Finance proposes to grandfather post-2016 proceeds from pre-March 22, 2016 ECP dispositions
A CCPC disposed of eligible capital property (ECP) before the Budget 2016 date, but with part of the proceeds not becoming receivable until after 2016, which meant that they were subject to the refundable tax regime.
In response, Finance indicated that it would recommend that a taxpayer may elect respecting a disposition of ECP that occurred before March 22, 2016 so that, where an amount becomes receivable after 2016 and before 2024 as proceeds of disposition upon the satisfaction of a condition that was part of the agreement under which the disposition was made, then the resulting gain, rather than being a capital gain, will instead be governed by the old ECP regime (i.e., ½ recognized as business income, and the other ½ added to the taxpayer's capital dividend account). The taxpayer must file this election by the filing-due date for its first taxation year that ends after September 30, 2019.
Neal Armstrong. Summary of 29 July 2019 Finance Comfort Letter TL-24 entitled “Eligible Capital Property (ECP) Transitional Issue” under s. 14(1).