100% Capital Cost Allowance on Your Personal or Partnership Business Statement

Legislation has been passed so that taxpayers can claim 100% capital cost allowance on qualifying property purchases from arm's length parties.

For Canadian-resident individuals or a partnership where all the members are individuals: Qualifying assets must be acquired after 31 December 2021 and become available for use before 1 January 2025; or
for Canadian-resident individual or a partnership where not all the members are individuals:
Qualifying assets acquired after 31 December 2021 and become available for use before 1 January 2024.

Assets that qualify as immediate expensing property include all property acquired from a non arm's length party that are subject to the CCA rules, to a maximum of $1.5 million dollars among related groups, EXCEPT for the following classes:
Classes 1 to 6 (e.g., buildings, greenhouses, structures);
Class 14.1 (e.g., goodwill);
Class 17 (e.g., surface construction such as roads);
Class 47 (e.g., transmission or distribution equipment and structures used for transmission or distribution ofelectrical energy);
Class 49 (e.g., pipelines, including monitoring devices, valves, etc. used for the transmission of oil and gas); and
Class 51 (e.g., pipelines, including control and monitoring devices, valves, etc. used to distribute natural gas).

Assets such as vehicles, large tools, stationary farm equipment and computers will qualify.
Taxpayers will be able to choose whether particular eligible assets are
a) immediately expensed under this new measure or
b) subject to regular CCA rates or
c) subject to accelerated investment CCA rates (which will continue to apply for property acquired before 2028).
The total CCA deduction cannot exceed the capital cost of the property.

Other conditions apply so please call us if you are planning to claim 100% on an asset purchased within the allowed time frames. You can refer to our November 1st blog for more information.