Undepreciated capital cost (UCC) is the remaining, unclaimed depreciable balance of a capital cost allowance class. It equals the original capital cost of the property in the class, less all capital cost allowance claimed to date, adjusted for additions and dispositions within the class.
UCC drives two outcomes. It sets the maximum capital cost allowance available in future years, and it determines whether a disposition produces recapture (proceeds above UCC) or a terminal loss (proceeds below UCC, with no property left in the class). Because capital cost allowance is generally optional and claimed on a class basis, tracking UCC accurately for each class is essential to computing both ongoing deductions and the tax consequences of selling depreciable property.