Income Tax Amendments Act, 2000 (S.C. 2001, c. 17)
Full Document:
Assented to 2001-06-14
37. (1) The definition “disposition” in section 54 of the Act is repealed.
(2) Paragraph (c) of the definition “principal residence” in section 54 of the Act is replaced by the following:
(c) where the taxpayer is an individual other than a personal trust, unless the particular property was designated by the taxpayer in prescribed form and manner to be the taxpayer’s principal residence for the year and no other property has been designated for the purposes of this definition for the year
(i) where the year is before 1982, by the taxpayer, or
(ii) where the year is after 1981,
(A) by the taxpayer,
(B) by a person who was throughout the year the taxpayer’s spouse or common-law partner (other than a spouse or common-law partner who was throughout the year living apart from, and was separated under a judicial separation or written separation agreement from, the taxpayer),
(C) by a person who was the taxpayer’s child (other than a child who was at any time in the year a married person, a person who is in a common-law partnership or 18 years of age or older), or
(D) where the taxpayer was not at any time in the year a married person, a person who is in a common-law partnership or 18 years of age or older, by a person who was the taxpayer’s
(I) mother or father, or
(II) brother or sister, where that brother or sister was not at any time in the year a married person, a person who is in a common-law partnership or 18 years of age or older,
(3) Subsection (1) applies to transactions and events that occur after December 23, 1998.
(4) Subsection (2) applies to dispositions that occur after 1990 except that clauses (c)(ii)(B) to (D) of the definition “principal residence” in section 54 of the Act, as enacted by subsection (2), shall be read without reference to “or common-law partner” and “a person who is in a common-law partnership” in their application to dispositions made by a taxpayer that occur in a taxation year that is before 2001 and
(a) before 1998; or
(b) after 1997, unless a valid election is made by the taxpayer under section 144 of the Modernization of Benefits and Obligations Act, that that Act apply to the taxpayer in respect of one or more taxation years that include the year.
38. (1) Subsection 55(1) of the Act is amended by adding the following in alphabetical order:
“specified corporation”
« société déterminée »
“specified corporation” in relation to a distribution means a distributing corporation
(a) that is a public corporation or a specified wholly-owned corporation of a public corporation,
(b) shares of the capital stock of which are exchanged for shares of the capital stock of another corporation (referred to in this definition and subsection (3.02) as an “acquiror”) in an exchange to which the definition “permitted exchange” in this subsection would apply if that definition were read without reference to paragraph (a) and subparagraph (b)(ii) of that definition,
(c) that does not make a distribution, to a corporation that is not an acquiror, after 1998 and before the day that is three years after the day on which the shares of the capital stock of the distributing corporation are exchanged in a transaction described in paragraph (b), and
(d) no acquiror in relation to which makes a distribution after 1998 and before the day that is three years after the day on which the shares of the capital stock of the distributing corporation are exchanged in a transaction described in paragraph (b),
and, for the purposes of paragraphs (c) and (d),
(e) a corporation that is formed by an amalgamation of two or more other corporations is deemed to be the same corporation as, and a continuation of, each of the other corporations, and
(f) where there has been a winding-up of a corporation to which subsection 88(1) applies, the parent is deemed to be the same corporation as, and a continuation of, the subsidiary;
“specified wholly-owned corporation”
« filiale à cent pour cent déterminée »
“specified wholly-owned corporation” of a public corporation means a corporation all of the outstanding shares of the capital stock of which (other than directors’ qualifying shares and shares of a specified class) are held by
(a) the public corporation,
(b) a specified wholly-owned corporation of the public corporation, or
(c) any combination of corporations described in paragraph (a) or (b).
(2) Section 55 of the Act is amended by adding the following after subsection (3.01):
Marginal note:Distribution by a specified corporation
(3.02) For the purposes of the definition “distribution” in subsection (1), where the transfer referred to in that definition is by a specified corporation to an acquiror described in the definition “specified corporation” in subsection (1), the references in the definition “distribution” to
(a) “each type of property” shall be read as “property”; and
(b) “property of that type” shall be read as “property”.
(3) Paragraph 55(5)(b) of the Act is amended by striking out the word “and” at the end of subparagraph (ii) and by replacing subparagraph (iii) with the following:
(iii) the total of all amounts each of which is an amount required to have been included under this subparagraph as it read in its application to a taxation year that ended before February 28, 2000,
(iv) the amount, if any, by which
(A) 1/2 of the total of all amounts each of which is an amount required by paragraph 14(1)(b) to be included in computing the corporation’s income in respect of a business carried on by the corporation for a taxation year that is included in the period and that ended after February 27, 2000 and before October 18, 2000,
exceeds
(B) where the corporation has deducted an amount under subsection 20(4.2) in respect of a debt established by it to have become a bad debt in a taxation year that is included in the period and that ended after February 27, 2000 and before October 18, 2000, or has an allowable capital loss for such a year because of the application of subsection 20(4.3), the amount determined by the formula
V + W
where
- V
- is 1/2 of the value determined for A under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and
- W
- is 1/3 of the value determined for B under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and
(C) in any other case, nil, and
(v) the amount, if any, by which
(A) the total of all amounts each of which is an amount required by paragraph 14(1)(b) to be included in computing the corporation’s income in respect of a business carried on by the corporation for a taxation year that is included in the period and that ends after October 17, 2000,
exceeds
(B) where the corporation has deducted an amount under subsection 20(4.2) in respect of a debt established by it to have become a bad debt in a taxation year that is included in the period and that ends after October 17, 2000, or has an allowable capital loss for such a year because of the application of subsection 20(4.3), the amount determined by the formula
X + Y
where
- X
- is the value determined for A under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and
- Y
- is 1/3 of the value determined for B under subsection 20(4.2) in respect of the corporation for the last such taxation year that ended in the period, and
(C) in any other case, nil;
(4) The portion of paragraph 55(5)(e) of the French version of the Act before subparagraph (i) is replaced by the following:
e) pour déterminer si des personnes sont liées entre elles, si une personne est un actionnaire déterminé d’une société et si le contrôle d’une société a été acquis par une personne ou un groupe de personnes, les règles suivantes s’appliquent :
(5) Subparagraph 55(5)(e)(iv) of the Act is replaced by the following:
(iv) this Act shall be read without reference to subsection 251(3) and paragraph 251(5)(b); and
(6) Subsections (1) and (2) apply to transfers that occur after 1998.
(7) Subsection (3) applies in respect of taxation years that end after February 27, 2000.
(8) Subsections (4) and (5) apply to dividends that are received after November 1999, other than dividends received as part of a transaction or event, or a series of transactions or events, that was required before December 1, 1999 to be carried out pursuant to a written agreement made before that day.
39. (1) The portion of paragraph 56(1)(n) of the Act after subparagraph (i) is replaced by the following:
exceeds
(ii) the taxpayer’s scholarship exemption for the year computed under subsection (3);
(2) Section 56 of the Act is amended by adding the following after subsection (2):
Marginal note:Exemption for scholarships, fellowships, bursaries and prizes
(3) For the purpose of subparagraph (1)(n)(ii), a taxpayer’s scholarship exemption for a taxation year is the greatest of
(a) $500,
(b) the lesser of
(i) $3,000 and
(ii) the total of all amounts each of which is the amount included under subparagraph (1)(n)(i) in computing the taxpayer’s income for the year in respect of a scholarship, fellowship or bursary received in connection with the taxpayer’s enrolment in an educational program in respect of which an amount may be deducted under subsection 118.6(2) in computing the taxpayer’s tax payable under this Part for the year, and
(c) the total of all amounts each of which is the lesser of
(i) the amount included under subparagraph (1)(n)(i) in computing the taxpayer’s income for the year in respect of a scholarship, fellowship, bursary or prize that is to be used by the taxpayer in the production of a literary, dramatic, musical or artistic work, and
(ii) the total of all amounts each of which is an expense incurred by the taxpayer in the year for the purpose of fulfilling the conditions under which the amount described in subparagraph (i) was received, other than
(A) personal or living expenses of the taxpayer (except expenses in respect of travel, meals and lodging incurred by the taxpayer in the course of fulfilling those conditions and while absent from the taxpayer’s usual place of residence for the period to which the scholarship, fellowship, bursary or prize, as the case may be, relates),
(B) expenses for which the taxpayer is entitled to be reimbursed, and
(C) expenses that are otherwise deductible in computing the taxpayer’s income.
(3) Subsections (1) and (2) apply to the 2000 and subsequent taxation years.
- Date modified: