable income, and(c)all amounts added because of subsection 80(13) in computing the debtor’s income for the subsequent year or a preceding taxation year in respect of a settlement under subsection (8) or (9) in a period during which the debtor was non-resident (other than any of those amounts added in computing the debtor’s taxable income or taxable income earned in Canada)
(d)the amount, if any, deducted because of paragraph 37(1)(f.1) in determining the balance determined under subsection 37(1) in respect of the debtor immediately after the subsequent year, and(e)all amounts by which the amount deductible under this subsection in respect of a payment made by the debtor before the subsequent time in computing the debtor’s income for the subsequent year or a preceding year has been reduced because of this description.
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]1995, c. 21, s. 272001, c. 17, s. 592009, c. 2, s. 17
80.02(1)In this section,commercial debt obligation,commercial obligation,distress preferred shareandpersonhave the meanings assigned by subsection 80(1).Marginal note:General rules for distress preferred shares(2)For the purpose of applying the provisions of this Act to an issuer of a distress preferred share,(a)the principal amount, at any time, of the share shall be deemed to be the amount (determined at that time) for which the share was issued;(b)the amount for which the share was issued shall, at any time, be deemed to be the amount, if any, by which the total of(i)the amount for which the share was issued, determined without reference to this paragraph, and(ii)all amounts by which the paid-up capital in respect of the share increased after the share was issued and before that timeexceeds(iii)the total of all amounts each of which is an amount paid before that time on a reduction of the paid-up capital in respect of the share, except to the extent that the amount is deemed by section 84 to have been paid as a dividend;(c)the share shall be deemed to be settled at such time as it is redeemed, acquired or cancelled by the issuer; and(d)a payment in satisfaction of the principal amount of the share is any payment made on a reduction of the paid-up capital in respect of the share to the extent that the payment would be proceeds of disposition of the share within the meaning that would be assigned by the definitionproceeds of dispositionin section 54 if that definition were read without reference to paragraph (j).Marginal note:Substitution of distress preferred share for debt(3)Where any part of the consideration given by a corporation to another person for the settlement or extinguishment at any time of a commercial debt obligation that was issued by the corporation and owned immediately before that time by the other person consists of a distress preferred share issued by the corporation to the other person,(a)for the purposes of section 80, the amount paid at that time in satisfaction of the principal amount of the obligation because of the issue of that share shall be deemed to be equal to the lesser of(i)the principal amount of the obligation, and(ii)the amount by which the paid-up capital in respect of the class of shares that include that share increases because of the issue of that share; and(b)for the purpose of subparagraph (2)(b)(i), the amount for which the share was issued shall be deemed to be equal to the amount deemed by paragraph (a) to have been paid at that time.Marginal note:Substitution of commercial debt obligation for distress preferred share(4)Where any part of the consideration given by a corporation to another person for the settlement at any time of a distress preferred share that was issued by the corporation and owned immediately before that time by the other person consists of a commercial debt obligation issued by the corporation to the other person, for the purposes of section 80(a)the amount paid at that time in satisfaction of the principal amount of the share because of the issue of that obligation shall be deemed to be equal to the principal amount of the obligation; and(b)the amount for which the obligation was issued shall be deemed to be equal to its principal amount.Marginal note:Substitution of distress preferred share for other distress preferred share(5)Where any part of the consideration given by a corporation to another person for the settlement at any time of a particular distress preferred share that was issued by the corporation and owned immediately before that time by the other person consists of another distress preferred share issued by the corporation to the other person, for the purposes of section 80(a)the amount paid at that time in satisfaction of the principal amount of the particular share because of the issue of the other share shall be deemed to be equal to the amount by which the paid-up capital in respect of the class of shares that includes the other share increases because of the issue of the other share; and(b)for the purpose of subparagraph (2)(b)(i), the amount for which the other share was issued shall be deemed to be equal to the amount deemed by paragraph (a) to have been paid at that time.Marginal note:Substitution of non-commercial obligation for distress preferred share(6)Where any part of the consideration given by a corporation to another person for the settlement at any time of a distress preferred share that was issued by the corporation and owned immediately before that time by the other person consists of another share (other than a distress preferred share) or an obligation (other than a commercial obligation) issued by the corporation to the other person, for the purposes of section 80, the amount paid at that time in satisfaction of the principal amount of the distress preferred share because of the issue of the other share or obligation shall be deemed to be equal to the fair market value of the other share or obligation, as the case may be, at that time.Marginal note:Deemed settlement on expiry of term(7)Where at any time a distress preferred share becomes a share that is not a distress preferred share, for the purposes of section 80(a)the share shall be deemed to have been settled immediately before that time; and(b)a payment equal to the fair market value of the share at that time shall be deemed to have been made immediately before that time in satisfaction of the principal amount of the share.
(a)the principal amount, at any time, of the share shall be deemed to be the amount (determined at that time) for which the share was issued;(b)the amount for which the share was issued shall, at any time, be deemed to be the amount, if any, by which the total of(i)the amount for which the share was issued, determined without reference to this paragraph, and(ii)all amounts by which the paid-up capital in respect of the share increased after the share was issued and before that timeexceeds(iii)the total of all amounts each of which is an amount paid before that time on a reduction of the paid-up capital in respect of the share, except to the extent that the amount is deemed by section 84 to have been paid as a dividend;(c)the share shall be deemed to be settled at such time as it is redeemed, acquired or cancelled by the issuer; and(d)a payment in satisfaction of the principal amount of the share is any payment made on a reduction of the paid-up capital in respect of the share to the extent that the payment would be proceeds of disposition of the share within the meaning that would be assigned by the definitionproceeds of dispositionin section 54 if that definition were read without reference to paragraph (j).
(i)the amount for which the share was issued, determined without reference to this paragraph, and(ii)all amounts by which the paid-up capital in respect of the share increased after the share was issued and before that time
(iii)the total of all amounts each of which is an amount paid before that time on a reduction of the paid-up capital in respect of the share, except to the extent that the amount is deemed by section 84 to have been paid as a dividend;
(a)for the purposes of section 80, the amount paid at that time in satisfaction of the principal amount of the obligation because of the issue of that share shall be deemed to be equal to the lesser of(i)the principal amount of the obligation, and(ii)the amount by which the paid-up capital in respect of the class of shares that include that share increases because of the issue of that share; and(b)for the purpose of subparagraph (2)(b)(i), the amount for which the share was issued shall be deemed to be equal to the amount deemed by paragraph (a) to have been paid at that time.
(i)the principal amount of the obligation, and(ii)the amount by which the paid-up capital in respect of the class of shares that include that share increases because of the issue of that share; and
(a)the amount paid at that time in satisfaction of the principal amount of the share because of the issue of that obligation shall be deemed to be equal to the principal amount of the obligation; and(b)the amount for which the obligation was issued shall be deemed to be equal to its principal amount.
