The half-year rue restricts the capital cost allowance (CCA) on net acquisitions (consisting of additions for the year less the lesser of original cost and proceeds of disposition for the year) in the year to one-half of the normal claim.
The half-year rule was introduced on November 13, 1981. Before the introduction of this rule, depreciable property could be acquired at or near the end of the fiscal year and a full year’s claim could be made. The half-year rule has the effect of arbitrarily fixing the date of all acquisitions at the middle of the taxation year.
There are a number of exclusions from the half-year rule.