As noted at ¶291-265, a tax charge can arise under these rules if film losses for which an individual is claiming relief exceed that person’s capital contribution.

Essentially, but subject to complications considered below, the individual’s capital contribution is defined (ITA 2007, s. 801) as the amount he has contributed to the trade as capital, less any amounts that the individual:

(1)has previously drawn out or received back;

(2)is entitled to draw out or receive back;

(3)has received by way of reimbursement from another person; or

(4)is entitled to require another person to reimburse to him.

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