Income Tax Amendments Act, 2000 (S.C. 2001, c. 17)

Assented to 2001-06-14

 The portion of subsection 204.6(2) of the Act before paragraph (a) is replaced by the following:

  • Marginal note:Tax payable

    (2) Where at the end of any month a taxpayer that is a registered investment described in paragraph 204.4(2)(a) or (b) holds property that is a share, bond, mortgage, hypothecary claim or other security of a corporation or debtor (other than bonds, mortgages, hypothecary claims and other securities of or guaranteed by Her Majesty in right of Canada or a province or Canadian municipality), it shall, in respect of that month, pay a tax under this Part equal to 1% of the amount, if any, by which

  •  (1) The portion of clause 212(1)(b)(ii)(C) of the Act before subclause (I) is replaced by the following:

    • (C) bonds, debentures, notes, mortgages, hypothecary claims or similar obligations

  • (2) Subparagraph 212(1)(b)(viii) of the Act is replaced by the following:

    • (viii) interest payable on a mortgage, hypothecary claim or similar obligation secured by, or on an agreement for sale or similar obligation with respect to, real property situated outside Canada or an interest in any such real property except to the extent that the interest payable on the obligation is deductible in computing the income of the payer under Part I from a business carried on by the payer in Canada or from property other than real property situated outside Canada,

  • (3) Paragraph 212(13)(f) of the Act is replaced by the following:

    • (f) interest on any mortgage, hypothecary claim or other indebtedness entered into or issued or modified after March 31, 1977 and secured by real property situated in Canada or an interest therein to the extent that the amount so paid or credited is deductible in computing the non-resident person’s taxable income earned in Canada or the amount on which the non-resident person is liable to pay tax under Part I,

  • (4) Subsection 212(15) of the Act is replaced by the following:

    • Marginal note:Certain obligations

      (15) For the purposes of subparagraph (1)(b)(ii), after November 18, 1974 interest on a bond, debenture, note, mortgage, hypothecary claim or similar obligation that is insured by the Canada Deposit Insurance Corporation is deemed not to be interest with respect to an obligation guaranteed by the Government of Canada.

  •  (1) The portion of subsection 214(6) of the Act before paragraph (a) is replaced by the following:

    • Marginal note:Deemed interest

      (6) Where, in respect of interest stipulated to be payable, on a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation that has been assigned or otherwise transferred by a non-resident person to a person resident in Canada, subsection 20(14) would, if Part I were applicable, require an amount to be included in computing the transferor’s income, that amount is, for the purposes of this Part, deemed to be a payment of interest on that obligation made by the transferee to the transferor at the time of the assignment or other transfer of the obligation, if

  • (2) Paragraph 214(7)(a) of the Act is replaced by the following:

    • (a) a non-resident person has at any time assigned or otherwise transferred to a person resident in Canada a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation issued by a person resident in Canada,

  • (3) The portion of subsection 214(8) of the Act before paragraph (a) is replaced by the following:

    • Meaning of “excluded obligation”

      (8) For the purposes of subsection (7), “excluded obligation” means any bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation

  • (4) Paragraph 214(15)(a) of the Act is replaced by the following:

    • (a) where a non-resident person has entered into an agreement under the terms of which the non-resident person agrees to guarantee the repayment, in whole or in part, of the principal amount of a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation of a person resident in Canada, any amount paid or credited as consideration for the guarantee is deemed to be a payment of interest on that obligation; and

  • (5) Subsection (4) is deemed to have come into force on March 1, 1994.

 The definition “security interest” in subsection 224(1.3) of the English version of the Act is replaced by the following:

“security interest”

« garantie »

“security interest” means any interest in property that secures payment or performance of an obligation and includes an interest created by or arising out of a debenture, mortgage, hypothec, lien, pledge, charge, deemed or actual trust, assignment or encumbrance of any kind whatever, however or whenever arising, created, deemed to arise or otherwise provided for;

 Paragraph 227(5.1)(i) of the Act is replaced by the following:

  • (i) an executor, a liquidator of a succession or an administrator;

  •  (1) The definitions “legal representative”, “lending asset” and “person” in subsection 248(1) of the Act are replaced by the following:

    “legal representative”

    « représentant légal »

