Income Tax Amendments Act, 2000 (S.C. 2001, c. 17)
Full Document:
Assented to 2001-06-14
3. (1) Paragraph 8(1)(a) of the Act is repealed.
(2) Paragraph 8(1)(c) of the Act is replaced by the following:
Marginal note:Clergy residence
(c) where, in the year, the taxpayer
(i) is a member of the clergy or of a religious order or a regular minister of a religious denomination, and
(ii) is
(A) in charge of a diocese, parish or congregation,
(B) ministering to a diocese, parish or congregation, or
(C) engaged exclusively in full-time administrative service by appointment of a religious order or religious denomination,
the amount, not exceeding the taxpayer’s remuneration for the year from the office or employment, equal to
(iii) the total of all amounts including amounts in respect of utilities, included in computing the taxpayer’s income for the year under section 6 in respect of the residence or other living accommodation occupied by the taxpayer in the course of, or because of, the taxpayer’s office or employment as such a member or minister so in charge of or ministering to a diocese, parish or congregation, or so engaged in such administrative service, or
(iv) rent and utilities paid by the taxpayer for the taxpayer’s principal place of residence (or other principal living accommodation), ordinarily occupied during the year by the taxpayer, or the fair rental value of such a residence (or other living accommodation), including utilities, owned by the taxpayer or the taxpayer’s spouse or common-law partner, not exceeding the lesser of
(A) the greater of
(I) $1,000 multiplied by the number of months (to a maximum of ten) in the year, during which the taxpayer is a person described in subparagraphs (i) and (ii), and
(II) one-third of the taxpayer’s remuneration for the year from the office or employment, and
(B) the amount, if any, by which
(I) the rent paid or the fair rental value of the residence or living accommodation, including utilities
exceeds
(II) the total of all amounts each of which is an amount deducted, in connection with the same accommodation or residence, in computing an individual’s income for the year from an office or employment or from a business (other than an amount deducted under this paragraph by the taxpayer), to the extent that the amount can reasonably be considered to relate to the period, or a portion of the period, in respect of which an amount is claimed by the taxpayer under this paragraph;
(3) Subsection 8(10) of the Act is replaced by the following:
Marginal note:Certificate of employer
(10) An amount otherwise deductible for a taxation year under paragraph (1)(c), (f), (h) or (h.1) or subparagraph (1)(i)(ii) or (iii) by a taxpayer shall not be deducted unless a prescribed form, signed by the taxpayer’s employer certifying that the conditions set out in the applicable provision were met in the year in respect of the taxpayer, is filed with the taxpayer’s return of income for the year.
(4) Subsections (1) and (3) apply to the 1998 and subsequent taxation years except that in its application to the 1998 to 2000 taxation years the reference to “paragraph (1)(c), (f)” in subsection 8(10), as enacted by subsection (3), shall be read as a reference to “paragraph (1)(f)”.
(5) Subsection (2) applies to the 2001 and subsequent taxation years.
4. (1) Section 10 of the Act is amended by adding the following after subsection (11):
Marginal note:Removing property from inventory
(12) If at any time a non-resident taxpayer ceases to use, in connection with a business or part of a business carried on by the taxpayer in Canada immediately before that time, a property that was immediately before that time described in the inventory of the business or the part of the business, as the case may be, (other than a property that was disposed of by the taxpayer at that time), the taxpayer is deemed
(a) to have disposed of the property immediately before that time for proceeds of disposition equal to its fair market value at that time; and
(b) to have received those proceeds immediately before that time in the course of carrying on the business or the part of the business, as the case may be.
Marginal note:Adding property to inventory
(13) If at any time a property becomes included in the inventory of a business or part of a business that a non-resident taxpayer carries on in Canada after that time (other than a property that was, otherwise than because of this subsection, acquired by the taxpayer at that time), the taxpayer is deemed to have acquired the property at that time at a cost equal to its fair market value at that time.
Marginal note:Work in progress
(14) For the purposes of subsections (12) and (13), property that is included in the inventory of a business includes property that would be so included if paragraph 34(a) did not apply.
(2) Subsection (1) applies after December 23, 1998.
5. (1) Paragraph 12(1)(c) of the Act is replaced by the following:
Marginal note:Interest
(c) subject to subsections (3) and (4.1), any amount received or receivable by the taxpayer in the year (depending on the method regularly followed by the taxpayer in computing the taxpayer’s income) as, on account of, in lieu of payment of or in satisfaction of, interest to the extent that the interest was not included in computing the taxpayer’s income for a preceding taxation year;
(2) Paragraph 12(1)(i.1) of the Act is replaced by the following:
Marginal note:Bad debts recovered
(i.1) where an amount is received in the year on account of a debt in respect of which a deduction for bad debts was made under subsection 20(4.2) in computing the taxpayer’s income for a preceding taxation year, the amount determined by the formula
A × B / C
where
- A
- is 1/2 of the amount so received,
- B
- is the amount that was deducted under subsection 20(4.2) in respect of the debt, and
- C
- is the total of the amount that was so deducted under subsection 20(4.2) and the amount that was deemed by that subsection or subsection 20(4.3) to be an allowable capital loss in respect of the debt;
(3) Subsection 12(1) of the Act is amended by adding the following after paragraph (o):
Marginal note:Foreign oil and gas production taxes
(o.1) the total of all amounts, each of which is the taxpayer’s production tax amount for a foreign oil and gas business of the taxpayer for the year, within the meaning assigned by subsection 126(7);
(4) Subsection (1) applies to taxation years that end after September 1997.
(5) Subsection (2) applies in respect of taxation years that end after February 27, 2000 except that, for taxation years that ended after February 27, 2000 and before October 18, 2000, the reference to the fraction “1/2” in the description of A in paragraph 12(1)(i.1) of the Act, as enacted by subsection (2), shall be read as a reference to the fraction “2/3”.
(6) Subsection (3) applies to taxation years of a taxpayer that begin after the earlier of
(a) December 31, 1999; and
(b) where, for the purposes of subsection 117(26), a date is designated in writing by the taxpayer and the designation is filed with the Minister of National Revenue on or before the taxpayer’s filing-due date for the taxpayer’s taxation year that includes the day on which this Act receives royal assent, the later of
(i) the date so designated, and
(ii) December 31, 1994.
6. (1) Clause 13(7)(b)(ii)(B) of the Act is amended by replacing the reference to the fraction “3/4” with a reference to the fraction “1/2” and by replacing the reference to the expression “4/3 of” with a reference to the word “twice”.
(2) Clause 13(7)(d)(i)(B) of the Act is amended by replacing the reference to the fraction “3/4” with a reference to the fraction “1/2” and by replacing the reference to the expression “4/3 of” with a reference to the word “twice”.
(3) Paragraph 13(7)(e) of the Act is amended by replacing the references to the fraction “3/4” with references to the fraction “1/2” and by replacing the reference to the expression “4/3 of” with a reference to the word “twice”.
(4) Subparagraph 13(7)(f)(ii) of the Act is amended by replacing the reference to the fraction “3/4” with a reference to the fraction “1/2”.
(5) The definition “disposition of property” in subsection 13(21) of the Act is repealed.
(6) Subparagraph 13(21.1)(b)(ii) of the Act is amended by replacing the reference to the fraction “1/4” with a reference to the fraction “1/2”.
