Words and Phrases - "acquire"
GST New Memorandum 8.1, ITCs—General Eligibility Rules, May 2005
Meaning of “acquire”
9. The word “acquire” is not defined in the Act. The ordinary dictionary definition of the term “acquire” is to get, obtain, have control over or possess. With respect to property, relevant case law indicates that property is acquired by obtaining ownership or such normal aspects of ownership as possession, use or risk.
Acquiror usually recipient
62. … The person that is eligible to claim the ITC for the tax paid or payable on the property or service is usually the recipient.
Williams v. The Queen, 97 DTC 887 (TCC) (Informal Procedure)
When the taxpayer exercised stock option rights, he did so as nominee for others. Accordingly, he had not "acquired" (i.e., obtained for himself) the shares and, accordingly, was not taxable.
Canada v. Morin, 2006 DTC 6057, 2006 FCA 25
The taxpayer entered into an arrangement with a consultant ("Bobsan") under which Bobsan would recommend to him firms within the high-tech area to whom the taxpayer might apply for a position, and the taxpayer agreed to pay Bobsan the first $100,000 of any employee stock option benefits realized by him from such an employer, plus 1/3 of the excess over $100,000. In finding that an amount paid by the taxpayer to Bobsan pursuant to this arrangement did not qualify as an "amount ... paid by the employee to acquire the right to acquire ... securities" for purposes of s. 7(1)(a)(iii), so that the amount so paid was not deductible under s. 7(1)(a)(iii), Malone J.A. stated (at p. 6059) that:
"An amount paid to acquire property is an amount paid in exchange for title to the property or in exchange for the incidents of title, and here is apparent that the payments made by the taxpayer to Bobsan were not made to acquire the stock options, which instead were received directly from the employer to whom he had been referred by Bobsan, and he was not required to pay any money to that employer for the options."
Kowdrysh v. The Queen, 2001 DTC 5221, 2001 FCA 34
Létourneau J.A. found that in the context of the temporary program for qualified small-business property, the proper interpretation of the word "acquired" refers to the time when farming equipment was purchased by means of a binding and enforceable contract, rather than the later time at which beneficial ownership passed to the purchaser.
Fortin & Moreau Inc. v. The Queen, 90 DTC 1450 (TCC)
The Quebec taxpayer was found to have "acquired" trucks pursuant to leases given that it had possession and use of the trucks, it had assumed all risks, it had the option, six months before the expiry of the lease, to purchase the trucks for an amount approximately equal to the fair market value of the remaining lease payment, and it was required to pay the "rent" even if the trucks were destroyed or it no longer had the use of them. However, the taxpayer was found not to be the "owner" of the trucks because, under the Quebec Civil Code, ownership could not be divided between a legal and beneficial owner, and the lessor rather than the taxpayer was the legal owner. Because the definition of "depreciable property" in its amended form required ownership of the property, the taxpayer was not entitled to claim capital cost allowance.