Tax wiki
s. 20.4
PART I — Income Tax · DIVISION B — Computation of Income · SUBDIVISION B — Income or Loss from a Business or Property · Deductions
Definitions
Not yet annotated · Text current to 2026-06-21 · section last amended 2009-03-12
Current text
The definitions in section 12.5 apply for the purposes of this section.
Transition year income deduction
(2)There shall be deducted in computing an insurer’s income for its transition year from an insurance business carried on by it in Canada in the transition year the absolute value of the negative amount, if any, of the insurer’s reserve transition amount in respect of that insurance business.
Transition year income inclusion reversal
(3)If an amount has been included under subsection 12.5(2) in computing an insurer’s income for its transition year from an insurance business carried on by it in Canada, there shall be deducted in computing the insurer’s income, for each particular taxation year of the insurer that ends after the beginning of the transition year, from that insurance business, the amount determined by the formula
A × B/1825
where
is the amount included under subsection 12.5(2) in computing the insurer’s income for the transition year from that insurance business; and
is the number of days in the particular taxation year that are before the day that is 1825 days after the first day of the transition year.
Ceasing to carry on business
(4)If at any time an insurer ceases to carry on all or substantially all of an insurance business (referred to in this subsection as the “discontinued business”), and none of subsections 12.5(4) to (6) apply, there shall be deducted in computing the insurer’s income from the discontinued business for the insurer’s taxation year that includes the time that is immediately before that time, the amount determined by the formula
A – B
where
is any amount included under subsection 12.5(2) in computing the insurer’s income from the discontinued business for its transition year; and
is the total of all amounts each of which is an amount deducted under subsection (3) in computing the insurer’s income from the discontinued business for a taxation year that began before that time.
Source: Justice Laws Website. Not an official version.
Historic text
This section has not been amended since it was enacted (2009, c. 2, s. 8), so there is no earlier version.
Earlier versions: Justice Laws point-in-time versions of the Act (from 31 August 2004), and CanLII (under “Versions”). On Justice Laws, each version of section 20.4 links to the one before it.
Enacting and amending legislation
- 2009, c. 2, s. 8
Text before 2004 is found in the annual Statutes of Canada cited above. Application and coming-into-force provisions are not part of the consolidation; see the amending Acts.
Cross-references
Citation
Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), s. 20.4.