Budget Implementation Act, 2004, No. 2 (S.C. 2005, c. 19)
Full Document:
Assented to 2005-05-13
49. (1) The portion of subsection 225.1(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Collection restrictions
225.1 (1) If a taxpayer is liable for the payment of an amount assessed under this Act, other than an amount assessed under subsection 152(4.2), 169(3) or 220(3.1), the Minister shall not, until after the collection-commencement day in respect of the amount, do any of the following for the purpose of collecting the amount:
(2) The portion of subsection 225.1(1) of the English version of the Act after paragraph (g) is repealed.
(3) Section 225.1 of the Act is amended by adding the following after subsection (1):
Marginal note:Collection-commencement day
(1.1) The collection-commencement day in respect of an amount is
(a) in the case of an amount assessed under subsection 188(1.1) in respect of a notice of intention to revoke given under subsection 168(1) or any of subsections 149.1(2) to (4.1), one year after the day on which the notice was mailed;
(b) in the case of an amount assessed under section 188.1, one year after the day on which the notice of assessment was mailed; and
(c) in any other case, 90 days after the day on which the notice of assessment was mailed.
(4) Subsections (1) to (3) apply in respect of notices issued by the Minister of National Revenue after the day that is 30 days after the day on which this Act is assented to.
50. Section 239 of the Act is amended by adding the following after subsection (4):
Marginal note:Offence and punishment without reference to subsection 120(2.2)
(5) In determining whether an offence under this Act, for which a person may on summary conviction or indictment be liable for a fine or imprisonment, has been committed, and in determining the punishment for such an offence, this Act is to be read without reference to subsection 120(2.2).
51. (1) Subsection 241(3.2) of the Act is amended by striking out the word “and” at the end of paragraph (d) and by replacing paragraph (e) with the following:
(e) if the registration of the charity has been revoked or annulled, a copy of the entirety of or any part of any letter sent by or on behalf of the Minister to the charity relating to the grounds for the revocation or annulment;
(f) financial statements required to be filed with an information return referred to in subsection 149.1(14);
(g) a copy of the entirety of or any part of any letter or notice by the Minister to the charity relating to a suspension under section 188.2 or an assessment of tax or penalty under this Act (other than the amount of a liability under subsection 188(1.1)); and
(h) an application by the charity, and information filed in support of the application, for a designation, determination or decision by the Minister under subsection 149.1(6.3), (7), (8) or (13).
(2) Subsection (1) applies to documents that are sent by the Minister of National Revenue, or that are filed or required to be filed with that Minister, after the day on which this Act is assented to.
52. (1) The definition “tax benefit” in subsection 245(1) of the Act is replaced by the following:
“tax benefit”
« avantage fiscal »
“tax benefit” means a reduction, avoidance or deferral of tax or other amount payable under this Act or an increase in a refund of tax or other amount under this Act, and includes a reduction, avoidance or deferral of tax or other amount that would be payable under this Act but for a tax treaty or an increase in a refund of tax or other amount under this Act as a result of a tax treaty;
(2) Subsection 245(4) of the Act is replaced by the following:
Marginal note:Application of subsection (2)
(4) Subsection (2) applies to a transaction only if it may reasonably be considered that the transaction
(a) would, if this Act were read without reference to this section, result directly or indirectly in a misuse of the provisions of any one or more of
(i) this Act,
(ii) the Income Tax Regulations,
(iii) the Income Tax Application Rules,
(iv) a tax treaty, or
(v) any other enactment that is relevant in computing tax or any other amount payable by or refundable to a person under this Act or in determining any amount that is relevant for the purposes of that computation; or
(b) would result directly or indirectly in an abuse having regard to those provisions, other than this section, read as a whole.
(3) The portion of subsection 245(5) of the Act before paragraph (c) is replaced by the following:
Marginal note:Determination of tax consequences
(5) Without restricting the generality of subsection (2), and notwithstanding any other enactment,
(a) any deduction, exemption or exclusion in computing income, taxable income, taxable income earned in Canada or tax payable or any part thereof may be allowed or disallowed in whole or in part,
(b) any such deduction, exemption or exclusion, any income, loss or other amount or part thereof may be allocated to any person,
(4) The definition “tax treaty” in subsection 248(1) of the Act is deemed, for the purpose of section 245 of the Act, to have come into force on September 13, 1988.
