Does the assignment of the business limit under s. 125(3.2) occur before or after the business limit reduction in s. 125(5.1)? After noting that under s. 125(5.1) “the business limit … is reduced on a straight-line basis if the total of the taxable capital of the CCPC (employed in Canada) and, if applicable, of [associated] corporations … exceeds $10 million … [so that] once the taxable capital … reaches $15 million its business limit would be zero,” CRA stated:.
[T]he use of the word “notwithstanding” in subsection 125(5.1) ensures that any assignment of a CCPC’s business limit under subsection 125(3.2) can only occur after its business limit under subsection (2), (3), or (4) is first reduced by subsection 125(5.1).