Income Tax Act — I-3.3 66.7
ccessor in computing its income for a taxation year an amount not exceeding the total of all amounts each of which is an amount determined in respect of an original owner of the particular property that is the lesser of (a) 10% of the amount, if any, by which (i) the cumulative Canadian oil and gas property expense of the original owner determined immediately after the disposition of the particular property by the original owner to the extent it has not been (A) deducted by the original owner or any predecessor owner of the particular property in computing income for any taxation year, (A.1) otherwise deducted in computing the income of the successor for the year, or (B) deducted by the successor in computing its income for any preceding taxation year exceeds the total of (ii) the total of all amounts each of which is an amount (other than any portion thereof that can reasonably be considered to result in a reduction of the amount otherwise determined under this paragraph or paragraph 66.7(4)(a) in respect of another original owner of a relevant oil and gas property who is not a predecessor owner of a relevant oil and gas property or who became a predecessor owner of a relevant oil and gas property before the original owner became a predecessor owner of a relevant oil and gas property) that became receivable by a predecessor owner of the particular property or the successor in the year or a preceding taxation year and that (A) was included by the predecessor owner or the successor in computing an amount determined under paragraph (a) of the description of F in the definition cumulative Canadian oil and gas property expense in subsection 66.4(5) at the end of the year, and (B) can reasonably be regarded as attributable to the disposition of a property (in this subparagraph referred to as a “relevant oil and gas property”) that is the particular property or another Canadian resource property that was acquired from the original owner with the particular property by the successor or a predecessor owner of the particular property, and (iii) the total of all amounts each of which is an amount by which the amount described in this paragraph is required because of subsection 80(8) to be reduced at or before the end of the year, and (b) the amount, if any, by which (i) the part of the successor’s income for the year that can reasonably be regarded as attributable to (A) its reserve amount for the year in respect of the original owner and each predecessor owner of the particular property, or (B) production from the particular property, computed as if no deduction were allowed under section 29 of the Income Tax Application Rules , this section or any of sections 65 to 66.5, except that, where the successor acquired the particular property from the original owner at any time in the year (otherwise than by way of an amalgamation or merger or solely because of the application of paragraph 66.7(10)(c)) and did not deal with the original owner at arm’s length at that time, the amount determined under this subparagraph shall be deemed to be nil, exceeds the total of (ii) all other amounts deducted under subsection 29(25) of the Income Tax Application Rules , this subsection and subsections 66.7(1), 66.7(3) and 66.7(4) for the year that can reasonably be regarded as attributable to the part of its income for the year described in subparagraph 66.7(5)(b)(i) in respect of the particular property, and (iii) all amounts added because of subsection 80(13) in computing the amount determined under subparagraph 66.7(5)(b)(i). Where s. 29(25) of ITAR and ss. (1) to (5) do not apply (6) Subsection 29(25) of the Income Tax Application Rules and subsections 66.7(1) to 66.7(5) do not apply (a) in respect of a Canadian resource property or a foreign resource property acquired by way of an amalgamation to which subsection 87(1.2) applies or a winding-up to which subsection 88(1.5) applies; or (b) to permit, in respect of the acquisition by a corporation befor