(5) Subsections (1) to (3) apply with respect to transactions entered into after September 12, 1988.
53. (1) The definition “tax benefit” in subsection 247(1) of the Act is replaced by the following:
“tax benefit”
« avantage fiscal »
“tax benefit” has the meaning assigned by subsection 245(1).
(2) Subsection (1) applies to taxation years and fiscal periods that begin after 1997.
54. (1) Subsection 251.1(1) of the Act is amended by striking out the word “and” at the end of paragraph (e) and by adding the following after paragraph (f):
(g) a person and a trust, if the person
(i) is a majority-interest beneficiary of the trust, or
(ii) would, if this subsection were read without reference to this paragraph, be affiliated with a majority-interest beneficiary of the trust; and
(h) two trusts, if a contributor to one of the trusts is affiliated with a contributor to the other trust and
(i) a majority-interest beneficiary of one of the trusts is affiliated with a majority-interest beneficiary of the other trust,
(ii) a majority-interest beneficiary of one of the trusts is affiliated with each member of a majority-interest group of beneficiaries of the other trust, or
(iii) each member of a majority-interest group of beneficiaries of each of the trusts is affiliated with at least one member of a majority-interest group of beneficiaries of the other trust.
(2) Subsection 251.1(3) of the Act is amended by adding the following in alphabetical order:
“beneficiary”
« bénéficiaire »
“beneficiary”, under a trust, includes a person beneficially interested in the trust.
“contributor”
« cotisant »
“contributor”, to a trust, means a person who has at any time made a loan or transfer of property, either directly or indirectly, in any manner whatever, to or for the benefit of the trust other than, if the person deals at arm’s length with the trust at that time and is not immediately after that time a majority-interest beneficiary of the trust,
(a) a loan made at a reasonable rate of interest; or
(b) a transfer made for fair market value consideration.
“majority-interest beneficiary”
« bénéficiaire détenant une participation majoritaire »
“majority-interest beneficiary”, of a trust at any time, means a person whose interest as a beneficiary, if any, at that time
(a) in the income of the trust has, together with the interests as a beneficiary in the income of the trust of all persons with whom the person is affiliated, a fair market value that is greater than 50% of the fair market value of all the interests as a beneficiary in the income of the trust; or
(b) in the capital of the trust has, together with the interests as a beneficiary in the capital of the trust of all persons with whom the person is affiliated, a fair market value that is greater than 50% of the fair market value of all the interests as a beneficiary in the capital of the trust.
“majority-interest group of beneficiaries”
« groupe de bénéficiaires détenant une participation majoritaire »
“majority-interest group of beneficiaries”, of a trust at any time, means a group of persons each of whom is a beneficiary under the trust at that time such that
(a) if one person held the interests as a beneficiary of all of the members of the group, that person would be a majority-interest beneficiary of the trust; and
(b) if any member of the group were not a member, the test described in paragraph (a) would not be met.
(3) Subsection 251.1(4) of the Act is amended by striking out the word “and” at the end of paragraph (a) and by adding the following after paragraph (b):
(c) notwithstanding subsection 104(1), a reference to a trust does not include a reference to the trustee or other persons who own or control the trust property; and
(d) in determining whether a person is affiliated with a trust,
(i) if the amount of income or capital of the trust that a person may receive as a beneficiary under the trust depends on the exercise by any person of, or the failure by any person to exercise, a discretionary power, that person is deemed to have fully exercised, or to have failed to exercise, the power, as the case may be,
(ii) the interest of a person in a trust as a beneficiary is disregarded in determining whether the person deals at arm’s length with the trust if the person would, in the absence of the interest as a beneficiary, be considered to deal at arm’s length with the trust,
(iii) a trust is not a majority interest beneficiary of another trust unless the trust has an interest as a beneficiary in the income or capital, as the case may be, of the other trust, and
(iv) in determining whether a contributor to one trust is affiliated with a contributor to another trust, individuals connected by blood, marriage, common-law partnership or adoption are deemed to be affiliated with one another.
(4) Subsections (1) to (3) apply in determining whether persons are, at any time after March 22, 2004, affiliated, except that paragraph 251.1(4)(d) of the Act, as enacted by subsection (3), is to be read without reference to subparagraph (iv) in determining whether persons are, before September 16, 2004, affiliated.
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