Budget Implementation Act, 2009 (S.C. 2009, c. 2)
Full Document:
- HTMLFull Document: Budget Implementation Act, 2009 (Accessibility Buttons available) |
- PDFFull Document: Budget Implementation Act, 2009 [2364 KB]
Assented to 2009-03-12
PART 1AMENDMENTS IN RESPECT OF INCOME TAX
R.S., c. 1 (5th Supp.)Income Tax Act
6. (1) Section 18.2 of the Act is repealed.
(2) Subsection (1) applies in respect of interest and other borrowing costs paid or payable in respect of a period or periods that begin after 2011.
7. (1) Subsection 20(3) of the Act is replaced by the following:
Marginal note:Borrowed money
(3) For greater certainty, if a taxpayer uses borrowed money to repay money previously borrowed, or to pay an amount payable for property described in subparagraph (1)(c)(ii) previously acquired (which previously borrowed money or amount payable in respect of previously acquired property is, in this subsection, referred to as the “previous indebtedness”), subject to subsection 20.1(6), for the purposes of paragraphs (1)(c), (e) and (e.1), subsections 20.1(1) and (2), section 21 and subparagraph 95(2)(a)(ii), and for the purpose of paragraph 20(1)(k) of the Income Tax Act, Chapter 148 of the Revised Statutes of Canada, 1952, the borrowed money is deemed to be used for the purpose for which the previous indebtedness was used or incurred, or was deemed by this subsection to have been used or incurred.
(2) Subsection (1) applies in respect of interest paid or payable in respect of a period or periods that begin after January 27, 2009.
8. (1) The Act is amended by adding the following after section 20.3:
Marginal note:Definitions
20.4 (1) The definitions in section 12.5 apply for the purposes of this section.
Marginal note:Transition year income deduction
(2) There shall be deducted in computing an insurer’s income for its transition year from an insurance business carried on by it in Canada in the transition year the absolute value of the negative amount, if any, of the insurer’s reserve transition amount in respect of that insurance business.
Marginal note:Transition year income inclusion reversal
(3) If an amount has been included under subsection 12.5(2) in computing an insurer’s income for its transition year from an insurance business carried on by it in Canada, there shall be deducted in computing the insurer’s income, for each particular taxation year of the insurer that ends after the beginning of the transition year, from that insurance business, the amount determined by the formula
A × B/1825
where
- A
- is the amount included under subsection 12.5(2) in computing the insurer’s income for the transition year from that insurance business; and
- B
- is the number of days in the particular taxation year that are before the day that is 1825 days after the first day of the transition year.
Marginal note:Ceasing to carry on business
(4) If at any time an insurer ceases to carry on all or substantially all of an insurance business (referred to in this subsection as the “discontinued business”), and none of subsections 12.5(4) to (6) apply, there shall be deducted in computing the insurer’s income from the discontinued business for the insurer’s taxation year that includes the time that is immediately before that time, the amount determined by the formula
A – B
where
- A
- is any amount included under subsection 12.5(2) in computing the insurer’s income from the discontinued business for its transition year; and
- B
- is the total of all amounts each of which is an amount deducted under subsection (3) in computing the insurer’s income from the discontinued business for a taxation year that began before that time.
(2) Subsection (1) applies to taxation years that begin after September 2006.
9. (1) Subparagraph 39(1)(a)(ii.2) of the Act is replaced by the following:
(ii.2) a property if the disposition is a disposition to which subsection 142.4(4) or (5) or 142.5(1) applies,
(2) Subsection (1) applies to taxation years that begin after September 2006.
10. (1) Subsection 40(3.5) of the Act is amended by adding the following after paragraph (b):
(b.1) a share of the capital stock of a SIFT wind-up corporation in respect of a SIFT wind-up entity is, if the share was acquired before 2013, deemed to be a property that is identical to equity in the SIFT wind-up entity;
(2) Section 40 of the Act is amended by adding the following after subsection (9):
Marginal note:Application
(10) Subsection (11) applies in computing at any particular time a corporation’s gain or loss (in this subsection and subsection (11) referred to as the “new gain” or “new loss”, as the case may be), in respect of any part (which in this subsection and subsection (11) is referred to as the “relevant part” and which may for greater certainty be the whole) of a foreign currency debt of the corporation, arising from a fluctuation in the value of the currency of the foreign currency debt (other than, for greater certainty, a gain or a capital loss that arises because of the application of subsection 111(12)), if at any time before the particular time the corporation realized a capital loss or gain in respect of the foreign currency debt because of subsection 111(12).
