Tax wiki
s. 35
PART I — Income Tax · DIVISION B — Computation of Income · SUBDIVISION B — Income or Loss from a Business or Property · Special Cases
Prospectors and grubstakers
Not yet annotated · Text current to 2026-06-21 · section last amended 2013-06-26
Current text
Where a share of the capital stock of a corporation
is received in a taxation year by an individual as consideration for the disposition by the individual to the corporation of a mining property or an interest, or for civil law a right, therein acquired by the individual as a result of the individual’s efforts as a prospector, either alone or with others, or
is received in a taxation year
by a person who has, either under an arrangement with a prospector made before the prospecting, exploration or development work or as an employer of a prospector, advanced money for, or paid part or all of, the expenses of prospecting or exploring for minerals or of developing a property for minerals, and
as consideration for the disposition by the person referred to in subparagraph (i) to the corporation of a mining property or an interest, or for civil law a right, therein acquired under the arrangement under which that person made the advance or paid the expenses, or if the prospector’s employee, acquired by the person through the employee’s efforts,
the following rules apply:
notwithstanding any other provision of this Act, no amount in respect of the receipt of the share shall be included
in computing the income for the year of the individual or person, as the case may be, except as provided in paragraph 35(1)(d), or
in computing at any time the amount to be determined for F in the definition cumulative Canadian development expense in subsection 66.2(5) in respect of the individual or person, as the case may be,
in the case of an individual or partnership (other than a partnership each member of which is a taxable Canadian corporation), an amount in respect of the receipt of the share equal to the lesser of its fair market value at the time of acquisition and its fair market value at the time of disposition or exchange of the share shall be included in computing the income of the individual or partnership, as the case may be, for the year in which the share is disposed of or exchanged,
notwithstanding Subdivision C, in computing the cost to the individual, person or partnership, as the case may be, of the share, no amount shall be included in respect of the disposition of the mining property or the interest, or for civil law the right, therein, as the case may be,
notwithstanding sections 66 and 66.2, in computing the cost to the corporation of the mining property or the interest, or for civil law the right, therein, as the case may be, no amount shall be included in respect of the share, and
for the purpose of paragraph 35(1)(d), an individual or partnership shall be deemed to have disposed of or exchanged shares that are identical properties in the order in which they were acquired.
Definitions
(2)In this section,
mining property means
a right, licence or privilege to prospect, explore, drill or mine for minerals in a mineral resource in Canada, or
real property or an immovable in Canada (other than depreciable property) the principal value of which depends on its mineral resource content; (bien minier)
prospector means an individual who prospects or explores for minerals or develops a property for minerals on behalf of the individual, on behalf of the individual and others or as an employee. (prospecteur)
Source: Justice Laws Website. Not an official version.
Historic text
Immediately preceding version, in force from 2004-08-31 to 2013-06-25:
Show the text in force 2004-08-31 to 2013-06-25
Prospectors and grubstakers
35 (1) Where a share of the capital stock of a corporation
(a) is received in a taxation year by an individual as consideration for the disposition by the individual to the corporation of a mining property or interest therein acquired by the individual as a result of the individual’s efforts as a prospector, either alone or with others, or
(b) is received in a taxation year
(i) by a person who has, either under an arrangement with a prospector made before the prospecting, exploration or development work or as an employer of a prospector, advanced money for, or paid part or all of, the expenses of prospecting or exploring for minerals or of developing a property for minerals, and
(ii) as consideration for the disposition by the person referred to in subparagraph 35(1)(b)(i) to the corporation of a mining property or interest therein acquired under the arrangement under which that person made the advance or paid the expenses, or if the prospector was the person’s employee, acquired by the person through the employee’s efforts,
the following rules apply:
(c) notwithstanding any other provision of this Act, no amount in respect of the receipt of the share shall be included
(i) in computing the income for the year of the individual or person, as the case may be, except as provided in paragraph 35(1)(d), or
(ii) in computing at any time the amount to be determined for F in the definition cumulative Canadian development expense in subsection 66.2(5) in respect of the individual or person, as the case may be,
(d) in the case of an individual or partnership (other than a partnership each member of which is a taxable Canadian corporation), an amount in respect of the receipt of the share equal to the lesser of its fair market value at the time of acquisition and its fair market value at the time of disposition or exchange of the share shall be included in computing the income of the individual or partnership, as the case may be, for the year in which the share is disposed of or exchanged,
(e) notwithstanding subdivision c, in computing the cost to the individual, person or partnership, as the case may be, of the share, no amount shall be included in respect of the disposition of the mining property or the interest therein, as the case may be,
(f) notwithstanding sections 66 and 66.2, in computing the cost to the corporation of the mining property or the interest therein, as the case may be, no amount shall be included in respect of the share, and
(g) for the purpose of paragraph 35(1)(d), an individual or partnership shall be deemed to have disposed of or exchanged shares that are identical properties in the order in which they were acquired.
Definitions
(2) In this section,
mining property
bien minier
mining property means
(a) a right, licence or privilege to prospect, explore, drill or mine for minerals in a mineral resource in Canada, or
(b) real property in Canada (other than depreciable property) the principal value of which depends on its mineral resource content; (bien minier)
prospector
prospecteur
prospector means an individual who prospects or explores for minerals or develops a property for minerals on behalf of the individual, on behalf of the individual and others or as an employee. (prospecteur)
- [NOTE: Application provisions are not included in the consolidated text
- see relevant amending Acts and regulations.]
- R.S., 1985, c. 1 (5th Supp.), s. 35
- 2001, c. 17, s. 20
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 35 links to the one before it.
Enacting and amending legislation
- R.S., 1985, c. 1 (5th Supp.), s. 35; 2001, c. 17, s. 20; 2013, c. 34, ss. 99, 100
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. 35.