BUSINESS PROPERTY s.248: “Business” includes a capital property: Purchaser acquires property to profession, calling, trade, hold it and earn income and then later sells it for manufacture or undertaking of capital gain any kind whatever and…an By nature creates income; shares, real adventure or concern in the property.. nature of trade 248(1): Property: “property of any kind whatever but does not include an office whether real or personal or corporeal or or employment incorporeal”. (also see specific inclusions under def) It is anything that occupies the Income from property is passive, it does not time, attention and labour of a require the owner of the property to devote time person for the purpose of profit and energy in order to earn the income. (Smith) and refers to active, Doesn’t require extensive businesslike intervention activity. Income from property does not include gains or Generally established by case losses made on dispositions of property, which are law that a business is an taxed separately as capital gains (9(3)) organized activity, carried on commercial activity which falls short of being a for purpose of profit (Stewart) business may nevertheless be a source of property income. (Stewart) Where this becomes an issue: Interest can be from either (Walsh) Rental income can be either ( ) Why the distinction is important: Important if income is earned by a CCPC, because to be eligible for the small business rate of 13.5%, the income must come from: CCPC’s 125(7): business carried on by a not SIB or PSB “active corporation” NOT property income
BUSINESS s.248: “Business” includes a profession, calling, trade, manufacture or undertaking of any kind whatever and…an adventure or concern in the nature of trade but does not include an office or employment It is anything that occupies the time, attention and labour of a person for the purpose of profit (Smith) and refers to active, activity. Generally established by case law that a business is an organized activity, carried on for purpose of profit (Stewart) PROPERTY capital property: Purchaser acquires property to hold it and earn income and then later sells it for capital gain By nature creates income; shares, real property.. 248(1): Property: “property of any kind whatever whether real or personal or corporeal or incorporeal”. (also see specific inclusions under def) Income from property is passive, it does not require the owner of the property to devote time and energy in order to earn the income. Doesn’t require extensive businesslike intervention Income from property does not include gains or losses made on dispositions of property, which are taxed separately as capital gains (9(3)) commercial activity which falls short of being a business may nevertheless be a source of property income. (Stewart) Where this becomes an issue: Interest can be from either (Walsh) Rental income can be either ( ) Why the distinction is important: Important if income is earned by a CCPC, because to be eligible for the small business rate of 13.5%, the CCPC’s income must come from: 125(7): “active business carried on by a corporation” not SIB or PSB NOT property income
286-Jamieson-Law345-Final.docx