(a)the amount paid at that time in satisfaction of the principal amount of the particular share because of the issue of the other share shall be deemed to be equal to the amount by which the paid-up capital in respect of the class of shares that includes the other share increases because of the issue of the other share; and(b)for the purpose of subparagraph (2)(b)(i), the amount for which the other share was issued shall be deemed to be equal to the amount deemed by paragraph (a) to have been paid at that time.
(a)the share shall be deemed to have been settled immediately before that time; and(b)a payment equal to the fair market value of the share at that time shall be deemed to have been made immediately before that time in satisfaction of the principal amount of the share.
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]1995, c. 21, s. 27
80.03(1)In this section,commercial debt obligation,commercial obligation,distress preferred share,forgiven amountandpersonhave the meanings assigned by subsection 80(1).Marginal note:Deferred recognition of debtor’s gain on settlement of debt(2)Where at any time in a taxation year a person (in this subsection referred to as the “transferor”) surrenders a particular capital property (other than a distress preferred share) that is a share, a capital interest in a trust or an interest in a partnership, the person shall be deemed to have a capital gain from the disposition at that time of another capital property (or, where the particular property is a taxable Canadian property, another taxable Canadian property) equal to the amount, if any, by which(a)the total of all amounts deducted under paragraph 53(2)(g.1) in computing the adjusted cost base to the transferor of the particular property immediately before that timeexceeds the total of(b)the amount that would be the transferor’s capital gain for the year from the disposition of the particular property if this Act were read without reference to subsection 100(2), and(c)where, at the end of the year, the transferor is resident in Canada or is a non-resident person who carries on business in Canada through a fixed place of business, the amount designated under subsection (7) by the transferor in respect of the disposition, at that time or immediately after that time, of the particular property.Marginal note:Surrender of capital property(3)For the purpose of subsection (2), a person shall be considered to have surrendered a property at any time only where(a)in the case of a share of the capital stock of a particular corporation,(i)the person is a corporation that disposed of the share at that time and the proceeds of disposition of the share are determined under paragraph 88(1)(b), or(ii)the person is a corporation that owned the share at that time and, immediately after that time, amalgamates or merges with the particular corporation;(b)in the case of a capital interest in a trust, the person disposed of the interest at that time and the proceeds of disposition are determined under paragraph 107(2)(c); and(c)in the case of an interest in a partnership, the person disposed of the interest at that time and the proceeds of disposition are determined under paragraph 98(3)(a) or (5)(a).(4) to (6)[Repealed, 1998, c. 19, s. 112]Marginal note:Alternative treatment(7)Where at any time in a taxation year a person disposes of a property, for the purposes of subsection (2) and section 80(a)the person may designate an amount in a prescribed form filed with the person’s return of income under this Part for the year; and(b)where an amount is designated by the person under paragraph (a) in respect of the disposition,(i)the person shall be deemed to have issued a commercial debt obligation at that time that is settled immediately after that time,(ii)the lesser of the amount so designated and the amount that would, but for this subsection, be a capital gain determined in respect of the disposition because of subsection (2) shall be treated as if it were the forgiven amount at the time of the settlement in respect of the obligation referred to in subparagraph (i),(iii)the source in connection with which the obligation referred to in subparagraph (i) was issued shall be deemed to be the business, if any, carried on by the person at the end of the year, and(iv)where the person does not carry on a business at the end of the year, the person shall be deemed to carry on an active business at the end of the year and the source in connection with which the obligation referred to in subparagraph (i) was issued shall be deemed to be the business deemed by this subparagraph to be carried on.Marginal note:Lifetime capital gains exemption(8)If, as a consequence of the disposition at any time by an individual of a property that is a qualified farm or fishing property of the individual or a qualified small business corporation share of the individual (as defined in subsection 110.6(1)), the individual is deemed by subsection (2) to have a capital gain at that time from the disposition of another property, for the purposes of sections 3, 74.3 and 111, as they apply for the purposes of section 110.6, the other property is deemed to be a qualified farm or fishing property of the individual or a qualified small business corporation share of the individual, as the case may be.
(a)the total of all amounts deducted under paragraph 53(2)(g.1) in computing the adjusted cost base to the transferor of the particular property immediately before that time
(b)the amount that would be the transferor’s capital gain for the year from the disposition of the particular property if this Act were read without reference to subsection 100(2), and(c)where, at the end of the year, the transferor is resident in Canada or is a non-resident person who carries on business in Canada through a fixed place of business, the amount designated under subsection (7) by the transferor in respect of the disposition, at that time or immediately after that time, of the particular property.
(a)in the case of a share of the capital stock of a particular corporation,(i)the person is a corporation that disposed of the share at that time and the proceeds of disposition of the share are determined under paragraph 88(1)(b), or(ii)the person is a corporation that owned the share at that time and, immediately after that time, amalgamates or merges with the particular corporation;(b)in the case of a capital interest in a trust, the person disposed of the interest at that time and the proceeds of disposition are determined under paragraph 107(2)(c); and(c)in the case of an interest in a partnership, the person disposed of the interest at that time and the proceeds of disposition are determined under paragraph 98(3)(a) or (5)(a).
(i)the person is a corporation that disposed of the share at that time and the proceeds of disposition of the share are determined under paragraph 88(1)(b), or(ii)the person is a corporation that owned the share at that time and, immediately after that time, amalgamates or merges with the particular corporation;
(a)the person may designate an amount in a prescribed form filed with the person’s return of income under this Part for the year; and(b)where an amount is designated by the person under paragraph (a) in respect of the disposition,(i)the person shall be deemed to have issued a commercial debt obligation at that time that is settled immediately after that time,(ii)the lesser of the amount so designated and the amount that would, but for this subsection, be a capital gain determined in respect of the disposition because of subsection (2) shall be treated as if it were the forgiven amount at the time of the settlement in respect of the obligation referred to in subparagraph (i),(iii)the source in connection with which the obligation referred to in subparagraph (i) was issued shall be deemed to be the business, if any, carried on by the person at the end of the year, and(iv)where the person does not carry on a business at the end of the year, the person shall be deemed to carry on an active business at the end of the year and the source in connection with which the obligation referred to in subparagraph (i) was issued shall be deemed to be the business deemed by this subparagraph to be carried on.
(i)the person shall be deemed to have issued a commercial debt obligation at that time that is settled immediately after that time,(ii)the lesser of the amount so designated and the amount that would, but for this subsection, be a capital gain determined in respect of the disposition because of subsection (2) shall be treated as if it were the forgiven amount at the time of the settlement in respect of the obligation referred to in subparagraph (i),(iii)the source in connection with which the obligation referred to in subparagraph (i) was issued shall be deemed to be the business, if any, carried on by the person at the end of the year, and(iv)where the person does not carry on a business at the end of the year, the person shall be deemed to carry on an active business at the end of the year and the source in connection with which the obligation referred to in subparagraph (i) was issued shall be deemed to be the business deemed by this subparagraph to be carried on.
