Technical Tax Amendments Act, 2012 (S.C. 2013, c. 34)
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Assented to 2013-06-26
PART 4R.S., c. 1 (5th Supp.)AMENDMENTS TO THE INCOME TAX ACT RELATED TO BIJURALISM
114. The portion of subsection 66.3(2) of the Act before paragraph (a) is replaced by the following:
Marginal note:Deductions from paid-up capital
(2) If, at any time after May 23, 1985, a corporation has issued a share of its capital stock under circumstances described in paragraph (i) of the definition “Canadian exploration expense” in subsection 66.1(6), paragraph (g) of the definition “Canadian development expense” in subsection 66.2(5) or paragraph (c) of the definition “Canadian oil and gas property expense” in subsection 66.4(5) or has issued a share of its capital stock on the exercise of an interest in or right to — or, for civil law, a right in or to — such a share granted under circumstances described in any of those paragraphs, in computing, at any particular time after that time, the paid-up capital in respect of the class of shares of the capital stock of the corporation that included that share
115. (1) Clause 66.4(2)(a)(ii)(A) of the Act is replaced by the following:
(A) an amount included in the taxpayer’s income for the year by virtue of a disposition in the year of inventory described in section 66.3 that was a share or any interest in or right to — or, for civil law, any right in or to — a share acquired by the taxpayer under circumstances described in paragraph (c) of the definition “Canadian oil and gas property expense” in subsection (5), or
(2) Paragraph (c) of the definition “Canadian oil and gas property expense” in subsection 66.4(5) of the Act is replaced by the following:
(c) any cost or expense referred to in paragraph (a) incurred by the taxpayer pursuant to an agreement in writing with a corporation, entered into before 1987, under which the taxpayer incurred the cost or expense solely as consideration for shares, other than prescribed shares, of the capital stock of the corporation issued to the taxpayer or any interest in or right to — or, for civil law, any right in or to — such shares,
(3) The portion of the description of F in the definition “cumulative Canadian oil and gas property expense” in subsection 66.4(5) of the Act before paragraph (a) is replaced by the following:
- F
- is the total of all amounts each of which is an amount in respect of property described in paragraph (a), (c) or (d) of the definition “Canadian resource property” in subsection 66(15) or any right to or interest in — or, for civil law, any right in or to — such a property, other than such a right or interest that the taxpayer has by reason of being a beneficiary under a trust or a member of a partnership, (in this description referred to as “the particular property”) disposed of by the taxpayer before that time equal to the amount, if any, by which
116. (1) Clause 66.7(1)(b)(i)(A) of the Act is replaced by the following:
(A) the amount included in computing its income for the year under paragraph 59(3.2)(c) that may reasonably be regarded as attributable to the disposition by it in the year or a preceding taxation year of any interest in or right to — or, for civil law, any right in or to — the particular property to the extent that the proceeds of the disposition have not been included in determining an amount under clause 29(25)(d)(i)(A) of the Income Tax Application Rules, this clause, clause (3)(b)(i)(A) or paragraph (10)(g) for a preceding taxation year,
(2) Clause 66.7(2)(b)(i)(A) of the Act is replaced by the following:
(A) the amount included under subsection 59(1) in computing its income for the year that can reasonably be regarded as attributable to the disposition by it of any interest in or right to — or, for civil law, any right in or to — the particular property, or
(3) Clause 66.7(3)(b)(i)(A) of the Act is replaced by the following:
(A) the amount included in computing its income for the year under paragraph 59(3.2)(c) that may reasonably be regarded as being attributable to the disposition by it in the year or a preceding taxation year of any interest in or right to — or, for civil law, any right in or to — the particular property to the extent that the proceeds have not been included in determining an amount under clause 29(25)(d)(i)(A) of the Income Tax Application Rules, this clause, clause (1)(b)(i)(A) or paragraph (10)(g) for a preceding taxation year,
117. The portion of paragraph 79.1(6)(b) of the Act before subparagraph (i) is replaced by the following:
(b) all amounts each of which is an outlay or expense made or incurred, or a specified amount at that time of a debt that is assumed, by the creditor at or before that time to protect the creditor’s interest, or for civil law the creditor’s right, in the particular property, except to the extent the outlay or expense
118. Paragraph 80(2)(o) of the Act is replaced by the following:
(o) notwithstanding paragraph (n), if a commercial debt obligation, for which a particular person is liable with one or more other persons, is settled at any time in respect of the particular person but not in respect of all of the other persons, the portion of the obligation that can reasonably be considered to be the particular person’s share of the obligation shall be considered to have been issued by the particular person and settled at that time and not at any subsequent time;
119. Subsection 80.04(11) of the English version of the Act is replaced by the following:
Marginal note:Joint and several, or solidary, liability
(11) If taxes, interest and penalties are payable under this Act by a person for a taxation year and those taxes, interest and penalties are payable by a debtor because of subsection (10), the debtor and the person are jointly and severally, or solidarily, liable to pay those amounts.
120. (1) Paragraphs 85(1.1)(a) and (b) of the Act are replaced by the following:
(a) a capital property (other than real or immovable property, an option in respect of such property, or an interest in real property or a real right in an immovable, owned by a non-resident person);
(b) a capital property that is real or immovable property, an option in respect of such property, or an interest in real property or a real right in an immovable, owned by a non-resident insurer if that property and the property received as consideration for that property are designated insurance property for the year;
(2) Paragraph 85(1.1)(f) of the Act is replaced by the following:
(f) an inventory (other than real or immovable property, an option in respect of such property, or an interest in real property or a real right in an immovable);
(3) Paragraph 85(1.1)(h) of the Act is replaced by the following:
(h) a capital property that is real or immovable property, an option in respect of such property, or an interest in real property or a real right in an immovable, owned by a non-resident person (other than a non-resident insurer) and used in the year in a business carried on in Canada by that person; or
(4) Subparagraph 85(2)(a)(i) of the Act is replaced by the following:
(i) a capital property (other than real or immovable property, an option in respect of such property, or an interest in real property or a real right in an immovable, if the partnership was not a Canadian partnership at the time of the disposition),
121. (1) Subparagraph (a)(ii) of the definition “investment business” in subsection 95(1) of the Act is replaced by the following:
(ii) the development of real property or immovables for sale, the lending of money, the leasing or licensing of property or the insurance or reinsurance of risks,
(2) Paragraph (g) of the definition “investment property” in subsection 95(1) of the Act is replaced by the following:
(g) real property or immovables,
(3) Paragraph (j) of the definition “investment property” in subsection 95(1) of the Act is replaced by the following:
(j) interests in, or for civil law rights in, or options in respect of, property that is included in any of paragraphs (a) to (i);
122. (1) The portion of subsection 98(3) of the Act before paragraph (a) is replaced by the following:
Marginal note:Rules applicable if partnership ceases to exist
(3) If at any particular time after 1971 a Canadian partnership has ceased to exist and all the partnership property has been distributed to persons who were members of the partnership immediately before that time so that immediately after that time each such person has, in each such property, an undivided interest, or for civil law an undivided right (which undivided interest or undivided right is referred to in this subsection as an “undivided interest or right”, as the case may be) that, when expressed as a percentage (referred to in this subsection as that person’s “percentage”) of all undivided interests or rights in the property, is equal to the person’s undivided interest or right, when so expressed, in each other such property, if each such person has jointly so elected in respect of the property in prescribed form and within the time referred to in subsection 96(4), the following rules apply:
(2) The portion of paragraph 98(3)(b) of the Act before subparagraph (i) is replaced by the following:
(b) the cost to each such person of that person’s undivided interest or right in each such property is deemed to be an amount equal to the total of
(3) Subparagraph 98(3)(b)(ii) of the Act is replaced by the following:
(ii) where the amount determined under subparagraph (a)(i) exceeds the amount determined under subparagraph (a)(ii), the amount determined under paragraph (c) in respect of the person’s undivided interest or right in the property;
(4) Paragraph 98(3)(c) of the Act is replaced by the following:
(c) the amount determined under this paragraph in respect of each such person’s undivided interest or right in each such property that was a capital property (other than depreciable property) of the partnership is such portion of the excess, if any, described in subparagraph (b)(ii) as is designated by the person in respect of the property, except that
(i) in no case shall the amount so designated in respect of the person’s undivided interest or right in any such property exceed the amount, if any, by which the person’s percentage of the fair market value of the property immediately after its distribution exceeds the person’s percentage of the cost amount to the partnership of the property immediately before its distribution, and
(ii) in no case shall the total of amounts so designated in respect of the person’s undivided interest or right in all such capital properties (other than depreciable property) exceed the excess, if any, described in subparagraph (b)(ii);
(5) Paragraph 98(3)(e) of the Act is replaced by the following:
(e) if the property so distributed by the partnership was depreciable property of the partnership of a prescribed class and any such person’s percentage of the amount that was the capital cost to the partnership of that property exceeds the amount determined under paragraph (b) to be the cost to the person of the person’s undivided interest or right in the property, for the purposes of sections 13 and 20 and any regulations made under paragraph 20(1)(a)
