Budget Implementation Act, 2006, No. 2 (S.C. 2007, c. 2)
Full Document:
Assented to 2007-02-21
12. (1) Subsection 74.1(2) of the Act is replaced by the following:
Marginal note:Transfers and loans to minors
(2) If an individual has transferred or lent property, either directly or indirectly, by means of a trust or by any other means whatever, to or for the benefit of a person who was under 18 years of age (other than an amount received in respect of that person either as a consequence of the operation of subsection 122.61(1) or under section 4 of the Universal Child Care Benefit Act) and who
(a) does not deal with the individual at arm’s length, or
(b) is the niece or nephew of the individual,
any income or loss, as the case may be, of that person for a taxation year from the property or from property substituted for that property, that relates to the period in the taxation year throughout which the individual is resident in Canada, is deemed to be income or a loss, as the case may be, of the individual and not of that person unless that person has, before the end of the taxation year, attained the age of 18 years.
(2) Subsection (1) applies in respect of amounts received after June 30, 2006.
13. (1) The portion of subsection 85(5.1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Acquisition of certain tools — capital cost and deemed depreciation
(5.1) If subsection (1) has applied in respect of the acquisition at any particular time of any depreciable property by a corporation from an individual, the cost of the property to the individual was included in computing an amount under paragraph 8(1)(r) or (s) in respect of the individual, and the amount that would be the cost of the property to the individual immediately before the transfer if this Act were read without reference to subsection 8(7) (which amount is in this subsection referred to as the “individual’s original cost”) exceeds the individual’s proceeds of disposition of the property,
(2) Subsection (1) applies to the 2006 and subsequent taxation years.
14. (1) The portion of subsection 97(5) of the Act before paragraph (a) is replaced by the following:
Marginal note:Acquisition of certain tools — capital cost and deemed depreciation
(5) If subsection (2) has applied in respect of the acquisition at any particular time of any depreciable property by a partnership from an individual, the cost of the property to the individual was included in computing an amount under paragraph 8(1)(r) or (s) in respect of the individual, and the amount that would be the cost of the property to the individual immediately before the transfer if this Act were read without reference to subsection 8(7) (which amount is in this subsection referred to as the “individual’s original cost”) exceeds the individual’s proceeds of disposition of the property,
(2) Subsection (1) applies to the 2006 and subsequent taxation years.
15. (1) Paragraph 104(21.2)(b) of the Act is replaced by the following:
(b) the beneficiary is, for the purposes of sections 3, 74.3 and 111 as they apply for the purposes of section 110.6,
(i) deemed to have disposed of the capital property referred to in clause (ii)(A), (B) or (C) if a taxable capital gain is determined in respect of the beneficiary for the beneficiary’s taxation year in which the designation year ends under those clauses, and
(ii) deemed to have a taxable capital gain for the beneficiary’s taxation year in which the designation year ends
(A) from a disposition of a capital property that is qualified farm property (as defined for the purpose of section 110.6) of the beneficiary equal to the amount determined by the formula
(A × B × C)/(D × E)
(B) from a disposition of a capital property that is a qualified small business corporation share (as defined for the purpose of section 110.6) of the beneficiary equal to the amount determined by the formula
(A × B × F)/(D × E)
and
(C) from a disposition of a capital property that is a qualified fishing property (as defined for the purpose of section 110.6) of the beneficiary equal to the amount determined by the formula
(A × B × I)/(D × E)
where
- A
- is the lesser of
(I) the amount determined by the formula
G - H
where
- G
- is the total of amounts designated under subsection (21) for the designation year by the trust, and
- H
- is the total of amounts designated under subsection (13.2) for the designation year by the trust, and
(II) the trust’s eligible taxable capital gains for the designation year,
- B
- is the amount, if any, by which the amount designated under subsection (21) for the designation year by the trust in respect of the beneficiary exceeds the amount designated under subsection (13.2) for the year by the trust in respect of the beneficiary for the taxation year,
- C
- is the amount, if any, that would be determined under paragraph 3(b) for the designation year in respect of the trust’s capital gains and capital losses if the only properties referred to in that paragraph were qualified farm properties of the trust disposed of by it after 1984,
- D
- is the total of all amounts each of which is the amount determined for B for the designation year in respect of a beneficiary under the trust,
- E
- is the total of the amounts determined for C, F and I for the designation year in respect of the beneficiary,
- F
- is the amount, if any, that would be determined under paragraph 3(b) for the designation year in respect of the trust’s capital gains and capital losses if the only properties referred to in that paragraph were qualified small business corporation shares of the trust, other than qualified farm property, disposed of by it after June 17, 1987, and
- I
- is the amount, if any, that would be determined under paragraph 3(b) for the designation year in respect of the trust’s capital gains and capital losses if the only properties referred to in that paragraph were qualified fishing properties of the trust disposed of by it on or after May 2, 2006,
(2) Subsection (1) applies to taxation years of a trust that end on or after May 2, 2006.
