After you claim

If your claim is accepted as filed, you will be notified on your notice of assessment or reassessment.

On this page

• If a recapture of your credit is required
• If your claim needs a review
• If you disagree with our decision

Recapture of the CTM ITC

Generally, an amount of the credit you have already received may have to be recaptured for CTM property you acquired in the year or in any of the previous 10 calendar years, if in the tax year the CTM property was:

The recapture amount is calculated based on the proportion of the value of the property that has been utilized prior to its conversion to a non-CTM use, its export, or its disposition.

This recapture amount will not exceed the CTM ITC associated with the particular property.

If a recapture applies to a corporation then it shall add to the tax for the year an amount determined as the lesser of:

• The amount of the CTM ITC, and
• The amount determined by the formula A × (B ÷ C), where
  • A is the CTM ITC of the corporation
  • B is:
    • The proceeds of disposition, where the property is disposed of to a person or partnership who deals at arms length with the taxpayer, or
    • The fair market value of the property if the disposition is to a person or partnership who does not deal at arms length with the taxpayer or if the CTM property is exported from Canada or converted to a non-CTM use; and
  • C is the capital cost of the property on which the CTM ITC was deducted

The conditions are similar for the recapture of a CTM investment tax credit received through a partnership:

• The partnership must have acquired a CTM property in the fiscal period or in any of the ten preceding calendar years
• The cost, or a portion of the cost, of the CTM property must have been included in computing the CTM investment tax credit of a member of the partnership (i.e., the partnership computed a CTM investment tax credit, which is attributable to the property, and allocated that credit to its members)
• In the fiscal period, the partnership must have converted the property (or another property that incorporates the property) to a non-CTM use, exported it from Canada or disposed of it, in each case without having previously exported it or converted it to a non-CTM use

Where a taxpayer is a member of the partnership during the fiscal period: 

• The amount that can reasonably be considered to be the taxpayer’s share of the amount, if any, equal to the lesser of:
  • The amount that can reasonably be considered to have been included in respect of the property in computing the partnership’s credit amount that was available for allocation, and
  • The percentage of the partnership’s credit amount in respect of the property, applied to either the proceeds of disposition of the property (if the property is disposed of to an arm’s length person) or the fair market value of the property at the time the property is converted to a non-CTM use, exported, or disposed of (in any other case)

Taxpayers and partnerships must report recapture events to the CRA in prescribed form and manner by the taxpayer’s filing due-date for the year in which the recapture event occurs or, in the case of a partnership, on or before the day when a return is required by section 229 of the Income Tax Regulations to be filed in respect of the fiscal period of the partnership in which the recapture event occurs.

If your claim needs a review

Some claims may be selected for further review.

If your claim requires a review, it is because the CRA requires further information about the expenditures being claimed.

In some cases, the CRA may request an on-site or virtual meeting to ask further questions or clarify details. You may be asked to provide supporting documents to verify expenses and confirm if you have met the various requirements.

After the CRA finishes reviewing the documents provided, the CRA will provide you with a written summary of the review findings.

If the CRA finds that no changes need to be made to the claim, then no further action is required and the review will be closed.

If the CRA determines that changes need to be made to the claim, you will have 30 days to respond to the written summary of the review findings before the review changes are confirmed and your return is assessed or reassessed.

If you disagree with our decision

If you disagree with the CRA's final decision, you still have some recourse options.

For information about filing an objection, refer to: Resolving disputes

For information about the objection and appeals processes, refer to: Objections and appeal rights under the Income Tax Act