In 2012-0436781E5, the CRA was asked whether a payment received by Company A from Company B in exchange for giving up Company A’s share of leased office space was income (s. 9), a capital gain (s. 39), or an eligible capital amount (s. 14). The CRA said that Company A’s interest in the office space was a leasehold interest, and that the transaction amounted to a sublease to Company B for the entire term. Citing the decision in Sussex Square Apartments v. The Queen, 99 DTC 443, the CRA said this amounted to a disposition of Company A’s leasehold interest, giving rise to a capital gain. The CRA appears to have assumed that Company A had no original cost in its leasehold interest, such that there was no recapture (of prior tax depreciation) arising on the disposition.