16. (1) Subsection 108(1) of the Act is amended by adding the following in alphabetical order:
“qualified fishing property”
« bien de pêche admissible »
“qualified fishing property” of an individual has the meaning assigned by subsection 110.6(1);
(2) Subsection (1) applies after May 1, 2006.
17. (1) The definitions “interest in a family farm partnership”, “qualified farm property” and “share of the capital stock of a family farm corporation” in subsection 110.6(1) of the Act are replaced by the following:
“interest in a family farm partnership”
« participation dans une société de personnes agricole familiale »
“interest in a family farm partnership” of an individual (other than a trust that is not a personal trust) at any time means a partnership interest owned by the individual at that time if
(a) throughout any 24-month period ending before that time, more than 50% of the fair market value of the property of the partnership was attributable to
(i) property that was used principally in the course of carrying on the business of farming in Canada in which the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C) was actively engaged on a regular and continuous basis, by
(A) the partnership,
(B) the individual,
(C) where the individual is a personal trust, a beneficiary of the trust,
(D) a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C),
(E) a corporation, a share of the capital stock of which was a share of the capital stock of a family farm corporation of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), or
(F) a partnership, a partnership interest of which was an interest in a family farm partnership of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C),
(ii) shares of the capital stock or indebtedness of one or more corporations all or substantially all of the fair market value of the property of which was attributable to properties described in subparagraph (iv),
(iii) a partnership interest in or indebtedness of one or more partnerships all or substantially all of the fair market value of the property of which was attributable to properties described in subparagraph (iv), or
(iv) properties described in any of subparagraphs (i) to (iii), and
(b) at that time, all or substantially all of the fair market value of the property of the partnership was attributable to property described in subparagraph (a)(iv);
“qualified farm property”
« bien agricole admissible »
“qualified farm property” of an individual (other than a trust that is not a personal trust) at any time means a property owned at that time by the individual, the spouse or common-law partner of the individual or a partnership, an interest in which is an interest in a family farm partnership of the individual or the individual’s spouse or common-law partner that is
(a) real or immovable property that was used principally in the course of carrying on the business of farming in Canada by,
(i) the individual,
(ii) if the individual is a personal trust, a beneficiary of the trust that is entitled to receive directly from the trust any income or capital of the trust,
(iii) a spouse, common-law partner, child or parent of a person referred to in subparagraph (i) or (ii),
(iv) a corporation, a share of the capital stock of which is a share of the capital stock of a family farm corporation of an individual referred to in any of subparagraphs (i) to (iii), or
(v) a partnership, an interest in which is an interest in a family farm partnership of an individual referred to in any of subparagraphs (i) to (iii),
(b) a share of the capital stock of a family farm corporation of the individual or the individual’s spouse or common-law partner,
(c) an interest in a family farm partnership of the individual or the individual’s spouse or common-law partner, or
(d) an eligible capital property (which is deemed to include capital property to which paragraph 70(5.1)(b) or 73(3.1)(f) applies) used by a person or partnership referred to in any of subparagraphs (a)(i) to (v), or by a personal trust from which the individual acquired the property, in the course of carrying on the business of farming in Canada;
“share of the capital stock of a family farm corporation”
« action du capital-actions d’une société agricole familiale »
“share of the capital stock of a family farm corporation” of an individual (other than a trust that is not a personal trust) at any time means a share of the capital stock of a corporation owned by the individual at that time if
(a) throughout any 24-month period ending before that time, more than 50% of the fair market value of the property owned by the corporation was attributable to
(i) property that was used principally in the course of carrying on the business of farming in Canada in which the individual, a beneficiary referred to in clause (C) or a spouse or common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C) was actively engaged on a regular and continuous basis, by
(A) the corporation,
(B) the individual,
(C) where the individual is a personal trust, a beneficiary of the trust,
(D) a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C),
(E) another corporation that is related to the corporation and of which a share of the capital stock was a share of the capital stock of a family farm corporation of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), or
