Income Tax Act — I-3.3 18
 taxpayer is deemed for the year to be equal to the same proportion of the cost to the taxpayer of the property (determined without reference to this subsection) that the proportion of the use or holding made of the property in the course of carrying on business in Canada in the year is of the whole use or holding made of the property in the year; and (b) if a corporation or trust is deemed to own a portion of a property of a partnership because of subsection (7) at any time, (i) the property is deemed to have, at that time, a cost to the corporation or trust equal to the same proportion of the cost of the property to the partnership as the proportion of the debts and other obligations to pay an amount of the partnership allocated to it under subsection (7) is of the total amount of all debts and other obligations to pay an amount of the partnership, and (ii) in the case of a partnership that carries on business in Canada, the corporation or trust is deemed to use or hold the property in the course of carrying on business in Canada to the extent the partnership uses or holds the property in the course of carrying on business in Canada for the fiscal period of the partnership that includes that time. Rules — trust income (5.4) For the purposes of this Act, a trust resident in Canada may designate in its return of income under this Part for a taxation year that all or any portion of an amount paid or credited as interest by the trust, or by a partnership, in the year to a non-resident person is deemed to be income of the trust that has been paid to the non-resident person as a beneficiary of the trust, and not to have been paid or credited by the trust or the partnership as interest, to the extent that an amount in respect of the interest (a) is included in computing the income of the trust for the year under paragraph 12(1)(l.1); or (b) is not deductible in computing the income of the trust for the year because of subsection (4). Back-to-back loan arrangement (6) Subsection (6.1) applies at any time in respect of a taxpayer if at that time (a) the taxpayer has a particular amount outstanding as or on account of a particular debt or other obligation to pay an amount to a person (in this subsection and subsection (6.1) referred to as the “intermediary”); (b) the intermediary is neither (i) a person resident in Canada with whom the taxpayer does not deal at arm’s length, nor (ii) a person that is, in respect of the taxpayer, described in subparagraph (a)(i) of the definition outstanding debts to specified non-residents in subsection (5); (c) the intermediary or a person that does not deal at arm’s length with the intermediary (i) has an amount outstanding as or on account of a debt or other obligation to pay an amount to a particular non-resident person that is, in respect of the taxpayer, described in subparagraph (a)(i) of the definition outstanding debts to specified non-residents in subsection (5) that meets any of the following conditions (in this subsection and subsection (6.1) referred to as the “intermediary debt”): (A) recourse in respect of the debt or other obligation is limited in whole or in part, either immediately or in the future and either absolutely or contingently, to the particular debt or other obligation, or (B) it can reasonably be concluded that all or a portion of the particular amount became owing, or was permitted to remain owing, because (I) all or a portion of the debt or other obligation was entered into or was permitted to remain outstanding, or (II) the intermediary anticipated that all or a portion of the debt or other obligation would become owing or remain outstanding, or (ii) has a specified right in respect of a particular property that was granted directly or indirectly by a person that is, in respect of the taxpayer, a particular non-resident person described in subparagraph (a)(i) of the definition outstanding debts to specified non-residents in subsection (5) and (A) the existence of the sp