(7) Paragraph 13(21.2)(a) of the Act is replaced by the following:
(a) a person or partnership (in this subsection referred to as the “transferor”) disposes at a particular time (otherwise than in a disposition described in any of paragraphs (c) to (g) of the definition “superficial loss” in section 54) of a depreciable property of a particular prescribed class of the transferor,
(8) Subparagraph 13(21.2)(e)(ii) of the Act is replaced by the following:
(ii) where two or more properties of a prescribed class of the transferor are disposed of at the same time, subparagraph (i) applies as if each property so disposed of had been separately disposed of in the order designated by the transferor or, if the transferor does not designate an order, in the order designated by the Minister,
(9) Section 13 of the Act is amended by adding the following after subsection (33):
Marginal note:Deductible expenses
(34) Notwithstanding paragraph 1102(1)(a) of the Regulations, for taxation years that end after 1987 and before December 6, 1996, the classes of property prescribed for the purpose of paragraph 20(1)(a) are deemed to include property of a taxpayer that, if the Act were read without reference to sections 66 to 66.4, would be included in one of the classes.
(10) Subsections (1) and (2) apply to changes in use of property that occur in taxation years that end after February 27, 2000 except that, for changes in use of property that occur in a taxpayer’s taxation year that includes February 28, 2000 or October 17, 2000, or began after February 28, 2000 and ended before October 17, 2000, the references in clauses 13(7)(b)(ii)(B) and 13(7)(d)(i)(B) of the Act, as enacted by subsections (1) and (2), respectively, to the fraction “1/2” shall be read as references to the fraction in paragraph 38(a) of the Act, as enacted by subsection 22(1), that applies to the taxpayer for the year and the references to the word “twice” shall be read as references 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 taxpayer for the year, multiplied by”.
(11) Subsection (3) applies to acquisitions of property that occur in taxation years that end after February 27, 2000 except that, for acquisitions of property in a taxation year that includes February 28, 2000 or October 17, 2000, or began after February 28, 2000 and ended before October 17, 2000, of a person or partnership from whom the property was acquired, the references in paragraph 13(7)(e) of the Act, as enacted by subsection (3), to the fraction “1/2” shall be read as references to the fraction in paragraph 38(a) of the Act, as enacted by subsection 22(1), that applies to the person or partnership from whom the taxpayer acquired the property for the year in which the person or partnership disposed of the property, and the references to the word “twice” shall be read as references 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 person or partnership from whom the taxpayer acquired the property for the year in which the person or partnership disposed of the property, multiplied by”.
(12) Subsection (4) applies to acquisitions of property that occur in taxation years that end after February 27, 2000 except that, for acquisitions of property that occur in a taxpayer’s taxation year that includes February 28, 2000 or October 17, 2000, or began after February 28, 2000 and ended before October 17, 2000, the reference in subparagraph 13(7)(f)(ii) of the Act, as enacted by subsection (4), to the fraction “1/2” 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 taxpayer for the year.
(13) Subsection (5) applies to transactions and events that occur after December 23, 1998.
(14) Subsection (6) applies to taxation years that end after February 27, 2000 except that, for a taxpayer’s taxation year that includes February 28, 2000 or October 17, 2000, or began after February 28, 2000 and ended before October 17, 2000, the reference in subparagraph 13(21.1)(b)(ii) of the Act, as enacted by subsection (6), to the fraction “1/2” shall be read as a reference to the fraction determined when the fraction in paragraph 38(a) of the Act, as enacted by subsection 22(1), that applies to the taxpayer for the year is subtracted from 1.
(15) Subsections (7) and (8) apply after November 1999 except that, if an individual (other than a trust) so elects in writing and files the election with the Minister of National Revenue on or before the individual’s filing-due date for the taxation year in which this Act receives royal assent, subsection (7) does not apply in respect of the disposition of a property by the individual before July 2000
(a) to a person who was obliged on November 30, 1999 to acquire the property pursuant to the terms of an agreement in writing made on or before that day; or
(b) in a transaction, or as part of a series of transactions, the arrangements for which, evidenced in writing, were substantially advanced before December 1999, other than a transaction or series of transactions a main purpose of which can reasonably be considered to have been to enable an unrelated person to obtain the benefit of
(i) any deduction in computing income, taxable income, taxable income earned in Canada or tax payable under the Act, or
(ii) any balance of undeducted outlays, expenses or other amounts.
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