(F) a partnership, an interest in which was an interest in a family farm partnership of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of such a beneficiary,
(ii) shares of the capital stock or indebtedness of one or more corporations all or substantially all of the fair market value of the property of which was attributable to property described in subparagraph (iv),
(iii) a partnership interest in or indebtedness of one or more partnerships all or substantially all of the fair market value of the property of which was attributable to properties described in subparagraph (iv), or
(iv) properties described in any of subparagraphs (i) to (iii), and
(b) at that time, all or substantially all of the fair market value of the property owned by the corporation was attributable to property described in subparagraph (a)(iv);
(2) Paragraph (b) of the description of A in the definition “annual gains limit” in subsection 110.6(1) of the Act is replaced by:
(b) the amount that would be determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and losses if the only properties referred to in that paragraph were qualified farm properties disposed of by the individual after 1984, qualified small business corporation shares disposed of by the individual after June 17, 1987 and qualified fishing properties disposed of by the individual on or after May 2, 2006, and
(3) Subparagraph (a)(i) of the definition “share of the capital stock of a family farm corporation” in subsection 110.6(1) of the Act is amended by striking out the word “or” at the end of clause (D) and by adding the following after that clause:
(D.1) another corporation that is related to the corporation and of which a share of the capital stock was a share of the capital stock of a family farm corporation of the individual, a beneficiary referred to in clause (C) or a spouse or common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), or
(4) Subsection 110.6(1) of the Act is amended by adding the following in alphabetical order:
“interest in a family fishing partnership”
« participation dans une société de personnes de pêche familiale »
“interest in a family fishing partnership” of an individual (other than a trust that is not a personal trust) at any time means a partnership interest owned by the individual at that time if
(a) throughout any 24-month period ending before that time, more than 50% of the fair market value of the property of the partnership was attributable to
(i) property that was used principally in the course of carrying on the business of fishing in Canada in which the individual, a beneficiary referred to in clause (C) or a spouse or common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C) was actively engaged on a regular and continuous basis, by
(A) the partnership,
(B) the individual,
(C) where the individual is a personal trust, a beneficiary of the trust,
(D) a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C),
(E) a corporation, a share of the capital stock of which was a share of the capital stock of a family fishing corporation of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), or
(F) a partnership, a partnership interest of which was an interest in a family fishing partnership of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C),
(ii) shares of the capital stock or indebtedness of one or more corporations all or substantially all of the fair market value of the property of which was attributable to properties described in subparagraph (iv),
(iii) a partnership interest in or indebtedness of one or more partnerships all or substantially all of the fair market value of the property of which was attributable to properties described in subparagraph (iv), or
(iv) properties described in any of subparagraph (i) to (iii), and
(b) at that time, all or substantially all of the fair market value of the property of the partnership was attributable to property described in subparagraph (a)(iv);
“qualified fishing property”
« bien de pêche admissible »
“qualified fishing property” of an individual (other than a trust that is not a personal trust) at any time means a property owned at that time by the individual, the spouse or common-law partner of the individual or a partnership, an interest in which is an interest in a family fishing partnership of the individual or the individual’s spouse or common-law partner that is
(a) real or immovable property or a fishing vessel that was used principally in the course of carrying on the business of fishing in Canada by,
(i) the individual,
(ii) if the individual is a personal trust, a beneficiary of the trust that is entitled to receive directly from the trust any income or capital of the trust,
(iii) a spouse, common-law partner, child or parent of a person referred to in subparagraph (i) or (ii),
(iv) a corporation, a share of the capital stock of which is a share of the capital stock of a family fishing corporation of an individual referred to in any of subparagraphs (i) to (iii), or
(v) a partnership, an interest in which is an interest in a family fishing partnership of an individual referred to in any of subparagraphs (i) to (iii),
