Income Tax Regulations (C.R.C., c. 945)

Regulations are current to 2014-10-27 and last amended on 2014-06-19. Previous Versions

Division IVInclusions In and Transfers Between Classes

Elections to Include Properties in Class 1

  •  (1) In respect of properties otherwise included in any of Classes 2 to 10, 11 and 12 in Schedule II, a taxpayer may elect to include in Class 1 in Schedule II all such properties acquired for the purpose of gaining or producing income from the same business.

Elections to Include Properties in Class 2, 4 or 17

  • (2) Where the chief depreciable properties of a taxpayer are included in Class 2, 4 or 17 in Schedule II, the taxpayer may elect to include in Class 2, 4 or 17 in Schedule II, as the case may be, a property that would otherwise be included in another class in Schedule II and that was acquired by him before May 26, 1976 for the purpose of gaining or producing income from the same business as that for which those properties otherwise included in the said Class 2, 4 or 17 were acquired.

Elections to Include Properties in Class 8

  • (2a) In respect of properties otherwise included in Class 19 or 21 in Schedule II, a taxpayer may, by letter attached to the return of his income for a taxation year filed with the Minister in accordance with section 150 of the Act, elect to include in Class 8 in Schedule II all properties of the said Class 19 or all properties of the said Class 21, as the case may be, owned by him at the commencement of the year.

Elections to Include Properties in Class 37

  • (2b) In respect of properties that would have been included in Class 37 in Schedule II had they been acquired after the date on which Class 37 became effective, a taxpayer may, by letter attached to the return of his income for a taxation year filed with the Minister in accordance with section 150 of the Act, elect to include in Class 37 all such properties acquired by the taxpayer before that date.

Elections to Make Certain Transfers

  • (2c) Where a taxpayer has acquired, after May 25, 1976, all or any part of a property of a class in Schedule II (in this subsection referred to as “present class”) and the property or part thereof, if it had been acquired before May 26, 1976, would have been property of a different class in Schedule II (in this subsection referred to as the “former class”) and

    • (a) he was obligated to acquire the property under the terms of an agreement in writing entered into before May 26, 1976,

    • (b) he commenced the construction, manufacture or production of the property before May 26, 1976 or the construction, manufacture or production of the property was commenced under an agreement in writing entered into by him before May 26, 1976, or

    • (c) he acquired the property on or before December 31, 1976 or he was obligated to acquire the property under the terms of an agreement in writing entered into on or before December 31, 1976, if

      • (i) arrangements, evidenced by writing, respecting the acquisition, construction, manufacture or production of the property had been substantially advanced before May 26, 1976, and

      • (ii) he had, before May 26, 1976, demonstrated a bona fide intention to acquire the property,

    the taxpayer may, by letter attached to the return of his income filed with the Minister in accordance with section 150 of the Act, for the taxation year in which the property was acquired or for the immediately following taxation year, elect to transfer in the year of acquisition

    • (d) the property or the part thereof, acquired after May 25, 1976, from the present class to the former class; or

    • (e) the part of the property acquired before May 26, 1976, from the former class to the present class.

  • (2d) Where a taxpayer has

    • (a) disposed of a property (in this subsection referred to as the “former property”) of a class in Schedule II (in this subsection referred to as the “former class”), and

    • (b) before the end of the taxation year in which the former property was disposed of, acquired property (in this subsection referred to as the “new property”) of a class in Schedule II (in this subsection referred to as the “present class”) and the present class is neither

      • (i) the former class, nor

      • (ii) a separate class described in section 1101, other than subsection 1101(5d),

    such that

    • (c) if the former property had been acquired at the time that the new property was acquired and from the person from whom the new property was acquired, the former property would have been included in the present class, and

    • (d) if the new property had been acquired at the time that the former property was acquired and from the person from whom the former property was acquired, the new property would have been included in the former class,

    the taxpayer may, by letter attached to the return of income of the taxpayer filed with the Minister in accordance with section 150 of the Act in respect of the taxation year in which the former property was disposed of, elect to transfer the former property from the former class to the present class in the year of its disposition and, for greater certainty, the transfer shall be considered to have been made before the disposition of the property.

Transfers from Class 40 to Class 10

  • (2e) For the purposes of this Part and Schedule II, where property of a taxpayer would otherwise be included in Class 40 in Schedule II, all such properties owned by the taxpayer shall be transferred from Class 40 to Class 10 immediately after the commencement of the first taxation year of the taxpayer commencing after 1989.

Elections to Include Properties in Class 1, 3 or 6

  • (2f) In respect of properties otherwise included in Class 20 in Schedule II, a taxpayer may, by letter attached to the return of income of the taxpayer for a taxation year filed with the Minister in accordance with section 150 of the Act, elect to include in Class 1, 3 or 6 in Schedule II, as specified in the letter, all properties of Class 20 in Schedule II owned by the taxpayer at the commencement of the year.

Transfers to Class 8, Class 10 or Class 43
  • [SOR/2005-371, s. 3]

  • (2g) For the purposes of this Part and Schedule II, where one or more properties of a taxpayer are included in a separate class pursuant to an election filed by the taxpayer in accordance with subsection 1101(5q), all the properties in that class immediately after the beginning of the taxpayer’s fifth taxation year beginning after the end of the first taxation year in which a property of the class became available for use by the taxpayer for the purposes of subsection 13(26) of the Act shall be transferred immediately after the beginning of that fifth taxation year from the separate class to the class in which the property would, but for the election, have been included.

Elections Not to Include Properties in Class 44

  • (2h) A taxpayer may, by letter attached to the taxpayer’s return of income filed with the Minister in accordance with section 150 of the Act for the taxation year in which a property was acquired, elect not to include the property in Class 44 in Schedule II.

Election to Include Properties in Class 35

  • (2i) In respect of any property otherwise included in Class 7 in Schedule II because of paragraph (h) of that Class and to which paragraph 1100(1)(z.1a) and subsection 1101(5d), or paragraph 1100(1)(z.1c) and subsection 1101(5d.2), would apply if Class 35 of that Schedule applied to the property, the taxpayer may (by letter attached to the taxpayer’s return of income filed with the Minister in accordance with section 150 of the Act for the taxation year in which the property was acquired) elect to include the property in Class 35 rather than in Class 7.

Election Rules

  • (3) To be effective in respect of a taxation year, an election under this section must be made not later than the last day on which the taxpayer may file a return of his income for the taxation year in accordance with section 150 of the Act.

  • (4) An election under paragraph 1102(8)(d) or (9)(d) or this section shall be effective from the first day of the taxation year in respect of which the election is made and shall continue to be effective for all subsequent taxation years.

  • (5) An election under subsection (1) or (2) shall be made by sending a letter to that effect by registered mail to the Tax Centre at which the taxpayer customarily files the returns required by section 150 of the Act.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending regulations. SOR/78-377, s. 9;
  • SOR/82-265, s. 3;
  • SOR/83-340, s. 3;
  • SOR/90-22, s. 4;
  • SOR/91-196, s. 3;
  • SOR/91-673, s. 3;
  • SOR/94-170, s. 3;
  • SOR/97-377, s. 3;
  • SOR/2005-371, s. 3;
  • SOR/2007-116, s. 2.