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]1995, c. 21, s. 271998, c. 19, s. 1122014, c. 39, s. 152017, c. 33, s. 22(E)
80.04(1)In this section,commercial debt obligation,commercial obligation,debtor,directed person,eligible Canadian partnership,forgiven amountandpersonhave the meanings assigned by subsection 80(1).Marginal note:Eligible transferee(2)For the purpose of this section, aneligible transfereeof a debtor at any time is a directed person at that time in respect of the debtor or a taxable Canadian corporation or eligible Canadian partnership related (otherwise than because of a right referred to in paragraph 251(5)(b)) at that time to the debtor.Marginal note:Application(3)Paragraphs 80(2)(a), 80(2)(b), 80(2)(j), 80(2)(l) and 80(2)(n) apply for the purpose of this section.Marginal note:Agreement respecting transfer of forgiven amount(4)Where(a)a particular commercial obligation (other than an obligation deemed by paragraph (e) to have been issued) issued by a debtor is settled at a particular time,(b)amounts have been designated by the debtor under subsections 80(5) to 80(10) to the maximum extent permitted in respect of the settlement of the particular obligation at the particular time,(c)the debtor and an eligible transferee of the debtor at the particular time file under this section an agreement between them in respect of that settlement, and(d)an amount is specified in that agreementthe following rules apply:(e)except for the purposes of subsection 80(11), the transferee shall be deemed to have issued a commercial debt obligation that was settled at the particular time,(f)the specified amount shall be deemed to be the forgiven amount at the particular time in respect of the obligation referred to in paragraph (e),(g)subject to paragraph (h), the obligation referred to in paragraph (e) shall be deemed to have been issued at the same time (in paragraph (h) referred to as the “time of issue”) at which, and in the same circumstances in which, the particular obligation was issued,(h)if the transferee is a taxpayer that is subject to a loss restriction event after the time of issue and the transferee and the debtor were, if the transferee is a corporation, not related to each other  —  or, if the transferee is a trust, not affiliated with each other  —  immediately before the loss restriction event,(i)the obligation referred to in paragraph (e) is deemed to have been issued after the loss restriction event, and(ii)subparagraph (b)(ii) of the definitionrelevant loss balancein subsection 80(1), paragraph (f) of the definitionsuccessor poolin that subsection and paragraph (b) of the definitionunrecognized lossin that subsection do not apply in respect of the loss restriction event,(i)the source in connection with which the obligation referred to in paragraph (e) was issued shall be deemed to be the source in connection with which the particular obligation was issued, and(j)for the purposes of sections 61.3 and 61.4, the amount included under subsection 80(13) in computing the income of the eligible transferee in respect of the settlement of the obligation referred to in paragraph (e) or deducted under paragraph 80(15)(a) in respect of such income shall be deemed to be nil.Marginal note:Consideration for agreement(5)For the purposes of this Part, where property is acquired at any time by an eligible transferee as consideration for entering into an agreement with a debtor that is filed under this section(a)where the property was owned by the debtor immediately before that time,(i)the debtor shall be deemed to have disposed of the property at that time for proceeds equal to the fair market value of the property at that time, and(ii)no amount may be deducted in computing the debtor’s income as a consequence of the transfer of the property, except any amount arising as a consequence of the application of subparagraph (i);(b)the cost at which the property was acquired by the eligible transferee at that time shall be deemed to be equal to the fair market value of the property at that time; and(c)the eligible transferee shall not be required to add an amount in computing income solely because of the acquisition at that time of the property;(d)[Repealed, 1998, c. 19, s. 113(1)]Marginal note:No benefit conferred(5.1)For the purposes of this Part, where a debtor and an eligible transferee enter into an agreement that is filed under this section, no benefit shall be considered to have been conferred on the debtor as a consequence of the agreement.Marginal note:Manner of filing agreement(6)Subject to subsection (7), a particular agreement between a debtor and an eligible transferee in respect of an obligation issued by the debtor that was settled at any time shall be deemed not to have been filed under this section(a)where it is not filed with the Minister in a prescribed form(i)on or before the later of(A)the day on or before which the debtor’s return of income under this Part is required to be filed for the taxation year or fiscal period, as the case may be, that includes that time (or would be required to be filed if tax under this Part were payable by the debtor for the year), and(B)the day on or before which the transferee’s return of income under this Part is required to be filed for the taxation year or fiscal period, as the case may be, that includes that time, or(ii)on or before the later of(A)the expiry of the 90-day period commencing on the day of mailing of an assessment of tax payable under this Part or a notification that no tax is payable under this Part, as the case may be, for a taxation year or fiscal period described in clause (i)(A) or (B), as the case may be, and(B)if the debtor is an individual (other than a trust) or a graduated rate estate, the day that is one year after the taxpayer’s filing-due date for the year;(b)where it is not accompanied by,(i)where the debtor is a corporation and its directors are legally entitled to administer its affairs, a certified copy of their resolution authorizing the agreement to be made,(ii)where the debtor is a corporation and its directors are not legally entitled to administer its affairs, a certified copy of the document by which the person legally entitled to administer its affairs authorized the agreement to be made,(iii)where the transferee is a corporation and its directors are legally entitled to administer its affairs, a certified copy of their resolution authorizing the agreement to be made, and(iv)where the transferee is a corporation and its directors are not legally entitled to administer its affairs, a certified copy of the document by which the person legally entitled to administer its affairs authorized the agreement to be made; or(c)if an agreement amending the particular agreement has been filed in accordance with this section, except where subsection (8) applies to the particular agreement.Marginal note:Filing by partnership(7)For the purpose of subsection (6), where an obligation is settled at any time in a fiscal period of a partnership, it shall be assumed that(a)the partnership is required to file a return of income under this Part for the fiscal period on or before the latest day on or before which any member of the partnership during the fiscal period is required to file a return of income under this Part for the taxation year in which that fiscal period ends (or would be required to file such a return of income if tax under this Part were payable by the member for that year); and(b)the partnership may serve a notice of objection described in subparagraph (6)(a)(ii) within each period within which any member of the partnership during the fiscal period may serve a notice of objection to tax payable under this Part for a taxation year in which that fiscal period ends.Marginal note:Related corporations(8)Where at any time a corporation becomes related to another corporation and it can reasonably be considered that the main purpose of the corporation becoming related to the other corporation is to enable the corporations to file an agreement under this section, the amount specified in the agreement shall be deemed to be nil for the purpose of the description of C in subsection 80(13).Marginal note:Assessment of taxpayers in respect of agreement(9)The Minister shall, notwithstanding subsections 152(4) to 152(5), assess or reassess the tax, interest and penalties payable under this Act by any taxpayer in order to take into account an agreement filed under this section.Marginal note:Liability of debtor(10)Without affecting the liability of any person under any other provision of this Act, where a debtor and an eligible transferee file an agreement between them under this section in respect of an obligation issued by the debtor that was settled at any time, the debtor is, to the extent of 30% of the amount specified in the agreement, liable to pay(a)where the transferee is a corporation, all taxes payable under this Act by it for taxation years that end in the period that begins at that time and ends 4 calendar years after that time;(b)where the transferee is a partnership, the total of all amounts each of which is the tax payable under this Act by a person for a taxation year(i)that begins or ends in that period, and(ii)that includes the end of a fiscal period of the partnership during which the person was a member of the partnership; and(c)interest and penalties in respect of such taxes.Marginal note:Joint and several, or solidary, liability(11)If taxes, interest and penalties are payable under this Act by a person for a taxation year and those taxes, interest and penalties are payable by a debtor because of subsection (10), the debtor and the person are jointly and severally, or solidarily, liable to pay those amounts.Marginal note:Assessments in respect of liability(12)Where a debtor and an eligible transferee file an agreement between them under this section in respect of an obligation issued by the debtor that was settled at a particular time,(a)where the debtor is an individual or a corporation, the Minister may at any subsequent time assess the debtor in respect of taxes, interest and penalties for which the debtor is liable because of subsection (10); and(b)where the debtor is a partnership, the Minister may at any subsequent time assess any person who has been a member of the partnership in respect of taxes, interest and penalties for which the partnership is liable because of subsection (10), to the extent that those amounts relate to taxation years of the transferee (or, where the transferee is another partnership, members of the other partnership) that end at or after(i)where the person was not a member of the partnership at the particular time, the first subsequent time the person becomes a member of the partnership, and(ii)in any other case, the particular time.Marginal note:Application of Division I(13)The provisions of Division I apply to an assessment under subsection (12) as though it had been made under section 152.Marginal note:Partnership members(14)For the purposes of paragraphs (10)(b) and (12)(b) and this subsection, where at any time a member of a particular partnership is another partnership, each member of the other partnership shall be deemed to be a member of the particular partnership at that time.
(a)a particular commercial obligation (other than an obligation deemed by paragraph (e) to have been issued) issued by a debtor is settled at a particular time,(b)amounts have been designated by the debtor under subsections 80(5) to 80(10) to the maximum extent permitted in respect of the settlement of the particular obligation at the particular time,(c)the debtor and an eligible transferee of the debtor at the particular time file under this section an agreement between them in respect of that settlement, and(d)an amount is specified in that agreement
(e)except for the purposes of subsection 80(11), the transferee shall be deemed to have issued a commercial debt obligation that was settled at the particular time,(f)the specified amount shall be deemed to be the forgiven amount at the particular time in respect of the obligation referred to in paragraph (e),(g)subject to paragraph (h), the obligation referred to in paragraph (e) shall be deemed to have been issued at the same time (in paragraph (h) referred to as the “time of issue”) at which, and in the same circumstances in which, the particular obligation was issued,(h)if the transferee is a taxpayer that is subject to a loss restriction event after the time of issue and the transferee and the debtor were, if the transferee is a corporation, not related to each other  —  or, if the transferee is a trust, not affiliated with each other  —  immediately before the loss restriction event,(i)the obligation referred to in paragraph (e) is deemed to have been issued after the loss restriction event, and(ii)subparagraph (b)(ii) of the definitionrelevant loss balancein subsection 80(1), paragraph (f) of the definitionsuccessor poolin that subsection and paragraph (b) of the definitionunrecognized lossin that subsection do not apply in respect of the loss restriction event,(i)the source in connection with which the obligation referred to in paragraph (e) was issued shall be deemed to be the source in connection with which the particular obligation was issued, and(j)for the purposes of sections 61.3 and 61.4, the amount included under subsection 80(13) in computing the income of the eligible transferee in respect of the settlement of the obligation referred to in paragraph (e) or deducted under paragraph 80(15)(a) in respect of such income shall be deemed to be nil.
(i)the obligation referred to in paragraph (e) is deemed to have been issued after the loss restriction event, and(ii)subparagraph (b)(ii) of the definitionrelevant loss balancein subsection 80(1), paragraph (f) of the definitionsuccessor poolin that subsection and paragraph (b) of the definitionunrecognized lossin that subsection do not apply in respect of the loss restriction event,
(a)where the property was owned by the debtor immediately before that time,(i)the debtor shall be deemed to have disposed of the property at that time for proceeds equal to the fair market value of the property at that time, and(ii)no amount may be deducted in computing the debtor’s income as a consequence of the transfer of the property, except any amount arising as a consequence of the application of subparagraph (i);(b)the cost at which the property was acquired by the eligible transferee at that time shall be deemed to be equal to the fair market value of the property at that time; and(c)the eligible transferee shall not be required to add an amount in computing income solely because of the acquisition at that time of the property;(d)[Repealed, 1998, c. 19, s. 113(1)]
(i)the debtor shall be deemed to have disposed of the property at that time for proceeds equal to the fair market value of the property at that time, and(ii)no amount may be deducted in computing the debtor’s income as a consequence of the transfer of the property, except any amount arising as a consequence of the application of subparagraph (i);
(a)where it is not filed with the Minister in a prescribed form(i)on or before the later of(A)the day on or before which the debtor’s return of income under this Part is required to be filed for the taxation year or fiscal period, as the case may be, that includes that time (or would be required to be filed if tax under this Part were payable by the debtor for the year), and(B)the day on or before which the transferee’s return of income under this Part is required to be filed for the taxation year or fiscal period, as the case may be, that includes that time, or(ii)on or before the later of(A)the expiry of the 90-day period commencing on the day of mailing of an assessment of tax payable under this Part or a notification that no tax is payable under this Part, as the case may be, for a taxation year or fiscal period described in clause (i)(A) or (B), as the case may be, and(B)if the debtor is an individual (other than a trust) or a graduated rate estate, the day that is one year after the taxpayer’s filing-due date for the year;(b)where it is not accompanied by,(i)where the debtor is a corporation and its directors are legally entitled to administer its affairs, a certified copy of their resolution authorizing the agreement to be made,(ii)where the debtor is a corporation and its directors are not legally entitled to administer its affairs, a certified copy of the document by which the person legally entitled to administer its affairs authorized the agreement to be made,(iii)where the transferee is a corporation and its directors are legally entitled to administer its affairs, a certified copy of their resolution authorizing the agreement to be made, and(iv)where the transferee is a corporation and its directors are not legally entitled to administer its affairs, a certified copy of the document by which the person legally entitled to administer its affairs authorized the agreement to be made; or(c)if an agreement amending the particular agreement has been filed in accordance with this section, except where subsection (8) applies to the particular agreement.
(i)on or before the later of(A)the day on or before which the debtor’s return of income under this Part is required to be filed for the taxation year or fiscal period, as the case may be, that includes that time (or would be required to be filed if tax under this Part were payable by the debtor for the year), and(B)the day on or before which the transferee’s return of income under this Part is required to be filed for the taxation year or fiscal period, as the case may be, that includes that time, or(ii)on or before the later of(A)the expiry of the 90-day period commencing on the day of mailing of an assessment of tax payable under this Part or a notification that no tax is payable under this Part, as the case may be, for a taxation year or fiscal period described in clause (i)(A) or (B), as the case may be, and(B)if the debtor is an individual (other than a trust) or a graduated rate estate, the day that is one year after the taxpayer’s filing-due date for the year;
(A)the day on or before which the debtor’s return of income under this Part is required to be filed for the taxation year or fiscal period, as the case may be, that includes that time (or would be required to be filed if tax under this Part were payable by the debtor for the year), and(B)the day on or before which the transferee’s return of income under this Part is required to be filed for the taxation year or fiscal period, as the case may be, that includes that time, or
(A)the expiry of the 90-day period commencing on the day of mailing of an assessment of tax payable under this Part or a notification that no tax is payable under this Part, as the case may be, for a taxation year or fiscal period described in clause (i)(A) or (B), as the case may be, and(B)if the debtor is an individual (other than a trust) or a graduated rate estate, the day that is one year after the taxpayer’s filing-due date for the year;
(i)where the debtor is a corporation and its directors are legally entitled to administer its affairs, a certified copy of their resolution authorizing the agreement to be made,(ii)where the debtor is a corporation and its directors are not legally entitled to administer its affairs, a certified copy of the document by which the person legally entitled to administer its affairs authorized the agreement to be made,(iii)where the transferee is a corporation and its directors are legally entitled to administer its affairs, a certified copy of their resolution authorizing the agreement to be made, and(iv)where the transferee is a corporation and its directors are not legally entitled to administer its affairs, a certified copy of the document by which the person legally entitled to administer its affairs authorized the agreement to be made; or
(a)the partnership is required to file a return of income under this Part for the fiscal period on or before the latest day on or before which any member of the partnership during the fiscal period is required to file a return of income under this Part for the taxation year in which that fiscal period ends (or would be required to file such a return of income if tax under this Part were payable by the member for that year); and(b)the partnership may serve a notice of objection described in subparagraph (6)(a)(ii) within each period within which any member of the partnership during the fiscal period may serve a notice of objection to tax payable under this Part for a taxation year in which that fiscal period ends.
(a)where the transferee is a corporation, all taxes payable under this Act by it for taxation years that end in the period that begins at that time and ends 4 calendar years after that time;(b)where the transferee is a partnership, the total of all amounts each of which is the tax payable under this Act by a person for a taxation year(i)that begins or ends in that period, and(ii)that includes the end of a fiscal period of the partnership during which the person was a member of the partnership; and(c)interest and penalties in respect of such taxes.
(i)that begins or ends in that period, and(ii)that includes the end of a fiscal period of the partnership during which the person was a member of the partnership; and
(a)where the debtor is an individual or a corporation, the Minister may at any subsequent time assess the debtor in respect of taxes, interest and penalties for which the debtor is liable because of subsection (10); and(b)where the debtor is a partnership, the Minister may at any subsequent time assess any person who has been a member of the partnership in respect of taxes, interest and penalties for which the partnership is liable because of subsection (10), to the extent that those amounts relate to taxation years of the transferee (or, where the transferee is another partnership, members of the other partnership) that end at or after(i)where the person was not a member of the partnership at the particular time, the first subsequent time the person becomes a member of the partnership, and(ii)in any other case, the particular time.
(i)where the person was not a member of the partnership at the particular time, the first subsequent time the person becomes a member of the partnership, and(ii)in any other case, the particular time.
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]1995, c. 21, s. 271998, c. 19, s. 1132013, c. 34, ss. 119(E), 214, c. 40, s. 372014, c. 39, s. 16
80.1(1)Where in a taxation year ending coincidentally with or after December 31, 1971 a taxpayer resident in Canada has acquired any bonds, debentures, mortgages, hypothecary claims, notes or similar obligations (in this section referred to as “expropriation assets”) issued by the government of a country other than Canada or issued by a person resident in a country other than Canada and guaranteed by the government of that country,(a)as compensation for(i)shares owned by the taxpayer of the capital stock of a foreign affiliate of the taxpayer that carried on business in that country, or(ii)all or substantially all of the property used by the taxpayer in carrying on business in that country,(which shares or property, as the case may be, are referred to in this section as “foreign property”), taken, after June 18, 1971, from the taxpayer by the issuer under the authority of a law of that country, or(b)as consideration for the sale of foreign property sold, after June 18, 1971, by the taxpayer to the issuer, if(i)the sale was, by a law of that country, expressly required to be made, or(ii)the sale was made after notice or other manifestation of an intention to take the foreign property,if the taxpayer has so elected, in prescribed form and within prescribed time, in respect of all of the expropriation assets so acquired by the taxpayer, the following rule applies, namely, an amount in respect of each such expropriation asset, equal to(c)the principal amount of the asset, or(d)where the taxpayer has designated in the taxpayer’s election an amount in respect of the asset that is less than the principal amount thereof, the amount so designated,shall be deemed to be(e)the cost to the taxpayer of the asset, and(f)for the purpose of computing the taxpayer’s proceeds of disposition of the foreign property so taken or sold, the amount received by the taxpayer by virtue of the taxpayer’s acquisition of the asset,except that in no case may the taxpayer designate an amount in respect of any expropriation asset so that the taxpayer’s proceeds of disposition of the foreign property so taken or sold (computed having regard to the provisions of paragraph 80.1(1)(f)) are less than the cost amount to the taxpayer of the foreign property immediately before it was so taken or sold.Marginal note:Election re interest received or to be received on expropriation assets acquired by taxpayer(2)Where a taxpayer has elected in prescribed form and within prescribed time in respect of all amounts (each of which is referred to in this section as an “interest amount”) received or to be received by the taxpayer as or on account of interest on all expropriation assets acquired by the taxpayer as compensation for, or as consideration for the sale of, foreign property taken by or sold to any particular issuer as described in subsection 80.1(1), the following rules apply in respect of each such asset so acquired by the taxpayer:(a)in computing the taxpayer’s income for a taxation year from the asset, there may be deducted, in respect of each interest amount received by the taxpayer in the year on the asset, the lesser of the interest amount and the total of(i)the amount required by paragraph 80.1(2)(b) to be added, by virtue of the receipt by the taxpayer of the interest amount, in computing the adjusted cost base to the taxpayer of the asset, and(ii)the greater of(A)the adjusted cost base to the taxpayer of the asset immediately before the interest amount was so received by the taxpayer, and(B)the adjusted principal amount to the taxpayer of the asset immediately before the interest amount was so received by the taxpayer,and there shall be included, in respect of each amount (in this paragraph referred to as a “capital amount”) received by the taxpayer in the year as, on account or in lieu of payment of, or in satisfaction of,(iii)any proceeds of disposition of the asset, or(iv)the principal amount of the asset,the amount, if any, by which the capital amount exceeds the greater of the adjusted cost base to the taxpayer of the asset immediately before the capital amount was received by the taxpayer and its adjusted principal amount to the taxpayer at that time;(b)in computing, at any particular time, the adjusted cost base to the taxpayer of the asset, there shall be added, in respect of each interest amount received by the taxpayer on the asset before the particular time, an amount equal to the lesser of(i)any income or profits tax paid by the taxpayer to the government of a country other than Canada in respect of the interest amount, and(ii)that proportion of the tax referred to in subparagraph 80.1(2)(b)(i) that the adjusted cost base to the taxpayer of the asset immediately before the interest amount was received by the taxpayer is of the amount, if any, by which the interest amount exceeds the tax referred to in that subparagraph,and there shall be deducted(iii)each interest amount received by the taxpayer on the asset before the particular time, and(iv)each amount received by the taxpayer before the particular time on account of the principal amount of the asset;(c)the receipt by the taxpayer of an amount described in subparagraph 80.1(2)(b)(iv) in respect of the asset shall be deemed not to be a partial disposition thereof; and(d)for the purposes of section 126, notwithstanding the definitionnon-business-income taxin subsection 126(7), thenon-business-income taxpaid by a taxpayer does not include any tax, or any portion thereof, the amount of which is required by paragraph 80.1(2)(b) to be added in computing the adjusted cost base to the taxpayer of the asset.Marginal note:Where interest amount and capital amount received at same time(3)For the purposes of subsection 80.1(2), where an interest amount on an expropriation asset and a capital amount with respect to that asset are received by a taxpayer at the same time, the interest amount shall be deemed to have been received by the taxpayer immediately before the capital amount.Marginal note:Assets acquired from foreign affiliate of taxpayer as dividend in kind or as benefit to shareholder(4)Where a foreign affiliate of a taxpayer resident in Canada would, on the assumption that the foreign affiliate were resident in Canada and its only foreign affiliates were corporations that were foreign affiliates of the taxpayer, be entitled to make an election under subsection 80.1(1) in respect of assets acquired by it that would, on that assumption, be expropriation assets of the foreign affiliate, and all or any of those assets are subsequently acquired by the taxpayer from the foreign affiliate as a dividend payable in kind, or as a benefit received from the foreign affiliate that would otherwise be required by subsection 15(1) to be included in computing the income of the taxpayer, if the taxpayer has so elected, in prescribed form and within prescribed time, in respect of all assets so acquired by the taxpayer from the foreign affiliate, the following rules apply in respect of each asset so acquired by the taxpayer:(a)an amount equal to(i)the principal amount of the asset, or(ii)where the taxpayer has designated in the taxpayer’s election an amount in respect of the asset that is less than the principal amount thereof, the amount so designated,shall be deemed to be,(iii)notwithstanding subsection 52(2), the cost to the taxpayer of the asset, and(iv)the amount of the dividend or benefit, as the case may be, received by the taxpayer by virtue of the acquisition by the taxpayer of the asset;(b)where the asset was so acquired as such a benefit and the taxpayer has designated in the election a class of shares as described in this paragraph in respect of the asset, the amount of the benefit shall be deemed(i)to have been received by the taxpayer as a dividend from the foreign affiliate in respect of such class of shares of the capital stock thereof as the taxpayer has designated in the election, and(ii)not to be an amount required by subsection 15(1) to be included in computing the taxpayer’s income;(c)in computing the taxable income of the taxpayer for the taxation year in which the taxpayer acquired the asset, there may be deducted from the taxpayer’s income for the year the amount, if any, by which the amount received by the taxpayer as a dividend by virtue of the acquisition by the taxpayer of the asset exceeds the total of amounts deductible in respect of the dividend under sections 91 and 113 in computing the taxpayer’s income or taxable income, as the case may be, for the year;(d)there shall be deducted in computing the adjusted cost base to the taxpayer of each share of the capital stock of the foreign affiliate that is a share of a class in respect of which an amount was received by the taxpayer as a dividend by virtue of the acquisition by the taxpayer of the asset, the quotient obtained by dividing the amount, if any, deducted by the taxpayer under paragraph (c) in respect of the dividend by the number of shares of that class owned by the taxpayer immediately before that amount was received by the taxpayer as a dividend;(e)any capital loss of the taxpayer from the disposition, after the time when the asset was so acquired by the taxpayer, of a share of the capital stock of the foreign affiliate shall be deemed to be nil; and(f)where the taxpayer has so elected in prescribed form and within prescribed time, subsection (2) applies as if the asset were an expropriation asset acquired by the taxpayer as compensation for foreign property taken by a particular issuer as described in subsection (1).Marginal note:Assets acquired from foreign affiliate of taxpayer as consideration for settlement, etc., of debt(5)Where a foreign affiliate of a taxpayer resident in Canada would, on the assumption that the foreign affiliate were resident in Canada and its only foreign affiliates were corporations that were foreign affiliates of the taxpayer, be entitled to make an election under subsection 80.1(1) in respect of assets acquired by it that would, on that assumption, be expropriation assets of the foreign affiliate, and all or any of those assets are subsequently acquired by the taxpayer from the foreign affiliate as consideration for the settlement or extinguishment of a capital property of the taxpayer that was a debt payable by the foreign affiliate to the taxpayer or any other obligation of the foreign affiliate to pay an amount to the taxpayer (which debt or other obligation is referred to in this subsection as the “obligation”), if the taxpayer has so elected, in prescribed form and within prescribed time, in respect of all of the assets so acquired by the taxpayer from the foreign affiliate, the following rules apply in respect of each such asset so acquired by the taxpayer:(a)paragraph 80.1(4)(a) applies in respect of the asset as if subparagraph 80.1(4)(a)(iv) were read as follows:“(iv)the taxpayer’s proceeds of the disposition of the obligation settled or extinguished by virtue of the acquisition by the taxpayer of the asset;”;(b)where the taxpayer has designated in the taxpayer’s election a class of shares as described in this paragraph in respect of the asset,(i)the amount, if any, by which the cost to the taxpayer of the asset (computed having regard to paragraph (a) and paragraph (4)(a)) exceeds the amount of the obligation settled or extinguished by virtue of the acquisition by the taxpayer of the asset shall be deemed to have been received by the taxpayer as a dividend from the foreign affiliate in respect of such class of shares of the capital stock thereof as the taxpayer has designated in the election, and(ii)the taxpayer’s gain, if any, from the disposition of the obligation shall be deemed to be nil;(c)the taxpayer’s loss, if any, from the disposition of the obligation shall be deemed to be nil; and(d)paragraphs (4)(c) to (f) apply in respect of the asset.Marginal note:Assets acquired from foreign affiliate of taxpayer on winding-up, etc.(6)Where a foreign affiliate of a taxpayer resident in Canada would, on the assumption that the foreign affiliate were resident in Canada and its only foreign affiliates were corporations that were foreign affiliates of the taxpayer, be entitled to make an election under subsection 80.1(1) in respect of assets acquired by it that would, on that assumption, be expropriation assets of the foreign affiliate, and all or any of those assets are subsequently acquired by the taxpayer from the foreign affiliate,(a)on the winding-up, discontinuance or reorganization of the business of the foreign affiliate, or(b)as consideration for the redemption, cancellation or acquisition by the foreign affiliate of shares of its capital stock,if the taxpayer has so elected, in prescribed form and within prescribed time,(c)in respect of all of the assets so acquired by the taxpayer from the foreign affiliate, subsection (1) applies in respect of each such asset, or(d)in respect of all amounts received or to be received by the taxpayer as or on account of interest on all of the assets so acquired by the taxpayer from the foreign affiliate, subsection (2) applies in respect of each such asset,as if the assets were expropriation assets acquired by the taxpayer as consideration for the sale of foreign property that consisted of shares of the capital stock of the foreign affiliate owned by the taxpayer immediately before the assets were so acquired and that was sold to a particular issuer as described in subsection (1).Definition ofadjusted principal amount(7)In this section,adjusted principal amountto a taxpayer of an expropriation asset at any particular time means the amount, if any, by which(a)the total of the principal amount of the asset and, in respect of each interest amount received by the taxpayer on the asset before the particular time, the lesser of the tax referred to in subparagraph (2)(b)(i) in respect of that interest amount and the proportion determined under subparagraph (2)(b)(ii) in respect thereof,exceeds(b)the total of each amount received by the taxpayer before the particular time as an interest amount on the asset and each amount received by the taxpayer before the particular time as, on account or in lieu of payment of, or in satisfaction of, the principal amount of the asset.Marginal note:Currency in which adjusted principal amount to be computed or expressed(8)For the purposes of this section, the adjusted principal amount, at any particular time, of an expropriation asset or of any asset assumed for the purposes of this section to be an expropriation asset shall be computed in the currency in which the principal amount of the asset is, under the terms thereof, payable, except that for greater certainty, for the purposes of paragraph (2)(a), the adjusted principal amount at any particular time of such an asset is its adjusted principal amount at that time computed as provided in this subsection but expressed in Canadian currency.Marginal note:Election in respect of two or more expropriation assets acquired by taxpayer(9)For the purposes of Subdivision C and subsection (2), and in applying subsections (7) and (8) for those purposes, where two or more expropriation assets that were(a)issued by the government of a country other than Canada, or(b)issued by a person resident in a country other than Canada and guaranteed by the government of that countryat the same time, or as compensation for, or consideration for the sale of, the same foreign property, have been acquired by a taxpayer and the taxpayer has so elected, in prescribed form and within prescribed time, in respect of all of the expropriation assets that were so issued or guaranteed by the government of that country and acquired by the taxpayer before the making of the election, all of those expropriation assets shall be considered to be a single expropriation asset that was issued or guaranteed by the government of that country and acquired by the taxpayer.
(a)as compensation for(i)shares owned by the taxpayer of the capital stock of a foreign affiliate of the taxpayer that carried on business in that country, or(ii)all or substantially all of the property used by the taxpayer in carrying on business in that country,(which shares or property, as the case may be, are referred to in this section as “foreign property”), taken, after June 18, 1971, from the taxpayer by the issuer under the authority of a law of that country, or(b)as consideration for the sale of foreign property sold, after June 18, 1971, by the taxpayer to the issuer, if(i)the sale was, by a law of that country, expressly required to be made, or(ii)the sale was made after notice or other manifestation of an intention to take the foreign property,
(i)shares owned by the taxpayer of the capital stock of a foreign affiliate of the taxpayer that carried on business in that country, or(ii)all or substantially all of the property used by the taxpayer in carrying on business in that country,
(i)the sale was, by a law of that country, expressly required to be made, or(ii)the sale was made after notice or other manifestation of an intention to take the foreign property,
(c)the principal amount of the asset, or(d)where the taxpayer has designated in the taxpayer’s election an amount in respect of the asset that is less than the principal amount thereof, the amount so designated,
(e)the cost to the taxpayer of the asset, and(f)for the purpose of computing the taxpayer’s proceeds of disposition of the foreign property so taken or sold, the amount received by the taxpayer by virtue of the taxpayer’s acquisition of the asset,
(a)in computing the taxpayer’s income for a taxation year from the asset, there may be deducted, in respect of each interest amount received by the taxpayer in the year on the asset, the lesser of the interest amount and the total of(i)the amount required by paragraph 80.1(2)(b) to be added, by virtue of the receipt by the taxpayer of the interest amount, in computing the adjusted cost base to the taxpayer of the asset, and(ii)the greater of(A)the adjusted cost base to the taxpayer of the asset immediately before the interest amount was so received by the taxpayer, and(B)the adjusted principal amount to the taxpayer of the asset immediately before the interest amount was so received by the taxpayer,and there shall be included, in respect of each amount (in this paragraph referred to as a “capital amount”) received by the taxpayer in the year as, on account or in lieu of payment of, or in satisfaction of,(iii)any proceeds of disposition of the asset, or(iv)the principal amount of the asset,the amount, if any, by which the capital amount exceeds the greater of the adjusted cost base to the taxpayer of the asset immediately before the capital amount was received by the taxpayer and its adjusted principal amount to the taxpayer at that time;(b)in computing, at any particular time, the adjusted cost base to the taxpayer of the asset, there shall be added, in respect of each interest amount received by the taxpayer on the asset before the particular time, an amount equal to the lesser of(i)any income or profits tax paid by the taxpayer to the government of a country other than Canada in respect of the interest amount, and(ii)that proportion of the tax referred to in subparagraph 80.1(2)(b)(i) that the adjusted cost base to the taxpayer of the asset immediately before the interest amount was received by the taxpayer is of the amount, if any, by which the interest amount exceeds the tax referred to in that subparagraph,and there shall be deducted(iii)each interest amount received by the taxpayer on the asset before the particular time, and(iv)each amount received by the taxpayer before the particular time on account of the principal amount of the asset;(c)the receipt by the taxpayer of an amount described in subparagraph 80.1(2)(b)(iv) in respect of the asset shall be deemed not to be a partial disposition thereof; and(d)for the purposes of section 126, notwithstanding the definitionnon-business-income taxin subsection 126(7), thenon-business-income taxpaid by a taxpayer does not include any tax, or any portion thereof, the amount of which is required by paragraph 80.1(2)(b) to be added in computing the adjusted cost base to the taxpayer of the asset.