(b) a share of the capital stock of a family fishing corporation of the individual or the individual’s spouse or common-law partner,
(c) an interest in a family fishing partnership of the individual or the individual’s spouse or common-law partner, or
(d) an eligible capital property (which is deemed to include capital property to which paragraph 70(5.1)(b) or 73(3.1)(f) applies) used by a person or partnership referred to in any of subparagraphs (a)(i) to (v), or by a personal trust from which the individual acquired the property, in the course of carrying on the business of fishing in Canada;
“share of the capital stock of a family fishing corporation”
« action du capital-actions d’une société de pêche familiale »
“share of the capital stock of a family fishing corporation” of an individual (other than a trust that is not a personal trust) at any time means a share of the capital stock of a corporation owned by the individual at that time if
(a) throughout any 24-month period ending before that time, more than 50% of the fair market value of the property owned by the corporation was attributable to
(i) property that was used principally in the course of carrying on the business of fishing in Canada in which the individual, a beneficiary referred to in clause (C) or a spouse or common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), was actively engaged on a regular and continuous basis, by
(A) the corporation,
(B) the individual,
(C) where the individual is a personal trust, a beneficiary of the trust,
(D) a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C),
(E) another corporation that is related to the corporation and of which a share of the capital stock was a share of the capital stock of a family fishing corporation of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), or
(F) a partnership, an interest in which was an interest in a family fishing partnership of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of such a beneficiary,
(ii) shares of the capital stock or indebtedness of one or more corporations all or substantially all of the fair market value of the property of which was attributable to property described in subparagraph (iv),
(iii) a partnership interest in or indebtedness of one or more partnerships all or substantially all of the fair market value of the property of which was attributable to properties described in subparagraph (iv), or
(iv) properties described in any of subparagraphs (i) to (iii), and
(b) at that time, all or substantially all of the fair market value of the property owned by the corporation was attributable to property described in subparagraph (a)(iv).
(5) Section 110.6 of the Act is amended by adding the following after subsection (1.1):
Marginal note:Property used in a fishing business
(1.2) For the purposes of applying the definition “qualified fishing property”, in subsection (1), of an individual, at any time, a property owned at that time by the individual, the spouse or common-law partner of the individual, or a partnership, an interest in which is an interest in a family fishing partnership of the individual or of the individual’s spouse or common-law partner, will not be considered to have been used in the course of carrying on the business of fishing in Canada, unless
(a) throughout the period of at least 24 months immediately preceding that time, the property or property for which the property was substituted (in this paragraph referred to as “the property”) was owned, by any one or more of
(i) the individual, or a spouse, common-law partner, child or parent of the individual,
(ii) a partnership, an interest in which is an interest in a family fishing partnership of the individual or of the individual’s spouse or common-law partner,
(iii) if the individual is a personal trust, the individual from whom the trust acquired the property or a spouse, common-law partner, child or parent of that individual, or
(iv) a personal trust from which the individual or a child or parent of the individual acquired the property; and
(b) either
(i) in at least two years while the property was owned by the one or more persons referred to in paragraph (a),
(A) the gross revenue of a person (in this clause referred to as the “operator”) referred to in paragraph (a) from the fishing business referred to in clause (B) for the period during which the property was owned by a person described in paragraph (a) exceeded the income of the operator from all other sources for that period, and
(B) the property was used principally in a fishing business carried on in Canada in which an individual referred to in paragraph (a), or where the individual is a personal trust, a beneficiary of the trust, was actively engaged on a regular and continuous basis, or
(ii) throughout a period of at least 24 months while the property was owned by one or more persons or partnerships referred to in paragraph (a), the property was used by a corporation referred to in subparagraph (a)(iv) of the definition “qualified fishing property” in subsection (1) or by a partnership referred to in paragraph (a)(v) of that definition in a fishing business in which an individual referred to in any of subparagraphs (a)(i) to (iii) of that definition was actively engaged on a regular and continuous basis.
