Income Tax Act — I-3.3 127
operty acquired in such circumstances, and (b) that was first acquired, or that incorporates a property that was first acquired, by a person or partnership (in this subsection referred to as the “original user”) with which the purchaser did not deal at arm’s length at the time at which the purchaser acquired the property, in the original user’s taxation year or fiscal period that includes the particular time (on the assumption that the original user had such a taxation year or fiscal period) or in any of the original user’s 10 preceding taxation years or fiscal periods, there shall be deducted in computing the amount determined under subsection (8) in respect of the purchaser at the end of the fiscal period the lesser of (c) the amount (i) included, in respect of the property, in the investment tax credit of the original user, or (ii) where the original user is a partnership, that can reasonably be considered to have been included in respect of the property in computing the amount determined under subsection (8) in respect of the original user, and (d) the amount determined by applying the percentage that was applied by the original user in determining the amount referred to in paragraph (c) to (i) if the property or the other property is disposed of to a person who deals at arm’s length with the purchaser, the proceeds of disposition of that property, and (ii) in any other case, the fair market value of the property or the other property at the time of the conversion or disposition. Transitional application of investment tax credit recapture (36) For the purpose of applying each of subsection (27) or (29) in respect of a taxpayer, subsection (28) in respect of a partnership or subsection (34) or (35) in respect of a purchaser and an original user, as the case may be, (which taxpayer, partnership or original user is, in this subsection, referred to as the “taxpayer”), the reference to “10” in that subsection is to be read as a reference to the number that is the lesser of (a) 20, and (b) the number that is the total of 10 and the number of taxation years or fiscal periods, as the case may be, by which the number of taxation years or fiscal periods of the taxpayer that have ended after 1997 exceeds 11. [NOTE: Application provisions are not included in the consolidated text; see relevant amending Acts and regulations.] R.S., 1985, c. 1 (5th Supp.), s. 127; 1994, c. 7, Sch. II, s. 104, Sch. VIII, s. 68, c. 8, s. 15, c. 21, s. 61; 1995, c. 3, s. 37; 1996, c. 21, s. 30; 1997, c. 25, s. 35; 1998, c. 19, ss. 33, 146, 306; 1999, c. 22, s. 48; 2000, c. 9, s. 560; 2001, c. 17, ss. 118, 213; 2003, c. 15, s. 81, c. 19, s. 73, c. 28, s. 14; 2004 c. 24, s. 24; 2005, c. 19, s. 28; 2006, c. 4, s. 75, c. 9, s. 64; 2007, c. 2, s. 34, c. 35, s. 43; 2008, c. 28, s. 19; 2009, c. 2, ss. 40, 82; 2010, c. 12, s. 14; 2011, c. 24, s. 40; 2012, c. 19, s. 5, c. 31, s. 27; 2013, c. 33, s. 14, c. 34, s. 269, c. 40, s. 57; 2014, c. 20, s. 18, c. 39, s. 42; 2015, c. 36, s. 12; 2016, c. 7, s. 35; 2017, c. 20, s. 23, c. 33, s. 50; 2018, c. 12, s. 21 2019, c. 29, s. 24 2022, c. 19, s. 22 2024, c. 15, s. 34 2024, c. 17, s. 34 2024, c. 17, s. 80 2026, c. 3, s. 47