Passenger Vehicles (Class 10.1)

Enter the acquisition date for all passenger vehicles you include in class 10.1. This allows the program to determine the amount to add to class 10.1 based on the following threshold:

Note: You may increase the amount on line 203, Current-year addition, with regard to property in class 10.1 by the following amount: the amounts of GST and PST, or HST, applicable to the limit amount minus the GST and PST, or HST input tax credit. The program will calculate this amount. The amount of any government assistance received or entitled to be received must then be deducted from the amount on line 203.

The program only adds an amount to class 10.1 if the acquisition date entered is in the current taxation year of the corporation. For the taxation year following the year of acquisition, the program will roll forward the closing UCC balances for class 10.1 in the usual manner.

For the taxation year during which the vehicle was disposed of, you may deduct half of the amount to which the capital cost allowance would have corresponded if the disposal had not occurred, provided the corporation owned the vehicle at the end of the preceding year.

The program calculates this deduction provided for in subsection 1100(2.5) ITR if a disposal date is entered for the corporation’s current taxation year and if the disposition does not result in a recapture.

It is also possible to claim this deduction when the disposition of a DIEP acquired in a prior taxation year results in a recapture. However, in this situation, the CRA requires that the recapture and the deduction be presented on two separate lines in Schedule 8. Since the program calculates the recapture on the existing copy of Schedule 8 WORKCHART for the property being disposed of, you must create a copy of Schedule 8 WORKCHART to calculate the deduction under subsection 1100(2.5) ITR, which will create a corresponding line in Schedule 8.

In the new copy of Schedule 8 WORKCHART, you will need to enter the following data from the existing copy of Schedule 8 WORKCHART for the Class 10.1 property:

• All the data from the Acquisition subsection;

• All the data from the Disposition subsection, except for the Proceeds of disposition field, where you must enter 0 to allow the calculation of the deduction under 1100(2.5) ITR as if the property had not been disposed of;

• The amounts on lines 201, 205, 221 and 222.

Please note that when rolling forward a client file, the two copies of Schedule 8 WORKCHART related to the disposed property will not be retained.

Note: CCA, Class 10.1 ‒ A passenger vehicle that was acquired and disposed of in the same taxation year must not be added to class 10.1, because no capital cost allowance is allowed with regards to this passenger vehicle for the year.

For current year acquisitions, enter the purchase cost of the passenger vehicle before GST and PST, or HST on the line Purchase cost, before GST and PST, or HST.

Enter the amount of GST or HST paid on purchase on the line GST or HST payable on purchase, without taking into account the GST or HST input tax credit or rebate received with regard to the appropriate passenger vehicle.

HST: Harmonized Sales Tax

Provinces that converted to HST are: Nova Scotia, New Brunswick, Newfoundland and Labrador, Prince Edward Island and Ontario.

Enter the amount of PST paid on purchase on the line PST payable on purchase, net of the PST input tax credit or rebate received with regard to the passenger vehicle.

Enter the GST or HST input tax credit or rebate received with regard to the passenger vehicle on the line GST or HST input tax credit/rebate.  

Note: The GST or HST input tax credit or rebate is generally limited to the GST or the HST payable on the limit amount.

Enter the PST input tax credit or rebate received regarding to the passenger vehicle on the line PST input credit/rebate.

Note: The PST input tax credit or rebate is generally limited to the PST payable on the limit amount.

The line Trade-in value allows the program to determine the exact amount of PST applicable to the limit and to take it into account when calculating the amount on line 203, in accordance with the CRA interpretation of Regulation 7307 of the Income Tax Act.

If the PST is charged on the net cost of a vehicle (including the trade-in value), enter the trade-in value of the vehicle on the appropriate line.

Note: If there is no trade-in, or if in the province where the vehicle has been purchased, the PST is charged on the gross cost of the vehicle (without taking the trade-in value into account), leave the Trade-in value line BLANK.

Enter the amount of any government assistance received or entitled to be received at the time of acquisition in respect of the vehicle in the field Government assistance received or entitled to be received. In accordance with subsection 13(7.1) ITA, this amount will be deducted from the original capital cost, after the application of the limit described in the Acquisition Date section above.

Where the vehicle, that is a DIEP, is disposed of to a person or partnership with which the taxpayer deals at arm’s length, according to subparagraph 13(7)(i)(ii) ITA, the actual proceeds of disposition are multiplied by the ratio corresponding to the capital cost of the vehicle divided by the result of the following formula:

D + (E + F) – (G + H)

where

D is the cost to the taxpayer of the vehicle,

E is the amount determined under paragraph 13(7.1)(d) ITA in respect of the vehicle at the time of disposition,

F is the maximum amount determined for C in the UCC definition set out in subsection 13(21) ITA in respect of the vehicle,

G is the amount determined under paragraph 13(7.1)(f) ITA in respect of the vehicle at the time of disposition, and

H is the maximum amount determined for J in the UCC definition set out in subsection 13(21) ITA in respect of the vehicle.

When the date of disposition is part of the taxation year and the answer to the question Was the property a DIEP in a prior taxation year? is Yes, complete the fields under the Part Proceeds of disposition for a passenger vehicle (DIEP in a prior taxation year only). The amount on line 207, Proceeds of disposition, corresponds to the lesser of the amount indicated in the field Original capital cost (line 203 in the taxation year of the acquisition) and the amount indicated in the field Applicable proceeds of disposition, when the result of this calculation is greater than the available UCC, to calculate the recapture of CCA for a passenger vehicle that is a DIEP under subsection 13(2) ITA. In other situations, line 207 is calculated to 0.

When rolling forward a file in which a passenger vehicle has been acquired in the taxation year and for which the answer to the question Is the property a designated immediate expensing property (DIEP) for the taxation year? is Yes, the amount rolled forward in the field Original capital cost (line 203 in the taxation year of the acquisition) will correspond to the amount entered on line 203, Current-year additions. This amount will then be rolled forward until the vehicle is disposed of.