Introduction

The purpose of a Chapter History page is to highlight any amendments to the information contained in a chapter of an income tax folio, including amendments to the information originally contained in an interpretation bulletin that has been cancelled and replaced with a folio chapter. It outlines amendments that have been made as a result of legislative changes and proposed legislative changes, precedential court decisions, as well as new or revised interpretations of the Canada Revenue Agency (CRA).

Except as otherwise noted, all statutory references herein are references to provisions of the Income Tax Act, R.S.C., 1985, c.1 (5th Supp.), as amended and all references to a Regulation are to the Income Tax Regulations, C.R.C., c. 945, as amended.

Update April 8, 2019

General

Income Tax Folio S3-F3-C1, Replacement Property, replaces and cancels Interpretation Bulletin IT-259R4, Exchange of Property and Interpretation Bulletin IT-491, Former Business Property together with its special release, IT-491SR.

In addition to consolidating the content of the former interpretation bulletin, general revisions have been made to improve readability. Any substantive technical and interpretive changes to the information outlined in the former interpretation bulletin are described below.

All references to section 14 have been removed in connection with the repeal of the eligible capital property rules by S.C. 2016, c.12, s.4 (Bill C-29).

Legislative and other changes

¶1.6 (formerly ¶2 of IT-259R4) has been updated for paragraph 44(1)(c) which was amended by S.C. 2013, c.34, s.186(1) (Bill C-48).

¶1.7 (formerly ¶2 of IT-259R4) has been updated for paragraph 44(1)(d) which was amended by S.C. 2013, c.34, s.186(1) (Bill C-48).

¶1.18 (formerly ¶5 of IT-259R4) has been updated for bijural amendments to the portion of subsection 44(6) before paragraph (a) by S.C. 2013, c.34, s.104 (Bill C-48).

¶1.22 (formerly ¶5 of IT-259R4) has been updated for paragraph 44(7)(c) which was added by S.C. 2013, c. 34, s. 186(2) (Bill C-48) and amended by S.C. 2013, c.40, s.20 (Bill C-4).

¶1.23 (formerly ¶6 of IT-259R4) has been updated for subsections 73(3) and 73(3.1) which were amended by S.C. 2007, c.2, s.11(3) (Bill C-28).

¶1.27 (formerly ¶1 of IT-259R4) has been updated for bijural amendments to the definition of former business property in subsection 248(1) by S.C. 2013, c.34, s.167(3) (Bill C-48), in force June 26, 2013 and for amendments by S.C. 2013, c.34, s.358(16) (Bill C-48) applicable in respect of dispositions and terminations that occur after December 20, 2002. The content contained in ¶1 of IT-491SR has been removed since the general discussion of deferring recognition of a capital gain is already covered in this Chapter.

¶1.29 (formerly ¶3 of IT-491SR) has been updated for bijural amendments to the definition of former business property in subsection 248(1) which was amended by S.C. 2013, c. 34, s.167(3) (Bill C-48), in force June 26, 2013 and for amendments by S.C. 2013, c.34, s.358(16) (Bill C-48) applicable in respect of dispositions and terminations that occur after December 20, 2002. The content contained in ¶5 of IT-491 has been removed as the brief comment on the operation of a hotel or motel is content that is not specific to the replacement property rules. The content contained in ¶11 to 13 of IT-259R4 has been removed since the general discussion of replacement property is already covered in this Chapter. The examples contained in ¶27 to 29 of IT-259R4 have been removed since the general concepts illustrated in the examples are already covered in sufficient detail in this Chapter.

¶1.45 to 1.46 have been added to discuss the repeal of the eligible capital property rules and voluntary dispositions of Class 14.1 property.

¶1.47 has been added to include limited-period franchises, concessions or licences.

¶1.52 (formerly ¶10 of IT 491SR) has been amended to add a reference to immovable property to reflect bijuralism and to adjust the wording in the first sentence of ¶1.52 to accommodate that change.