Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Act current to 2017-11-20 and last amended on 2017-07-01. Previous Versions

 [Repealed, 2000, c. 19, s. 28]

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 120.1;
  • 1994, c. 7, Sch. II, s. 97;
  • 2000, c. 19, s. 28.
Marginal note:Minimum tax carry-over
  •  (1) There may be deducted from the amount that, but for this section, section 120 and subsection 120.4(2), would be an individual’s tax payable under this Part for a particular taxation year such amount as the individual claims not exceeding the lesser of

    • (a) the portion of the total of the individual’s additional taxes determined under subsection 120.2(3) for the 7 taxation years immediately preceding the particular year that was not deducted in computing the individual’s tax payable under this Part for a taxation year preceding the particular year, and

    • (b) the amount, if any, by which

      • (i) the amount that, but for this section, section 120 and subsection 120.4(2), would be the individual’s tax payable under this Part for the particular year if the individual were not entitled to any deduction under any of sections 126, 127 and 127.4

      exceeds

      • (ii) the individual’s minimum amount for the particular year determined under section 127.51.

  • Marginal note:Additional tax determined

    (3) For the purposes of subsection 120.2(1), additional tax of an individual for a taxation year is the amount, if any, by which

    • (a) the individual’s minimum amount for the year determined under section 127.51

    exceeds the total of

    • (b) the amount that, if this Act were read without reference to section 120, would be the individual’s tax payable under this Part for the year if the individual were not entitled to any deduction under any of sections 126, 127 and 127.4, and

    • (c) that proportion of the amount, if any, by which

      • (i) the individual’s special foreign tax credit for the year determined under section 127.54

      exceeds

      • (ii) the total of all amounts deductible under section 126 from the individual’s tax for the year

      that

      • (iii) the amount of the individual’s foreign taxes for the year within the meaning assigned by subsection 127.54(1)

      is of

      • (iv) the amount that would be the individual’s foreign taxes for the year within the meaning assigned by subsection 127.54(1) if the definition foreign taxes in that subsection were read without reference to “2/3 of”.

  • Marginal note:Where subsection (1) does not apply

    (4) Subsection (1) does not apply in respect of an individual’s return of income filed under subsection 70(2), paragraph 104(23)(d) or 128(2)(f) or subsection 150(4).

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 120.2;
  • 1998, c. 19, s. 137;
  • 2000, c. 19, s. 29;
  • 2001, c. 17, s. 104;
  • 2013, c. 34, s. 254.
Marginal note:CPP/QPP disability benefits for previous years

 There shall be added in computing an individual’s tax payable under this Part for a particular taxation year the total of all amounts each of which is the amount, if any, by which

  • (a) the amount that would have been the tax payable under this Part by the individual for a preceding taxation year if that portion of any amount not included in computing the individual’s income for the particular year because of subsection 56(8) and that relates to the preceding year had been included in computing the individual’s income for the preceding year

exceeds

  • (b) the tax payable under this Part by the individual for the preceding year.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1994, c. 7, Sch. II, s. 98.

Lump-sum Payments

Marginal note:Definitions
  •  (1) The definitions in subsection 110.2(1) apply in this section.

  • Marginal note:Addition to tax payable

    (2) There shall be added in computing an individual’s tax payable under this Part for a particular taxation year the total of all amounts each of which is the amount, if any, by which

    • (a) the individual’s notional tax payable for an eligible taxation year to which a specified portion of a qualifying amount received by the individual relates and in respect of which an amount is deducted under section 110.2 in computing the individual’s taxable income for the particular year

    exceeds

    • (b) the individual’s tax payable under this Part for the eligible taxation year.

  • Marginal note:Notional tax payable

    (3) For the purpose of subsection (2), an individual’s notional tax payable for an eligible taxation year, calculated for the purpose of computing the individual’s tax payable under this Part for a taxation year (in this subsection referred to as “the year of receipt”) in which the individual received a qualifying amount, is the total of

    • (a) the amount, if any, by which

      • (i) the amount that would be the individual’s tax payable under this Part for the eligible taxation year if the total of all amounts, each of which is the specified portion, in relation to the eligible taxation year, of a qualifying amount received by the individual before the end of the year of receipt, were added in computing the individual’s taxable income for the eligible taxation year

      exceeds

      • (ii) the total of all amounts each of which is an amount, in respect of a qualifying amount received by the individual before the year of receipt, that was included because of this paragraph in computing the individual’s notional tax payable under this Part for the eligible taxation year, and

    • (b) if the eligible taxation year ended before the taxation year preceding the year of receipt, an amount equal to the amount that would be calculated as interest payable on the amount, if any, by which the amount determined under paragraph (a) in respect of the eligible taxation year exceeds the taxpayer’s tax payable under this Part for that year, if the amount that would be calculated as interest payable on that excess were calculated

      • (i) for the period that began on May 1 of the year following the eligible taxation year and that ended immediately before the year of receipt, and

      • (ii) at the prescribed rate that is applicable for the purpose of subsection 164(3) with respect to the period.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2000, c. 19, s. 30;
  • 2013, c. 34, s. 255.

Tax on Split Income

Marginal note:Definitions
  •  (1) The definitions in this subsection apply in this section.

    excluded amount

    excluded amount, in respect of an individual for a taxation year, means an amount that is the income from, or the taxable capital gain from the disposition of, a property acquired by or for the benefit of the individual as a consequence of the death of

    • (a) a parent of the individual; or

    • (b) any person, if the individual is

      • (i) enrolled as a full-time student during the year at a post-secondary educational institution (as defined in subsection 146.1(1)), or

      • (ii) an individual in respect of whom an amount may be deducted under section 118.3 in computing a taxpayer’s tax payable under this Part for the year. (montant exclu)

    specified individual

    specified individual, in relation to a taxation year, means an individual who

    • (a) had not attained the age of 17 years before the year;

    • (b) at no time in the year was non-resident; and

    • (c) has a parent who is resident in Canada at any time in the year. (particulier déterminé)

    split income

    split income, of a specified individual for a taxation year, means the total of all amounts (other than excluded amounts) each of which is

    • (a) an amount required to be included in computing the individual’s income for the year

      • (i) in respect of taxable dividends received by the individual in respect of shares of the capital stock of a corporation (other than shares of a class listed on a designated stock exchange or shares of the capital stock of a mutual fund corporation), or

      • (ii) because of the application of section 15 in respect of the ownership by any person of shares of the capital stock of a corporation (other than shares of a class listed on a designated stock exchange),

    • (b) a portion of an amount included because of the application of paragraph 96(1)(f) in computing the individual’s income for the year, to the extent that the portion

      • (i) is not included in an amount described in paragraph (a), and

      • (ii) can reasonably be considered to be income derived

        • (A) from the provision of property or services by a partnership or trust to, or in support of, a business carried on by

          • (I) a person who is related to the individual at any time in the year,

          • (II) a corporation of which a person who is related to the individual is a specified shareholder at any time in the year, or

          • (III) a professional corporation of which a person related to the individual is a shareholder at any time in the year, or

        • (B) from a business of, or the rental of property by, a particular partnership or trust, if a person who is related to the individual at any time in the year

          • (I) is actively engaged on a regular basis in the activities of the particular partnership or trust related to earning income from a business or the rental of property, or

          • (II) in the case of a particular partnership, has an interest in the particular partnership directly or indirectly through one or more other partnerships, or

    • (c) a portion of an amount included because of the application of subsection 104(13) or 105(2) in respect of a trust (other than a mutual fund trust or a trust that is deemed to be in existence by subsection 143(1)) in computing the individual’s income for the year, to the extent that the portion

      • (i) is not included in an amount described in paragraph (a), and

      • (ii) can reasonably be considered

        • (A) to be in respect of taxable dividends received in respect of shares of the capital stock of a corporation (other than shares of a class listed on a designated stock exchange or shares of the capital stock of a mutual fund corporation),

        • (B) to arise because of the application of section 15 in respect of the ownership by any person of shares of the capital stock of a corporation (other than shares of a class listed on a designated stock exchange),

        • (C) to be income derived from the provision of property or services by a partnership or trust to, or in support of, a business carried on by

          • (I) a person who is related to the individual at any time in the year,

          • (II) a corporation of which a person who is related to the individual is a specified shareholder at any time in the year, or

          • (III) a professional corporation of which a person related to the individual is a shareholder at any time in the year, or

        • (D) to be income derived from a business of, or the rental of property by, a particular partnership or trust, if a person who is related to the individual at any time in the year is actively engaged on a regular basis in the activities of the particular partnership or trust related to earning income from a business or the rental of property. (revenu fractionné)

  • Marginal note:Tax on split income

    (2) There shall be added to a specified individual’s tax payable under this Part for a taxation year the highest individual percentage for the year multiplied by the individual’s split income for the year.

  • Marginal note:Tax payable by a specified individual

    (3) Notwithstanding any other provision of this Act, where an individual is a specified individual in relation to a taxation year, the individual’s tax payable under this Part for the year shall not be less than the amount by which

    • (a) the amount added under subsection (2) to the individual’s tax payable under this Part for the year

    exceeds

    • (b) the total of all amounts each of which is an amount that

      • (i) may be deducted under section 121 or 126 in computing the individual’s tax payable under this Part for the year, and

      • (ii) can reasonably be considered to be in respect of an amount included in computing the individual’s split income for the year.

  • Marginal note:Taxable capital gain

    (4) If a specified individual would have for a taxation year, if this Act were read without reference to this section, a taxable capital gain (other than an excluded amount) from a disposition of shares (other than shares of a class listed on a designated stock exchange or shares of a mutual fund corporation) that are transferred, either directly or indirectly, in any manner whatever, to a person with whom the specified individual does not deal at arm’s length, then the amount of that taxable capital gain is deemed not to be a taxable capital gain and twice the amount is deemed to be received by the specified individual in the year as a taxable dividend that is not an eligible dividend.

  • Marginal note:Taxable capital gain of trust

    (5) If a specified individual would be, if this Act were read without reference to this section, required under paragraph 104(13)(a) or subsection 105(2) to include an amount in computing the specified individual’s income for a taxation year, then to the extent that the amount can reasonably be considered to be attributable to a taxable capital gain (other than an excluded amount) of a trust from a disposition of shares (other than shares of a class listed on a designated stock exchange or shares of a mutual fund corporation) that are transferred, either directly or indirectly, in any manner whatever, to a person with whom the specified individual does not deal at arm’s length, paragraph 104(13)(a) and subsection 105(2) do not apply in respect of the amount and twice the amount is deemed to be received by the specified individual in the year as a taxable dividend that is not an eligible dividend.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2000, c. 19, s. 30;
  • 2007, c. 35, s. 68;
  • 2011, c. 24, s. 36;
  • 2013, c. 34, s. 256(E);
  • 2014, c. 39, s. 37;
  • 2016, c. 11, s. 4.
 
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