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

Assented to 2001-06-14

  •  (1) Section 74.2 of the Act is amended by adding the following after subsection (2):

    • Marginal note:Election for subsection (1) to apply

      (3) Subsection (1) does not apply to a disposition at any particular time (in this subsection referred to as the “emigration disposition”) under paragraph 128.1(4)(b), by a taxpayer who is a recipient referred to in subsection (1), unless the recipient and the individual referred to in that subsection, in their returns of income for the taxation year that includes the first time, after the particular time, at which the recipient disposes of the property, jointly elect that subsection (1) apply to the emigration disposition.

    • Marginal note:Application of subsection (3)

      (4) For the purpose of applying subsection (3) and notwithstanding subsections 152(4) to (5), any assessment of tax payable under this Act by the recipient or the individual referred to in subsection (1) shall be made that is necessary to take an election under subsection (3) into account except that no such assessment shall affect the computation of

      • (a) interest payable under this Act to or by a taxpayer in respect of any period that is before the taxpayer’s filing-due date for the taxation year that includes the first time, after the particular time referred to in subsection (3), at which the recipient disposes of the property referred to in that subsection; or

      • (b) any penalty payable under this Act.

  • (2) Subsection (1) applies after October 1, 1996.

  •  (1) The portion of subsection 75(2) of the Act after paragraph (a) is replaced by the following:

    • (b) that, during the existence of the person, the property shall not be disposed of except with the person’s consent or in accordance with the person’s direction,

    any income or loss from the property or from property substituted for the property, and any taxable capital gain or allowable capital loss from the disposition of the property or of property substituted for the property, shall, during the existence of the person while the person is resident in Canada, be deemed to be income or a loss, as the case may be, or a taxable capital gain or allowable capital loss, as the case may be, of the person.

  • (2) Paragraphs 75(3)(a) and (b) of the Act are replaced by the following:

    • (a) by a trust governed by a deferred profit sharing plan, an employee benefit plan, an employees profit sharing plan, a registered education savings plan, a registered pension plan, a registered retirement income fund, a registered retirement savings plan, a registered supplementary unemployment benefit plan or a retirement compensation arrangement;

    • (b) by an employee trust, a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)), a trust described in paragraph (a.1) of the definition “trust” in subsection 108(1), or a trust described in paragraph 149(1)(y);

  • (3) Subsection (1) applies to taxation years that begin after 2000.

  • (4) Paragraph 75(3)(a) of the Act, as enacted by subsection (2), applies to taxation years that end after October 8, 1986 and, notwithstanding subsections 152(4) to (5) of the Act, the Minister of National Revenue shall make any assessments, reassessments and additional assessments of tax, interest and penalties that are necessary to give effect to the words “retirement compensation arrangement” in that paragraph.

  • (5) Paragraph 75(3)(b) of the Act, as enacted by subsection (2), applies to the 1999 and subsequent taxation years.

  •  (1) The Act is amended by adding the following after section 76:

    Marginal note:Non-resident moving debt from Canadian business
    • 76.1 (1) If at any time a debt obligation of a non-resident taxpayer that is denominated in a foreign currency ceases to be an obligation of the taxpayer in respect of a business or part of a business carried on by the taxpayer in Canada immediately before that time (other than an obligation in respect of which the taxpayer ceased to be indebted at that time), for the purpose of determining the amount of any income, loss, capital gain or capital loss due to the fluctuation in the value of the foreign currency relative to Canadian currency, the taxpayer is deemed to have settled the debt obligation immediately before that time at the amount outstanding on account of its principal amount.

    • Marginal note:Non-resident assuming debt

      (2) If at any time a debt obligation of a non-resident taxpayer that is denominated in a foreign currency becomes an obligation of the taxpayer in respect of a business or part of a business that the taxpayer carries on in Canada after that time (other than an obligation in respect of which the taxpayer became indebted at that time), the amount of any income, loss, capital gain or capital loss in respect of the obligation due to the fluctuation in the value of the foreign currency relative to Canadian currency shall be determined based on the amount of the obligation in Canadian currency at that time.

  • (2) Subsection (1) applies after June 27, 1999 in respect of an authorized foreign bank, and after August 8, 2000 in any other case.

  •  (1) Subsection 79.1(2) of the Act is replaced by the following:

    • Marginal note:Seizure of property

      (2) Subject to subsection (2.1) and for the purpose of this section, a property is seized at any time by a person in respect of a debt where

      • (a) the beneficial ownership of the property is acquired or reacquired at that time by the person; and

      • (b) the acquisition or reacquisition of the property is in consequence of another person’s failure to pay to the person all or part of the specified amount of the debt.

