Class 12 (CCA tools and small equipment)

An asset buyer allocating price to tools, utensils and small equipment meets this class. The class covers property not included in any other class: among other items, the regulation names chinaware, cutlery and other tableware, linen, uniforms, and dies, jigs, patterns, moulds and lasts, and sets cost limits for the utensil, instrument and tool paragraphs. See why buyers prefer asset purchases for tax reasons.

Where the edges are

The tool paragraph excludes electronic communication devices and electronic data processing equipment acquired after a set date that can be used for purposes beyond measuring, locating and calculating. The software paragraph excludes systems software and the property described in paragraph (s); systems software for general-purpose computers is in Class 50. The CRA says most small tools in Class 12 are not subject to the half-year rule, but that dies, jigs, patterns, moulds, lasts, the cutting or shaping part of a machine, and software in Class 12 are.

What to ask

• The seller’s asset list by item and cost, since the utensil, instrument and tool paragraphs turn on cost
• Which items are software, and whether any is systems software
• How the agreement’s price allocation describes tools and small equipment
• Whether the buyer’s accountant agrees with the class chosen for each group of assets