Marginal note:Gain or loss on foreign currency debt
(11) If this subsection applies, the new gain is the positive amount, or the new loss is the negative amount, as the case may be, determined by the formula
A + B – C
where
- A
- is
(a) if the corporation would, but for any application of subsection 111(12), recognize a new gain, the amount of the new gain, determined without reference to this subsection, or
(b) if the corporation would, but for any application of subsection 111(12), recognize a new loss, the amount of the new loss, determined without reference to this subsection, multiplied by (-1);
- B
- is the total of all amounts each of which is that portion of the amount of a capital loss realized by the corporation at any time before the particular time, in respect of the foreign currency debt and because of subsection 111(12), that is reasonably attributable to
(a) the relevant part of the foreign currency debt at the particular time, or
(b) the forgiven amount, if any, (within the meaning assigned by subsection 80(1)) in respect of the foreign currency debt at the particular time; and
- C
- is the total of all amounts each of which is that portion of the amount of a gain realized by the corporation at any time before the particular time, in respect of the foreign currency debt and because of subsection 111(12), that is reasonably attributable to
(a) the relevant part of the foreign currency debt at the particular time, or
(b) the forgiven amount, if any, (within the meaning assigned by subsection 80(1)) in respect of the foreign currency debt at the particular time.
(3) Subsection (1) applies to dispositions that occur on or after November 28, 2008.
(4) Subsection (2) applies after 2005.
11. (1) Paragraph 53(1)(e) of the Act is amended by adding “and” at the end of subparagraph (xii), by striking out “and” at the end of subparagraph (xiii) and by repealing subparagraph (xiv).
(2) Paragraph 53(2)(c) of the Act is amended by adding “and” at the end of subparagraph (xi), by striking out “and” at the end of subparagraph (xii) and by repealing subparagraph (xiii).
(3) Subsections (1) and (2) apply after 2011.
12. (1) Paragraph (c) of the definition “superficial loss” in section 54 of the Act is replaced by the following:
(c) a disposition deemed to have been made by paragraph 33.1(11)(a), subsection 45(1), section 48 as it read in its application before 1993, section 50 or 70, subsection 104(4), section 128.1, paragraph 132.2(1)(f), subsection 138(11.3) or 142.5(2), section 142.6, or any of subsections 144(4.1) and (4.2) and 149(10),
(2) The portion of the definition “superficial loss” in section 54 of the Act after paragraph (h) is replaced by the following:
and, for the purpose of this definition,
(i) a right to acquire a property (other than a right, as security only, derived from a mortgage, hypothec, agreement for sale or similar obligation) is deemed to be a property that is identical to the property, and
(j) a share of the capital stock of a SIFT wind-up corporation in respect of a SIFT wind-up entity is, if the share was acquired before 2013, deemed to be a property that is identical to equity in the SIFT wind-up entity.
(3) Subsection (1) applies to taxation years that begin after September 2006.
(4) Subsection (2) applies to dispositions that occur after February 2, 2009.
13. (1) Paragraph 56(1)(d) of the Act is amended by striking out “or” at the end of subparagraph (i), by adding “or” at the end of subparagraph (ii) and by adding the following after subparagraph (ii):
(iii) received out of or under an annuity contract issued or effected as a TFSA;
(2) Paragraph 56(1)(r) of the Act is amended by striking out “or” at the end of subparagraph (ii) and by adding the following after subparagraph (iii):
(iv) financial assistance provided under a program established by a government, or government agency, in Canada that provides income replacement benefits similar to income replacement benefits provided under a program established under the Employment Insurance Act, or
(v) amounts received by the taxpayer in the year under the Wage Earner Protection Program Act in respect of wages (within the meaning of that Act);
(3) Subsection (1) applies to the 2009 and subsequent taxation years.
(4) Subsection (2) applies to the 2003 and subsequent taxation years except that, in its application to the 2003 to 2007 taxation years, paragraph 56(1)(r) of the Act, as amended by subsection (2), is to be read without reference to its subparagraph (v).
- Date modified: