Income Tax Act — I-3.3 212
of which is at that particular time (i) an amount outstanding as or on account of a debt or other obligation that is owed to the particular ultimate funder under a relevant funding arrangement, (ii) the fair market value of a particular property referred to in subparagraph (3.1)(c)(ii) in respect of which the particular ultimate funder has granted a specified right under a relevant funding arrangement, or (iii) if neither subparagraph (i) nor (ii) applies at that particular time, nil, and H is the total of all amounts each of which is, at the particular time, the amount that is (a) an amount outstanding as or on account of a debt or other obligation that is owed by the particular ultimate funder under a relevant funding arrangement, (b) the fair market value of a particular property referred to in subparagraph (3.1)(c)(ii) in respect of which the particular ultimate funder has a specified right under a relevant funding arrangement, or (c) if neither paragraph (a) nor (b) applies at that particular time, nil; D is the average of all amounts each of which is the amount of the particular debt or other obligation outstanding at a time in the relevant period; E is the rate of tax (determined without reference to subsection 214(16)) that would be imposed under this Part on the particular amount if the particular amount were paid by the taxpayer to the particular ultimate funder at that time; and F is the rate of tax (determined without reference to subsection 214(16)) imposed under this Part on the immediate funder in respect of all or the portion of the particular amount paid or credited to the immediate funder. Back-to-back arrangement — election (3.21) Subsection (3.22) applies in respect of a taxpayer and two or more ultimate funders (referred to in this subsection and subsection (3.22) as the electing ultimate funders ) at any time if (a) at that time, subsection (3.2) applies in respect of the taxpayer; (b) prior to that time, the taxpayer and the electing ultimate funders have jointly filed an election under this subsection; (c) the election designates one of the electing ultimate funders to be the recipient of interest payments that are deemed to be made by the taxpayer under subsection (3.22); (d) at that time, the tax that would be payable under this Part in respect of an interest payment by the taxpayer to the designated ultimate funder is not less than the tax that would be payable under this Part if the interest payment were made by the taxpayer to any of the other electing ultimate funders; and (e) the election has not been revoked prior to that time. Back-to-back arrangement — election (3.22) If this subsection applies at any time in respect of a taxpayer and two or more electing ultimate funders, then each interest payment that would, in the absence of this subsection, have been deemed under subsection (3.2) to have been made at that time by the taxpayer to an electing ultimate funder, and received by the electing ultimate funder from the taxpayer, is deemed to have instead been (a) made by the taxpayer to the designated ultimate funder; and (b) received by the designated ultimate funder from the taxpayer. Excess funding (3.3) Subsection (3.4) applies in respect of a particular relevant funder if the amount determined by the following formula is greater than nil: A – B where A is the total of all amounts each of which is the amount owing by the particular relevant funder, or is the fair market value of a property in respect of which the particular relevant funder has a specified right, under a relevant funding arrangement; and B is the total of all amounts each of which is the amount owed to the particular relevant funder, or is the fair market value of a property in respect of which the particular relevant funder has granted a specified right, under a relevant funding arrangement. Excess funding — deemed funding allocation (3.4) If this subsection applies in respect of a particular relevant funder, for the purposes