Income Tax Act — I-3.3 127.49
e received) is to be added to the cost to the taxpayer of a separate CTM property that is deemed to be acquired in the particular year for the purposes of this section, provided that a transaction or event described in paragraph (11)(c) has not occurred in respect of the particular property. Partnerships (8) Subject to section 127.47, where, in a particular taxation year of a qualifying taxpayer that is a member of a partnership, an amount would be determined under subsection (2) in respect of the partnership, for its taxation year that ends in the particular year, if the partnership were a qualifying taxpayer and its fiscal period were its taxation year, the portion of that amount that can reasonably be considered to be the taxpayer’s share thereof shall be added in computing the CTM investment tax credit of the taxpayer at the end of the particular year. Unpaid amounts (9) For the purposes of this section, where any part of the capital cost of a taxpayer’s particular CTM property is unpaid on the day that is 180 days after the end of the taxation year in which a deduction in respect of a CTM investment tax credit would otherwise be available in respect of the particular property, such amount is to be (a) excluded from the capital cost of the particular property in the year; and (b) added to the capital cost of a separate CTM property that is deemed to be acquired at the time the amount is paid, provided that a transaction or event described in paragraph (11)(c) has not occurred in respect of the particular property. Tax shelter investment (10) Subsection (2) does not apply if a CTM property – or an interest in a person or partnership that has, directly or indirectly, an interest in, or for civil law, a right in, such property – is a tax shelter investment for the purpose of section 143.2. Recapture — conditions for application (11) Subsection (12) applies in a taxation year if (a) a taxpayer acquired a CTM property in the year or any of the preceding 10 calendar years; (b) the taxpayer became entitled to a CTM investment tax credit in respect of the capital cost, or a portion of the capital cost, of the property; and (c) in the year, the property (or another property that incorporates the property) is converted to a non-CTM use, is exported from Canada or is disposed of without having been previously exported or converted to a non-CTM use. Recapture of credit (12) If this subsection applies, there shall be added to the taxpayer’s tax otherwise payable under this Part for the year the lesser of (a) the amount of the taxpayer’s CTM investment tax credit in respect of the property, and (b) the amount determined by the formula A × (B ÷ C) where A is the amount of the taxpayer’s CTM investment tax credit in respect of the property, B is (i) in the case where the property is disposed of to a person or partnership who deals at arm’s length with the taxpayer, the proceeds of disposition of the property, or (ii) in the case where the property is disposed of to a person or partnership who does not deal at arm’s length with the taxpayer, is converted to a non-CTM use or is exported from Canada, the fair market value of the property, and C is the capital cost of the property on which the CTM investment tax credit was deducted. Certain non-arm’s length transfers (13) Subsections (11) and (12) do not apply to a taxpayer (in this subsection referred to as the “transferor”) that disposes of a property to a qualifying taxpayer (in this subsection referred to as the “purchaser”) related to the transferor, if the purchaser acquired the property in circumstances where the property would be CTM property to the purchaser (but for paragraph (b) of the definition CTM property in subsection (1)) and is used by the purchaser for a CTM use. Certain non-arm’s length transfers — recapture deferred (14) If subsections (11) and (12) do not apply because of subsection (13), subsection 127(34) applies with such modifications as the circumstances require, in