Marginal note:Property used in a farming business
(1.3) For the purposes of applying the definition “qualified farm property”, in subsection (1), of an individual, at any time, a property owned at that time by the individual, the spouse or common-law partner of the individual, or a partnership, an interest in which is an interest in a family farm partnership of the individual or of the individual’s spouse or common-law partner, will not be considered to have been used in the course of carrying on the business of farming in Canada, unless
(a) throughout the period of at least 24 months immediately preceding that time, the property or property for which the property was substituted (in this paragraph referred to as “the property”) was owned, by any one or more of
(i) the individual, or a spouse, common-law partner, child or parent of the individual,
(ii) a partnership, an interest in which is an interest in a family farm partnership of the individual or of the individual’s spouse or common-law partner,
(iii) if the individual is a personal trust, the individual from whom the trust acquired the property or a spouse, common-law partner, child or parent of that individual, or
(iv) a personal trust from which the individual or a child or parent of the individual acquired the property;
(b) if paragraph (c) does not apply, either
(i) in at least two years while the property was owned by the one or more persons referred to in paragraph (a),
(A) the gross revenue of a person (in this clause referred to as the “operator”) referred to in paragraph (a) from the farming business referred to in clause (B) for the period during which the property was owned by a person described in paragraph (a) exceeded the income of the operator from all other sources for that period, and
(B) the property was used principally in a farming business carried on in Canada in which an individual referred to in paragraph (a), or where the individual is a personal trust, a beneficiary of the trust, was actively engaged on a regular and continuous basis, or
(ii) throughout a period of at least 24 months while the property was owned by one or more persons or partnerships referred to in paragraph (a), the property was used by a corporation referred to in subparagraph (a)(iv) of the definition “qualified farm property” in subsection (1) or by a partnership referred to in subparagraph (a)(v) of that definition in a farming business in which an individual referred to in any of subparagraphs (a)(i) to (iii) of that definition was actively engaged on a regular and continuous basis; or
(c) if the property or property for which the property was substituted was last acquired by the individual or partnership before June 18, 1987 or after June 17, 1987 under an agreement in writing entered into before that date,
(i) in the year the property was disposed of by the individual, the property was used principally in the course of carrying on the business of farming in Canada by
(A) the individual, or a spouse, common-law partner, child or parent of the individual,
(B) a beneficiary referred to in subparagraph (a)(ii) in the definition “qualified farm property” in subsection (1) or a spouse, common-law partner, child or parent of that beneficiary,
(C) a corporation referred to in subparagraph (a)(iv) in the definition “qualified farm property” in subsection (1),
(D) a partnership referred to in subparagraph (a)(v) in the definition “qualified farm property” in subsection (1), or
(E) a personal trust from which the individual acquired the property, or
(ii) in at least five years during which the property was owned by a person described in clauses (A) to (E), the property was used principally in the course of carrying on the business of farming in Canada by
(A) the individual, or a spouse, common-law partner, child or parent of the individual,
(B) a beneficiary referred to in subparagraph (a)(ii) in the definition “qualified farm property” in subsection (1) or a spouse, common-law partner, child or parent of that beneficiary,
(C) a corporation referred to in subparagraph (a)(iv) in the definition “qualified farm property” in subsection (1),
(D) a partnership referred to in subparagraph (a)(v) in the definition “qualified farm property” in subsection (1), or
(E) a personal trust from which the individual acquired the property.
(6) The description of A in paragraph 110.6(2)(a) of the Act is replaced by the following:
- A
- is the total of all amounts each of which is an amount deducted under this section in computing the individual’s taxable income for a preceding taxation year that ended
(i) before 1988, or
(ii) after October 17, 2000,
(7) Paragraph 110.6(2)(d) of the Act is replaced by the following:
(d) the amount that would be determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and capital losses if the only properties referred to in that paragraph were qualified farm properties of the individual disposed of after June 17, 1987.
(8) Paragraph 110.6(2.1)(d) of the Act is replaced by the following:
(d) the amount that would be determined in respect of the individual for the year under paragraph 3(b) (to the extent that that amount is not included in computing the amount determined under paragraph (2)(d) or (2.2)(d) in respect of the individual) in respect of capital gains and capital losses if the only properties referred to in paragraph 3(b) were qualified small business corporation shares of the individual disposed of after June 17, 1987.