    • Marginal note:Exception

      (2.1) For the purpose of this section, foreign resource property is deemed not to be seized at any time from

      • (a) an individual or a corporation, if the individual or corporation is non-resident at that time; or

      • (b) a partnership (other than a partnership each member of which is resident in Canada at that time).

  • (2) Subsection (1) applies in respect of property acquired or reacquired after February 27, 2000.

  •  (1) The portion of the definition “successor pool” in subsection 80(1) of the Act before paragraph (f) is replaced by the following:

    “successor pool”

    « compte de société remplaçante »

    “successor pool” at any time for a commercial obligation and in respect of an amount determined in relation to a debtor means the portion of that amount that would be deductible under subsection 66.7(2), (2.3), (3), (4) or (5), as the case may be, in computing the debtor’s income for the taxation year that includes that time, if

    • (a) the debtor had sufficient incomes from all sources,

    • (b) subsection (8) did not apply to reduce the amount so determined at that time,

    • (c) the year ended immediately after that time, and

    • (d) paragraphs 66.7(2.3)(a), (4)(a) and (5)(a) were read without reference to the expressions “30% of”, “30% of” and “10% of”, respectively,

    except that the successor pool at that time for the obligation is deemed to be nil unless

    • (e) the obligation was issued by the debtor before, and not in contemplation of, the event described in paragraph (8)(a) that gives rise to the deductibility under subsection 66.7(2), (2.3), (3), (4) or (5), as the case may be, of all or part of that amount in computing the debtor’s income, or

  • (2) Paragraph 80(2)(d) of the Act is replaced by the following:

    • (d) the applicable fraction of the unapplied portion of a forgiven amount at any time in respect of an obligation issued by the debtor is in respect of a loss for any other taxation year, the fraction required to be used under section 38 for that year;

  • (3) Paragraph 80(8)(a) of the Act is replaced by the following:

    • (a) where the debtor is a corporation resident in Canada throughout that year, each particular amount that would be determined in respect of the debtor under paragraph 66.7(2)(a), (2.3)(a), (3)(a), (4)(a) or (5)(a) if paragraphs 66.7(2.3)(a), (4)(a) and (5)(a) were read without reference to the expressions “30% of”, “30% of” and “10% of”, respectively, as a consequence of the acquisition of control of the debtor by a person or group of persons, the debtor ceasing to be exempt from tax under this Part on its taxable income or the acquisition of properties by the debtor by way of an amalgamation or merger, where the amount so applied does not exceed the successor pool immediately after that time for the obligation and in respect of the particular amount;

  • (4) Subsection 80(8) of the Act is amended by striking out the word “and” at the end of paragraph (d), by adding the word “and” at the end of paragraph (e) and by adding the following after paragraph (e):

    • (f) the cumulative foreign resource expense (within the meaning assigned by subsection 66.21(1)) of the debtor in respect of a country.

  • (5) Clause 80(12)(a)(ii)(B) of the Act is amended by replacing the reference to the expression “4/3 of” with a reference to the word “twice”.

  • (6) Subparagraph (a)(ii) of the description of D in subsection 80(13) of the Act is amended by replacing the reference to the expression “4/3 of” with a reference to the word “twice”.

  • (7) Paragraph (b) of the description of E in subsection 80(13) of the Act is amended by replacing the reference to the number “0.75” with a reference to the fraction “1/2”.

  • (8) Subsections (1), (3) and (4) apply to taxation years that begin after 2000.

  • (9) Subsections (2) and (5) to (7) apply to taxation years that end after February 27, 2000 except that, for a taxation year of a debtor that includes February 28, 2000 or October 17, 2000, or began after February 28, 2000 and ended before October 17, 2000,

    • (a) the reference to the word “twice” in clause 80(12)(a)(ii)(B) of the Act, as enacted by subsection (5), and in subparagraph (a)(ii) of the description of D in subsection 80(13) of the Act, as enacted by subsection (6), shall be read as a reference to the expression “the fraction that is the reciprocal of the fraction in paragraph 38(a), as enacted by subsection 22(1) of the Income Tax Amendments Act, 2000, that applies to the debtor for the year, multiplied by”; and

    • (b) the reference to the fraction “1/2” in paragraph (b) of the description of E in subsection 80(13) of the Act, as enacted by subsection (7), shall be read as a reference to the fraction in paragraph 38(a) of the Act, as enacted by subsection 22(1), that applies to the debtor for the year.

 
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