Words and Phrases - "property acquired"
Nokes v. Doncaster Amalgamated Collieries Ltd., [1940] A.C. 1014 (HL)
It was held that where a court order was made under the Companies Act 1929, for the amalgamation of two corporations, including an order for the "transfer" of all the "property" of the predecessor corporations to the amalgamated corporation, the court order did not automatically transfer employment contracts between employees and the predecessor corporations to the amalgamated corporation. "Property" was defined in the Companies Act 1929 to include "rights and powers of every description". Lord Chancellor Viscount Simon stated (p. 1024):
"S.154 when it provides for 'transfer' is providing in my opinion for the transfer of those rights which are not incapable of transfer and is not contemplating the transfer of rights which are in their nature incapable of being transferred."
Medland v. Canada, 98 DTC 6358 (FCA)
There was a transfer of property to the taxpayer for purposes of s. 160(1) when her husband, who was the joint mortgagor on a house that at the relevant times, was owned by her, paid monthly amounts due under the mortgage. By virtue of such payments, the taxpayer became less indebted and her equity in the property increased. The words "property" and "transfer" had been broadly defined in the jurisprudence.
Location Gaétan Lévesque Inc. v. MNR, 91 DTC 1380 (TCC)
The taxpayer entered into "leasing contracts" respecting heavy equipment which typically had a term of approximately five years, provided for monthly rental payments, provided that five months before the expiry date the taxpayer could exercise an option to purchase the equipment for a sum equal to the remaining rentals, and provided that the taxpayer was responsible for the maintenance and good condition of the equipment.
Lamarre Proulx TCJ. found (at p. 1384) that the definition of "depreciable property" meant that:
"A taxpayer's depreciable property is property for which he or she has already claimed and received deductions, and in respect of deductions for the current year, it is property which the taxpayer owns at the end of the year."
Furthermore, she found (at p. 1385) that "the words 'property acquired' must be taken to mean property in which the taxpayer has a right of ownership, or if not such a right, then all the attributes of a right of ownership, as in the case of a conditional sale". Accordingly, because the taxpayer neither owned the property nor had acquired it, it was not entitled to capital cost allowance.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Ownership | lessee with purchase option not the beneficial owner | 111 |