(i) the capital cost to the person of the person’s undivided interest or right in the property is deemed to be the person’s percentage of the amount that was the capital cost to the partnership of the property, and
(ii) the excess is deemed to have been allowed to the person in respect of the property under regulations made under paragraph 20(1)(a) in computing income for taxation years before the acquisition by the person of the undivided interest or right;
(6) Subparagraph 98(3)(g)(i) of the Act is replaced by the following:
(i) for the purposes of determining under this Act any amount relating to cumulative eligible capital, an eligible capital amount, an eligible capital expenditure or eligible capital property, each such person is deemed to have continued to carry on the business, in respect of which the property was eligible capital property and that was previously carried on by the partnership, until the time that the person disposes of the person’s undivided interest or right in the property,
123. (1) Clauses 108(2)(b)(ii)(A) and (B) of the Act are replaced by the following:
(A) the investing of its funds in property (other than real property or an interest in real property or an immovable or a real right in an immovable),
(B) the acquiring, holding, maintaining, improving, leasing or managing of any real property or an interest in real property, or of any immovable or a real right in immovables, that is capital property of the trust, or
(2) Clauses 108(2)(b)(iii)(F) and (G) of the Act are replaced by the following:
(F) real property situated in Canada, and interests in such real property, or immovables situated in Canada and real rights in such immovables, and
(G) rights to and interests in — or, for civil law, rights in or to — any rental or royalty computed by reference to the amount or value of production from a natural accumulation of petroleum or natural gas in Canada, from an oil or gas well in Canada or from a mineral resource in Canada,
(3) Paragraph 108(2)(c) of the Act is replaced by the following:
(c) the fair market value of the property of the trust at the end of 1993 was primarily attributable to real property or an interest in real property — or to immovables or a real right in immovables — and the trust was a unit trust throughout any calendar year that ended before 1994 and the fair market value of the property of the trust at the particular time is primarily attributable to property described in paragraph (a) or (b) of the definition “qualified investment” in section 204, real property or an interest in real property — or immovables or a real right in immovables — or any combination of those properties.
124. Clause (a)(ii)(A) of the definition “qualified investment” in subsection 115.2(1) of the Act is replaced by the following:
(A) real or immovable property situated in Canada,
125. (1) Paragraph 116(6)(a.1) of the Act is replaced by the following:
(a.1) a property (other than real or immovable property situated in Canada, a Canadian resource property or a timber resource property) that is described in an inventory of a business carried on in Canada by the person;
(2) Paragraph 116(6)(h) of the Act is replaced by the following:
(h) an interest, or for civil law a right, in property referred to in any of paragraphs (a) to (g); and
126. The portion of the definition “specified investment business” in subsection 125(7) of the Act before paragraph (a) is replaced by the following:
“specified investment business”
« entreprise de placement déterminée »
“specified investment business”, carried on by a corporation in a taxation year, means a business (other than a business carried on by a credit union or a business of leasing property other than real or immovable property) the principal purpose of which is to derive income (including interest, dividends, rents and royalties) from property but, except where the corporation was a prescribed labour-sponsored venture capital corporation at any time in the year, does not include a business carried on by the corporation in the year where
127. (1) The portion of subparagraph 126(2.21)(a)(i) of the Act before clause (A) is replaced by the following:
(i) where the property is real or immovable property situated in a country other than Canada,
(2) Subparagraph 126(2.21)(a)(ii) of the Act is replaced by the following:
(ii) where the property is not real or immovable property, to the government of a country with which Canada has a tax treaty at the particular time and in which the individual is resident at the particular time,
(3) The portion of subparagraph 126(2.22)(a)(i) of the Act before clause (A) is replaced by the following:
(i) where the property is real or immovable property situated in a country other than Canada,
(4) Subparagraph 126(2.22)(a)(ii) of the Act is replaced by the following:
(ii) where the property is not real or immovable property, to the government of a country with which Canada has a tax treaty at the particular time and in which the individual is resident at the particular time,
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