(9) Section 110.6 of the Act is amended by adding the following after subsection (2.1):
Marginal note:Capital gains deduction — qualified fishing property
(2.2) In computing the taxable income for a taxation year of an individual (other than a trust) who was resident in Canada throughout the year and who, in the year or a preceding year, disposed of a property that was, at the time of disposition, a qualified fishing property of the individual, there may be deducted the amount that the individual claims not exceeding the least of
(a) the amount determined by the formula in paragraph (2)(a) in respect of the individual for the year;
(b) the amount, if any, by which the individual’s cumulative gains limit at the end of that year exceeds the total of all amounts each of which is an amount deducted under subsection (2) or (2.1) in computing the individual’s taxable income for the year;
(c) the amount, if any, by which the individual’s annual gains limit for the year exceeds the total of all amounts each of which is an amount deducted under subsection (2) or (2.1) in computing the individual’s taxable income for the year; and
(d) the amount that would be determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and capital losses if the only properties referred to in that paragraph were qualified fishing properties of the individual disposed of on or after May 2, 2006.
(10) Subsections 110.6(4) to (8) of the Act are replaced by the following:
Marginal note:Maximum capital gains deduction
(4) Notwithstanding subsections (2), (2.1) and (2.2), the total amount that may be deducted under this section in computing an individual’s income for a taxation year shall not exceed the amount determined by the formula in paragraph (2)(a) in respect of the individual for the year.
Marginal note:Deemed resident in Canada
(5) For the purposes of subsections (2), (2.1) and (2.2), an individual is deemed to have been resident in Canada throughout a particular taxation year if
(a) the individual was resident in Canada at any time in the particular taxation year; and
(b) the individual was resident in Canada throughout the immediately preceding taxation year or throughout the immediately following taxation year.
Marginal note:Failure to report capital gain
(6) Notwithstanding subsections (2), (2.1) and (2.2), no amount may be deducted under this section in respect of a capital gain of an individual for a particular taxation year in computing the individual’s taxable income for the particular taxation year, if
(a) the individual knowingly or under circumstances amounting to gross negligence
(i) fails to file the individual’s return of income for the particular taxation year within one year after the taxpayer’s filing-due date for the particular taxation year, or
(ii) fails to report the capital gain in the individual’s return of income for the particular taxation year; and
(b) the Minister establishes the facts justifying the denial of such an amount under this section.
Marginal note:Deduction not permitted
(7) Notwithstanding subsections (2), (2.1) and (2.2), no amount may be deducted under this section in computing an individual’s taxable income for a taxation year in respect of a capital gain of the individual for the taxation year, if the capital gain is from a disposition of property which disposition is part of a series of transactions or events
(a) to which subsection 55(2) would apply if this Act were read without reference to paragraph 55(3)(b); or
(b) in which any property is acquired by a corporation or partnership for consideration that is significantly less than the fair market value of the property at the time of acquisition (other than an acquisition as the result of an amalgamation or merger of corporations or the winding-up of a corporation or partnership or a distribution of property of a trust in satisfaction of all or part of a corporation’s capital interest in the trust).
Marginal note:Deduction not permitted
(8) Nothwithstanding subsections (2), (2.1) and (2.2), where an individual has a capital gain for a taxation year from the disposition of a property and it can reasonably be concluded, having regard to all the circumstances, that a significant part of the capital gain is attributable to the fact that dividends were not paid on a share (other than a prescribed share) or that dividends paid on such a share in the taxation year or in any preceding taxation year were less than 90% of the average annual rate of return on that share for that year, no amount in respect of that capital gain shall be deducted under this section in computing the individual’s taxable income for the year.
(11) Paragraph 110.6(12)(b) of the Act is replaced by the following:
(b) the amount, if any, that would be determined in respect of the trust for that year under paragraph 3(b) in respect of capital gains and capital losses if the only properties referred to in that paragraph were qualified farm properties disposed of by it after 1984, qualified small business corporation shares disposed of by it after June 17, 1987 and qualified fishing properties disposed of by it on or after May 2, 2006, and
(12) Subsections (1), (2), (4) and (5) apply to dispositions of property that occur on or after May 2, 2006.
(13) Subsection (3) applies to dispositions of property that occur after 2001 and before May 2, 2006.
(14) Subsection (6) applies to preceding taxation years that end after October 17, 2000.
(15) Subsections (7) to (11) apply to taxation years that end on or after May 2, 2006.
- Date modified: