24 Oct Immediate Expensing Reminder

Budget 2021 allowed the immediate expensing of certain property acquired by Canada Controlled Private Corporations (CCPCs). Eligible property would include property that is subject to the capital cost allowance (CCA) rules, other than Class 1 to 6, 14.1, 17, 47, 49, and 51 (generally long-lived assets). The eligible property would be acquired after April 18, 2021 up to January 1, 2024 to a maximum amount of $1.5 million per year (shared between associated companies).

As we are coming up on the deadline for CCPCs, we wanted to remind our clients that the capital asset has to be acquired and “available for use” prior to December 31, 2023 to be eligible for these immediate expensing rules.  There is no carry forward of any unused amount.

Individuals or Canadian partnerships where all the partners are individuals have until December 31, 2024 to make these purchases (as they were not eligible for these rules until a year later).

For purchases after the deadline, the taxpayer would revert back to the previous CCA rules and rates.  These CCA rates were previously accelerated, so the regular half-year rule would not currently apply.