Passenger vehicle CCA limits (Class 10.1)

A buyer of a vehicle-heavy business meets this term when assigning asset values, because a vehicle’s tax cost for CCA can differ from what was paid. The CRA’s T4002 guide says to include passenger vehicles in Class 10 unless they meet the Class 10.1 conditions, and to list each Class 10.1 vehicle separately.

How the limit works

Regulation 7307(1) fixes the prescribed amount by when the vehicle was acquired or leased, and adds the federal and provincial sales taxes that would have been payable on that amount. The CRA’s guide says the recapture and terminal loss rules do not apply to Class 10.1 passenger vehicles unless they are designated immediate expensing property. It also says eligible zero-emission vehicles that would otherwise fall in Class 10 or 10.1 go in Class 54, unless the taxpayer elects not to include them there.

What to check

• Each vehicle’s class and acquisition date in the seller’s CCA schedule
• Whether any vehicle was zero-emission, or is leased
• How the purchase price allocation treats vehicles, and what its undepreciated capital cost is

Related reading is capital cost allowance, terminal loss and the answer on purchase price allocation.