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Technical Tax Amendments Act, 2012 (S.C. 2013, c. 34)

Assented to 2013-06-26

  •  (1) Paragraph 81(1)(g.3) of the Act is replaced by the following:

    • Marginal note:Certain government funded trusts

      (g.3) the amount that, but for this paragraph, would be the income of the taxpayer for the year if

      • (i) the taxpayer is the trust established under

        • (A) the 1986-1990 Hepatitis C Settlement Agreement entered into by Her Majesty in right of Canada and Her Majesty in right of each of the provinces,

        • (B) the Pre-1986/Post-1990 Hepatitis C Settlement Agreement entered into by Her Majesty in right of Canada, or

        • (C) the Indian Residential Schools Settlement Agreement entered into by Her Majesty in right of Canada on May 8, 2006, and

      • (ii) the only contributions made to the taxpayer before the end of the year are those provided for under the relevant Agreement described in subparagraph (i);

  • (2) Subsection 81(1) of the Act is amended by striking out “or” at the end of paragraph (q), by adding “or” at the end of paragraph (r) and by adding the following after paragraph (r):

    • Marginal note:Salary deferral leave plans

      (s) an amount paid to the taxpayer in the year under an arrangement described in paragraph 6801(a) of the Income Tax Regulations to the extent that the amount may reasonably be considered to be attributable to amounts that

      • (i) were included in the taxpayer’s income for a preceding taxation year and were income, interest or other additional amounts, described in subparagraph 6801(a)(iv) of the Income Tax Regulations, and

      • (ii) were re-contributed by the taxpayer under the arrangement in a preceding taxation year.

  • (3) Subsection (1) applies to the 2006 and subsequent taxation years, except that for the 2006 taxation year, subparagraph 81(1)(g.3)(i) of the Act, as enacted by subsection (1), is to be read as follows:

    • (i) the taxpayer is the trust established under

      • (A) the 1986-1990 Hepatitis C Settlement Agreement entered into by Her Majesty in right of Canada and Her Majesty in right of each of the provinces, or

      • (B) the Pre-1986/Post-1990 Hepatitis C Settlement Agreement entered into by Her Majesty in right of Canada, and

  • (4) Subsection (2) applies to the 2000 and subsequent taxation years.

  •  (1) Clause 82(1)(a)(ii)(B) of the Act, as it read immediately before its repeal by S.C. 2007, c. 2, s. 44(1), is replaced by the following:

    • (B) where the taxpayer is an individual, the total of all amounts each of which is, or is deemed by paragraph 260(12)(b) to have been, an amount paid by the taxpayer in the year and deemed by subsection 260(5.1) to have been received by another person as a taxable dividend,

  • (2) The portion of subsection 82(1) of the Act before paragraph (c) is replaced by the following:

    Marginal note:Taxable dividends received
    • 82. (1) In computing the income of a taxpayer for a taxation year, there shall be included the total of the following amounts:

      • (a) the amount, if any, by which

        • (i) the total of all amounts, other than eligible dividends and amounts described in paragraph (c), (d) or (e), received by the taxpayer in the taxation year from corporations resident in Canada as, on account of, in lieu of payment of or in satisfaction of, taxable dividends,

        exceeds

        • (ii) if the taxpayer is an individual, the total of all amounts each of which is, or is deemed by paragraph 260(12)(b) to have been, paid by the taxpayer in the taxation year and deemed by subsection 260(5.1) to have been received by another person as a taxable dividend (other than an eligible dividend);

      • (a.1) the amount, if any, by which

        • (i) the total of all amounts, other than amounts included in computing the income of the taxpayer because of paragraph (c), (d) or (e), received by the taxpayer in the taxation year from corporations resident in Canada as, on account of, in lieu of payment of or in satisfaction of, eligible dividends,

        exceeds

        • (ii) if the taxpayer is an individual, the total of all amounts each of which is, or is deemed by paragraph 260(12)(b) to have been, paid by the taxpayer in the taxation year and deemed by subsection 260(5.1) to have been received by another person as an eligible dividend;

      • (b) if the taxpayer is an individual, other than a trust that is a registered charity, the total of

        • (i) 25% of the amount determined under paragraph (a) in respect of the taxpayer for the taxation year, and

        • (ii) the product of the amount determined under paragraph (a.1) in respect of the taxpayer for the taxation year multiplied by

          • (A) for taxation years that end after 2005 and before 2010, 45%,

          • (B) for the 2010 taxation year, 44%,

          • (C) for the 2011 taxation year, 41%, and

          • (D) for taxation years that end after 2011, 38%;

  • (3) Subsection 82(1.1) of the Act is replaced by the following:

    • Marginal note:Limitation as to paragraph (1)(c)

      (1.1) An amount shall be included in the amounts described in paragraph (1)(c) in respect of a taxable dividend received at any time as part of a dividend rental arrangement only if that dividend was received on a share acquired before that time and after April, 1989.

  • (4) Subsection (1) applies

    • (a) to amounts paid in respect of arrangements made after 2001, except that, in its application to amounts paid in respect of an arrangement made before December 21, 2002, clause 82(1)(a)(ii)(B) of the Act, as enacted by subsection (1), is to be read without reference to the expression “or is deemed by paragraph 260(12)(b) to have been” unless an election referred to in paragraph 358(34)(b) has been made in respect of the arrangement; and

    • (b) to amounts paid in respect of arrangements made after November 2, 1998 and before 2002, if the parties to the arrangement have made the election referred to in paragraph 358(34)(b), except that in its application to those arrangements, the reference to “subsection 260(5.1)” in clause 82(1)(a)(ii)(B) of the Act, as enacted by subsection (1), is to be read as a reference to “subsection 260(5)”.

  • (5) Subsections (2) and (3) apply to amounts received or paid after 2005.

  •  (1) Subsection 84(4.1) of the Act is replaced by the following:

    • Marginal note:Deemed dividend on reduction of paid-up capital

      (4.1) Any amount paid by a public corporation on the reduction of the paid-up capital in respect of any class of shares of its capital stock, otherwise than by way of a redemption, acquisition or cancellation of any shares of that class or by way of a transaction described in subsection (2) or section 86, is deemed to have been paid by the corporation and received by the person to whom it was paid, as a dividend, unless

      • (a) the amount may reasonably be considered to be derived from proceeds of disposition realized by the public corporation, or by a person or partnership in which the public corporation had a direct or indirect interest at the time that the proceeds were realized, from a transaction that occurred

        • (i) outside the ordinary course of the business of the corporation, or of the person or partnership that realized the proceeds, and

        • (ii) within the period that commenced 24 months before the payment; and

      • (b) no amount that may reasonably be considered to be derived from those proceeds was paid by the public corporation on a previous reduction of the paid-up capital in respect of any class of shares of its capital stock.

  • (2) Subsection 84(7) of the Act is replaced by the following:

    • Marginal note:When dividend payable

      (7) A dividend that is deemed by this section or section 84.1, 128.1 or 212.1 to have been paid at a particular time is deemed, for the purposes of this subdivision and sections 131 and 133, to have become payable at that time.

  • (3) Subsection (1) applies to amounts paid after 1996, except that in respect of those amounts paid before February 27, 2004, subsection 84(4.1) of the Act, as enacted by subsection (1), is to be read as follows:

    • (4.1) Any amount paid by a public corporation on the reduction of the paid-up capital in respect of any class of shares of its capital stock, otherwise than by way of a redemption, acquisition or cancellation of any shares of that class or by way of a transaction described in subsection (2) or in section 86, is deemed to have been paid by the corporation and received by the person to whom it was paid, as a dividend, unless the amount may reasonably be considered to be derived from proceeds of disposition realized by the public corporation, or by a person or partnership in which the public corporation had a direct or indirect interest at the time that the proceeds were realized, from a transaction that occurred outside the ordinary course of the business of the public corporation, or of the person or partnership that realized the proceeds.

  • (4) Subsection (2) applies to dividends deemed to have been paid after February 23, 1998.

  •  (1) Paragraph 85(1)(d.1) of the Act is replaced by the following:

    • (d.1) for the purpose of determining after the disposition time the amount to be included under paragraph 14(1)(b) in computing the corporation’s income, there shall be added to the amount otherwise determined for C in that paragraph the amount determined by the formula

      1/2 × [(A × B/C) – 2(D – E)] + F + G

      where

      A 
      is the amount, if any, determined for Q in the definition “cumulative eligible capital” in subsection 14(5) in respect of the taxpayer’s business immediately before the disposition time,
      B 
      is the fair market value immediately before the disposition time of the eligible capital property disposed of to the corporation by the taxpayer,
      C 
      is the total of the fair market value immediately before the disposition time of all eligible capital property of the taxpayer in respect of the business and each amount that was described in B in respect of an earlier disposition made after the taxpayer’s adjustment time,
      D 
      is the amount, if any, that would be included under subsection 14(1) in computing the taxpayer’s income as a result of the disposition if the values determined for C and D in paragraph 14(1)(b) were zero,
      E 
      is the amount, if any, that would be included under subsection 14(1) in computing the taxpayer’s income as a result of the disposition if the value determined for D in paragraph 14(1)(b) were zero,
      F 
      is the total of all amounts, each of which is an amount determined under this paragraph as it applied to the taxpayer in respect of a disposition to the corporation on or before the disposition time, and
      G 
      is the total of all amounts, each of which is an amount determined under subparagraph 88(1)(c.1)(ii) as it applied to the taxpayer in respect of a winding-up before the disposition time;
  • (2) Subsection 85(1) of the Act is amended by adding the following after paragraph (d.1):

    • (d.11) for the purpose of determining after the time of the disposition (referred to in this paragraph and in paragraphs (d.1) and (d.12) as the “disposition time”) the amount to be included under paragraph 14(1)(a) or (b) in computing the corporation’s income, there shall be added to the amount otherwise determined for each of A and F in the definition “cumulative eligible capital” in subsection 14(5) the amount, if any, determined by the formula

      (A × B/C) + D + E

      where

      A 
      is the amount, if any, that would be determined for F in that definition in respect of the taxpayer’s business at the beginning of the taxpayer’s following taxation year if the taxpayer’s taxation year that includes the disposition time had ended immediately after the disposition time and if, in respect of the disposition, this Act were read without reference to paragraph (d.12),
      B 
      is the fair market value immediately before the disposition time of the eligible capital property disposed of to the corporation by the taxpayer,
      C 
      is the fair market value immediately before the disposition time of all eligible capital property of the taxpayer in respect of the business and each amount that was described in B in respect of an earlier disposition made after the taxpayer’s adjustment time,
      D 
      is the total of all amounts, each of which is an amount determined under this paragraph as it applied to the taxpayer in respect of a disposition to the corporation on or before the disposition time, and
      E 
      is the total of all amounts, each of which is an amount determined under subparagraph 88(1)(c.1)(i) as it applied to the taxpayer in respect of a winding-up before the disposition time;
    • (d.12) for the purpose of determining after the disposition time the amount to be included under paragraph 14(1)(a) or (b) in computing the taxpayer’s income, the amount, if any, determined by the formula in paragraph (d.11) in respect of the disposition is to be deducted from each of the amounts otherwise determined

      • (i) by subparagraph 14(1)(a)(ii), and

      • (ii) for the description of B in paragraph 14(1)(b);

  • (3) Subsection (1) applies to taxation years of a corporation that end after December 20, 2002.

  • (4) Subsection (2) applies in respect of the disposition of an eligible capital property by a taxpayer to a corporation unless

    • (a) the disposition by the taxpayer occurred before December 21, 2002; and

    • (b) the corporation disposed of the eligible capital property, before June 7, 2007 and in a taxation year of the corporation ending after February 27, 2000, to a person with whom the corporation was dealing at arm’s length at the time of that disposition by the corporation.

 
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