CCA Class Rates and Flashcards
Class 1
Buildings acquired after 1987 (4%)
Election to separate class (i.e., as a result, recapture and terminal loss will arise upon disposition)
[Note: If no election, then at 4%.]
▪ Acquired on or After March 19, 2007 (4%+6%) = 10%: Buildings used for Manufacturing and
Processing
▪ Acquired on or After March 19, 2007 (4%+2%) = 6%: Other Non-Residential Buildings
If acquired before November 21, 2018, half year rule method
If acquired after November 20, 2018, AccII method
Class 3
Buildings Acquired Pre-1988 (5%)
Include in Class 3 the cost of any additions or alterations made after 1987 to a Class 3 building that
does not exceed the lesser of the following two amounts:
* $500,000
* 25% of the building’s capital cost (including the cost of additions or alterations to the
building included in Class 3, Class 6, or Class 20 before 1988)
Any amount that exceeds the lesser amount above is included in Class 1.
As acquired before November 21, 2018, half year rule method
Class 8
Various Machinery, Equipment, and Furniture (20%)
Note the following:
▪ Individual photocopiers, fax machines, and pieces of telephone equipment purchased for
$1,000 or more can be allocated to a separate Class 8 at the election of the taxpayer.
▪ Make election as allows you to trigger terminal loss on disposition
If acquired before November 21, 2018, half year rule method
If acquired after November 20, 2018, AccII method
Class 10
Class 10 – Vehicles (30%)
Class 10 is a 30 percent declining balance class. Common items are motor. passenger vehicles
(other than Class 10.1 – being less than prescribed amount), automotive equipment, trailers,
wagons.
If acquired before November 21, 2018, half year rule method
If acquired after November 20, 2018, AccII method
If acquired March 19, 2019 and a zero emission vehicle, class 54 (see after) with 100% write off in
the year of acquisition.
Class 10.1
Luxury Cars (30%)
Class 10.1 is a class established for passenger vehicles with a cost in excess of an amount
prescribed (plus GST and PST) [see Reg 7307].
Note the following:
▪ Each vehicle must be allocated to a separate Class 10.1.
▪ The addition is limited to the prescribed amount.
▪ In the year in which the vehicle is sold:
* Do not remove amount in disposition grid.
* Rather, 15% CCA (one-half of the normal CCA for the year can be deducted)
[opening UCC multiplied by 15% (i.e., 30% multiplied by ½)].
* No recapture or terminal losses are recognized for tax purposes.
* There will be no balance in the class at the end of the year.
Class 12
Computer Software (Not System Software) and Small Assets (100%) [i.e., Dental and
medical instruments, kitchen utensils, and tools if they are less than $500.]
Therefore, AccII not applicable to Class 12
Note the following:
▪ The half-year rule will apply to assets other than the following class 12 assets (no
AccII):
(a) a book that is a part of a lending library
(b) chinaware, cutlery or other tableware
(c) a kitchen utensil costing less than $500
(e) a medical or dental instrument costing less than $500
(g) linen
(h) a tool costing less than $500
(j) a uniform
(k) rental apparel or costume, including accessories
Class 13
Leasehold Improvements (Straight-Line)
For each improvement/expenditure, the maximum deduction will be the lesser of:
▪ one-fifth of the capital cost of the improvement (if first year, ACCII adjustment); and
▪ the capital cost of the lease improvement, divided by the remaining lease term (including
the first renewal option, if any) and (if first year, ACCII adjustment)
Perform calculation once. The result flows through for each subsequent year other than the first year
because of the half year rule. For instance, if the asset is acquired in 2007, perform the above the
calculation whereby the above result will give you the depreciation for 2008, 2009, etc.
Note the following:
▪ Lease term includes first renewal option;
▪ Half year rule applies for assets acquired before November 21, 2018;
▪ AccII applies for assets acquired after November 20, 2018 but at a rate of 150% on straight
line depreciation (instead of adding 50% to the base)
▪ If lease term exceeds 40 years, it is limited to 40 years [the denominator is limited to 40
which includes the first lease term].
▪ Each expenditure requires a separate calculation
Class 14
Limited Life Intangibles (Straight-Line, No Half-Year Rules Apply: intangible assets
with a limited life [i.e., Patents]
Note the following:
▪ Calculate CCA on a prorated basis [Particular to this class]
▪ No-half year rule for assets acquired prior to November 21, 2018
▪ AccII applies for assets acquired after November 21, 2018
▪ May include patents in class 44 [Need to evaluate which is more beneficial].
Class 29
Manufacturing and Processing Assets (50% - Straight line)
▪ Manufacturing Equipment (acquired after March 18, 2007 and before 2016)
▪ CCA would be taken on the acquisition cost of the assets (i.e., rate x acquisition cost
factoring the half-year rule for first year, rate x acquisition cost for Year 2 and the balance
of UCC in Year 3).
▪ If disposition and balance is -, then recapture.
▪ If disposition and balance is +, and no assets left in the class, a terminal loss would arise
Class 53
Manufacturing and Processing Assets after 2015/starting in 2016 (50% - Declining
Balance).
If acquired before November 21, 2018, half year rule method
If acquired after November 20, 2018, AccII method but at 100% rather than 50%
* meaning with AccII adding 100% to CCA base (instead of 50%), 100% write-off in the year
of acquisitions)
Class 43
Manufacturing and Processing Assets (30%) (acquired before March 19, 2007)
Note the following:
▪ Manufacturing and processing assets purchased for $1,000 or more can be allocated to a
separate Class 43.
Class 44
Patents (25%)
They are subject to write-off at a 25 percent declining balance rate.
Must elect, otherwise class 14
Evaluate whether class 14 will provide a better result.
If acquired before November 21, 2018, half year rule method
If acquired after November 20, 2018, AccII method
Class 50
Computer Hardware And Systems Software (55%).
Computer hardware and systems software acquired after January 31, 2011 (55%).
If acquired before November 21, 2018, half year rule method
If acquired after November 20, 2018, AccII method
Classes 54 and 55
Zero Emission Vehicles:
– Class 54 for vehicles that were in Classes 10 and 10.1
– Class 55 for vehicles that were in Class 16 (taxis)
– Can write off 100% in year of acquisition
- Zero emission passenger vehicle capped at prescribed amount.
- No cap for zero emission vehicles (see class 10 vs 10.1)
– Eligible Vehicles
* Must be vehicle that would be included in Class 10, 10.1, or 16
* Must be fully electric, a plug-in hybrid with a minimum battery capacity of 15
kwh, or a hydrogen powered vehicle
* Must not have been used for any purpose before it was acquired by the taxpayer