(i)the amount required by paragraph 80.1(2)(b) to be added, by virtue of the receipt by the taxpayer of the interest amount, in computing the adjusted cost base to the taxpayer of the asset, and(ii)the greater of(A)the adjusted cost base to the taxpayer of the asset immediately before the interest amount was so received by the taxpayer, and(B)the adjusted principal amount to the taxpayer of the asset immediately before the interest amount was so received by the taxpayer,
(A)the adjusted cost base to the taxpayer of the asset immediately before the interest amount was so received by the taxpayer, and(B)the adjusted principal amount to the taxpayer of the asset immediately before the interest amount was so received by the taxpayer,
(iii)any proceeds of disposition of the asset, or(iv)the principal amount of the asset,
(i)any income or profits tax paid by the taxpayer to the government of a country other than Canada in respect of the interest amount, and(ii)that proportion of the tax referred to in subparagraph 80.1(2)(b)(i) that the adjusted cost base to the taxpayer of the asset immediately before the interest amount was received by the taxpayer is of the amount, if any, by which the interest amount exceeds the tax referred to in that subparagraph,
(iii)each interest amount received by the taxpayer on the asset before the particular time, and(iv)each amount received by the taxpayer before the particular time on account of the principal amount of the asset;
(a)an amount equal to(i)the principal amount of the asset, or(ii)where the taxpayer has designated in the taxpayer’s election an amount in respect of the asset that is less than the principal amount thereof, the amount so designated,shall be deemed to be,(iii)notwithstanding subsection 52(2), the cost to the taxpayer of the asset, and(iv)the amount of the dividend or benefit, as the case may be, received by the taxpayer by virtue of the acquisition by the taxpayer of the asset;(b)where the asset was so acquired as such a benefit and the taxpayer has designated in the election a class of shares as described in this paragraph in respect of the asset, the amount of the benefit shall be deemed(i)to have been received by the taxpayer as a dividend from the foreign affiliate in respect of such class of shares of the capital stock thereof as the taxpayer has designated in the election, and(ii)not to be an amount required by subsection 15(1) to be included in computing the taxpayer’s income;(c)in computing the taxable income of the taxpayer for the taxation year in which the taxpayer acquired the asset, there may be deducted from the taxpayer’s income for the year the amount, if any, by which the amount received by the taxpayer as a dividend by virtue of the acquisition by the taxpayer of the asset exceeds the total of amounts deductible in respect of the dividend under sections 91 and 113 in computing the taxpayer’s income or taxable income, as the case may be, for the year;(d)there shall be deducted in computing the adjusted cost base to the taxpayer of each share of the capital stock of the foreign affiliate that is a share of a class in respect of which an amount was received by the taxpayer as a dividend by virtue of the acquisition by the taxpayer of the asset, the quotient obtained by dividing the amount, if any, deducted by the taxpayer under paragraph (c) in respect of the dividend by the number of shares of that class owned by the taxpayer immediately before that amount was received by the taxpayer as a dividend;(e)any capital loss of the taxpayer from the disposition, after the time when the asset was so acquired by the taxpayer, of a share of the capital stock of the foreign affiliate shall be deemed to be nil; and(f)where the taxpayer has so elected in prescribed form and within prescribed time, subsection (2) applies as if the asset were an expropriation asset acquired by the taxpayer as compensation for foreign property taken by a particular issuer as described in subsection (1).
(i)the principal amount of the asset, or(ii)where the taxpayer has designated in the taxpayer’s election an amount in respect of the asset that is less than the principal amount thereof, the amount so designated,
(iii)notwithstanding subsection 52(2), the cost to the taxpayer of the asset, and(iv)the amount of the dividend or benefit, as the case may be, received by the taxpayer by virtue of the acquisition by the taxpayer of the asset;
(i)to have been received by the taxpayer as a dividend from the foreign affiliate in respect of such class of shares of the capital stock thereof as the taxpayer has designated in the election, and(ii)not to be an amount required by subsection 15(1) to be included in computing the taxpayer’s income;
(a)paragraph 80.1(4)(a) applies in respect of the asset as if subparagraph 80.1(4)(a)(iv) were read as follows:“(iv)the taxpayer’s proceeds of the disposition of the obligation settled or extinguished by virtue of the acquisition by the taxpayer of the asset;”;(b)where the taxpayer has designated in the taxpayer’s election a class of shares as described in this paragraph in respect of the asset,(i)the amount, if any, by which the cost to the taxpayer of the asset (computed having regard to paragraph (a) and paragraph (4)(a)) exceeds the amount of the obligation settled or extinguished by virtue of the acquisition by the taxpayer of the asset shall be deemed to have been received by the taxpayer as a dividend from the foreign affiliate in respect of such class of shares of the capital stock thereof as the taxpayer has designated in the election, and(ii)the taxpayer’s gain, if any, from the disposition of the obligation shall be deemed to be nil;(c)the taxpayer’s loss, if any, from the disposition of the obligation shall be deemed to be nil; and(d)paragraphs (4)(c) to (f) apply in respect of the asset.
“(iv)the taxpayer’s proceeds of the disposition of the obligation settled or extinguished by virtue of the acquisition by the taxpayer of the asset;”;
(i)the amount, if any, by which the cost to the taxpayer of the asset (computed having regard to paragraph (a) and paragraph (4)(a)) exceeds the amount of the obligation settled or extinguished by virtue of the acquisition by the taxpayer of the asset shall be deemed to have been received by the taxpayer as a dividend from the foreign affiliate in respect of such class of shares of the capital stock thereof as the taxpayer has designated in the election, and(ii)the taxpayer’s gain, if any, from the disposition of the obligation shall be deemed to be nil;
(a)on the winding-up, discontinuance or reorganization of the business of the foreign affiliate, or(b)as consideration for the redemption, cancellation or acquisition by the foreign affiliate of shares of its capital stock,
(c)in respect of all of the assets so acquired by the taxpayer from the foreign affiliate, subsection (1) applies in respect of each such asset, or(d)in respect of all amounts received or to be received by the taxpayer as or on account of interest on all of the assets so acquired by the taxpayer from the foreign affiliate, subsection (2) applies in respect of each such asset,
(a)the total of the principal amount of the asset and, in respect of each interest amount received by the taxpayer on the asset before the particular time, the lesser of the tax referred to in subparagraph (2)(b)(i) in respect of that interest amount and the proportion determined under subparagraph (2)(b)(ii) in respect thereof,
(b)the total of each amount received by the taxpayer before the particular time as an interest amount on the asset and each amount received by the taxpayer before the particular time as, on account or in lieu of payment of, or in satisfaction of, the principal amount of the asset.
(a)issued by the government of a country other than Canada, or(b)issued by a person resident in a country other than Canada and guaranteed by the government of that country
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]R.S., 1985, c. 1 (5th Supp.), s. 80.12001, c. 17, s. 210
80.2(1)Subsections (2) to (13) apply if(a)in a taxation year, a taxpayer, under the terms of a contract, pays to a person (referred to in this section as the “recipient”) an amount (referred to in this section as the “specified amount”) that may reasonably be considered to be received by the recipient as a reimbursement of, or a contribution or an allowance in respect of, an amount (referred to in this section as the “original amount”)(i)that was described by paragraph 18(1)(m) and was paid or payable by the recipient, or(ii)that was, in respect of the recipient, an amount described by paragraph 12(1)(o);(b)the original amount is paid or became payable or receivable in a taxation year or fiscal period of the recipient that begins before 2007; and(c)the taxpayer is resident in Canada or carries on business in Canada when the specified amount is paid.Marginal note:Rules relating to time of payment(2)If the specified amount is paid in a taxation year of the taxpayer that begins before 2008, the eligible portion of the specified amount, referred to in subsection (11), is deemed to be a payment described by paragraph 18(1)(m)