    “legal representative” of a taxpayer means a trustee in bankruptcy, an assignee, a liquidator, a curator, a receiver of any kind, a trustee, an heir, an administrator, an executor, a liquidator of a succession, a committee, or any other like person, administering, winding up, controlling or otherwise dealing in a representative or fiduciary capacity with the property that belongs or belonged to, or that is or was held for the benefit of, the taxpayer or the taxpayer’s estate;

    “lending asset”

    « titre de crédit »

    “lending asset” means a bond, debenture, mortgage, hypothecary claim, note, agreement of sale or any other indebtedness or a prescribed share, but does not include a prescribed property;

    “person”

    « personne »

    “person”, or any word or expression descriptive of a person, includes any corporation, and any entity exempt, because of subsection 149(1), from tax under Part I on all or part of the entity’s taxable income and the heirs, executors, liquidators of a succession, administrators or other legal representatives of such a person, according to the law of that part of Canada to which the context extends;

  • (2) Subsection 248(4) of the Act is replaced by the following:

    • Marginal note:Interest in real property

      (4) In this Act, an interest in real property includes a leasehold interest in real property but does not include an interest as security only derived by virtue of a mortgage, hypothecary claim, agreement for sale or similar obligation.

  • (3) The portion of subsection 248(20) of the Act before paragraph (a) is replaced by the following:

    • Marginal note:Partition of property

      (20) Subject to subsections (21) to (23), for the purposes of this Act, where at any time a property owned by two or more persons is the subject of a partition, the following rules apply, notwithstanding any retroactive or declaratory effect of the partition:

  • (4) The portion of subsection 248(21) of the Act before paragraph (a) is replaced by the following:

    • Marginal note:Subdivision of property

      (21) Where a property that was owned by two or more persons is the subject of a partition among those persons and, as a consequence thereof, each such person has, in the property, a new interest the fair market value of which immediately after the partition, expressed as a percentage of the fair market value of all the new interests in the property immediately after the partition, is equal to the fair market value of that person’s undivided interest immediately before the partition, expressed as a percentage of the fair market value of all the undivided interests in the property immediately before the partition,

  • (5) Paragraph 248(21)(c) of the Act is replaced by the following:

    • (c) subdivisions of a building or of a parcel of land that are established in the course of, or in contemplation of, a partition and that are co-owned by the same persons who co-owned the building or the parcel of land, or by their assignee, shall be regarded as one property, and

 Subsection 256(4) of the Act is replaced by the following:

  • Marginal note:Saving provision

    (4) Where one corporation would, but for this subsection, be associated with another corporation in a taxation year by reason of both of the corporations being controlled by the same executor, liquidator of a succession or trustee and it is established to the satisfaction of the Minister

    • (a) that the executor, liquidator or trustee did not acquire control of the corporations as a result of one or more estates or trusts created by the same individual or two or more individuals not dealing with each other at arm’s length, and

    • (b) that the estate or trust under which the executor, liquidator or trustee acquired control of each of the corporations arose only on the death of the individual creating the estate or trust,

    the two corporations are deemed, for the purposes of this Act, not to be associated with each other in the year.

R.S., c. 2 (5th Supp.)Income Tax Application Rules

  •  (1) The definition “obligation” in subsection 26(12) of the Income Tax Application Rules is replaced by the following:

    “obligation”

    « obligation »

    “obligation” means a bond, debenture, bill, note, mortgage, hypothecary claim or agreement of sale;

  • (2) The portion of subsection 26(23) of the Rules before paragraph (a) is replaced by the following:

    • Marginal note:Obligations received on amalgamations

      (23) Where, after May 6, 1974, there has been an amalgamation (within the meaning assigned by section 87 of the amended Act) of two or more corporations (each of which is in this subsection referred to as a “predecessor corporation”) to form one corporate entity (in this subsection referred to as the “new corporation”) and a taxpayer has acquired a capital property that was a bond, debenture, note, mortgage, hypothecary claim or other similar obligation of the new corporation (in this subsection referred to as the “new obligation”) as sole consideration for the disposition on the amalgamation of a bond, debenture, note, mortgage, hypothecary claim or other similar obligation respectively of a predecessor corporation (in this subsection referred to as the “old obligation”) owned by the taxpayer on December 31, 1971 and thereafter without interruption until immediately before the amalgamation, notwithstanding any other provision of this Act or of the amended Act, for the purposes of subsection 88(2.1) of the amended Act and of determining the cost to the taxpayer and the adjusted cost base to the taxpayer of the new obligation,

 
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