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ARTICLE · 21 OCTOBER 2022

A Primer On ABIL Claims: Part I

Miller Thomson
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This article will be the first in a series of articles that discuss the Allowable Business Investment Loss ("ABIL"), including the interpretation of key terms as well as a discussion of recent case law.

CanadaTax
Bryant Frydberg
Bryant Frydberg
Evelyne Vacy-Lyle
Evelyne Vacy-Lyle
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What is an ABIL?

This article will be the first in a series of articles that discuss the Allowable Business Investment Loss ("ABIL"), including the interpretation of key terms as well as a discussion of recent case law.

Where a taxpayer's adjusted cost base ("ACB") of a debt to a creditor or of shares in a corporation is greater than the fair market value of the debt or the share, upon a disposition of the debt or shares a capital loss may be available. If a capital loss is available, the taxpayer may be able to claim an ABIL.

An ABIL claim is equal to 50% of the taxpayer's business investment loss. Generally, any unapplied portion of an ABIL becomes a non-capital loss that can be carried back 3 years and carried forward 10 years.

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