Economic Action Plan 2013 Act, No. 2 (S.C. 2013, c. 40)
Full Document:
Assented to 2013-12-12
19. (1) Subparagraph 40(2)(a)(iii) of the English version of the Act is replaced by the following:
(iii) the purchaser of the property sold is a partnership in which the taxpayer was, immediately after the sale, a majority-interest partner;
(2) Subparagraph 40(3.4)(b)(iii) of the Act is replaced by the following:
(iii) that is immediately before the transferor is subject to a loss restriction event,
(3) Subsections 40(10) and (11) of the Act are replaced by the following:
Marginal note:Application of subsection (11)
(10) Subsection (11) applies in computing at any particular time a taxpayer’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 taxpayer, 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 taxpayer 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 taxpayer 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 taxpayer 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 taxpayer 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, (as defined in 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 taxpayer 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, (as defined in subsection 80(1)) in respect of the foreign currency debt at the particular time.
(4) Subsections (2) and (3) are deemed to have come into force on March 21, 2013.
20. Paragraph 44(7)(c) of the English version of the Act is replaced by the following:
(c) the former property of the taxpayer was disposed of to a partnership in which the taxpayer was, immediately after the disposition, a majority-interest partner.
21. (1) Subparagraph 50(1)(b)(i) of the Act is replaced by the following:
(i) the corporation has during the year become a bankrupt,
(2) Subsection (1) is deemed to have come into force on December 21, 2012.
22. (1) Clause 53(1)(e)(i)(A) of the Act is replaced by the following:
(A) paragraphs 38(a.1) to (a.3) and the fractions set out in the formula in paragraph 14(1)(b) and in subsection 14(5), paragraph 38(a) and subsection 41(1),
(2) The portion of paragraph 53(1)(r) of the Act before the formula is replaced by the following:
(r) if the time is before 2005, the property is an interest in, or a share of the capital stock of, a flow-through entity described in any of paragraphs (a) to (f) and (h) of the definition “flow-through entity” in subsection 39.1(1) and immediately after that time the taxpayer disposed of all their interests in, and shares of the capital stock of, the entity, the amount determined by the formula
(3) Subsection 53(1) of the Act is amended by striking out “and” at the end of paragraph (q) and by adding the following after paragraph (r):
(s) if the property was acquired under a derivative forward agreement, any amount required to be included in respect of the property under subparagraph 12(1)(z.7)(i) in computing the income of the taxpayer for a taxation year; and
(t) if the property is disposed of under a derivative forward agreement, any amount required to be included in respect of the property under subparagraph 12(1)(z.7)(ii) in computing the income of the taxpayer for the taxation year that includes that time.
(4) Section 53 of the Act is amended by adding the following after subsection (1.1):
Marginal note:Flow-through entity before 2005
(1.2) For the purposes of paragraph (1)(r), if the fair market value of all of a taxpayer’s interests in, and shares of the capital stock of, a flow-through entity is nil when the taxpayer disposes of those interests and shares, the fair market value of each such interest or share at that time is deemed to be $1.
(5) Paragraph 53(2)(b.2) of the Act is replaced by the following:
(b.2) if the property is property of a taxpayer that was subject to a loss restriction event at or before that time, any amount required by paragraph 111(4)(c) to be deducted in computing the adjusted cost base of the property;
(6) Subsection 53(2) of the Act is amended by striking out “and” at the end of paragraph (u) and by adding the following after paragraph (v):
(w) if the property was acquired under a derivative forward agreement, any amount deductible in respect of the property under paragraph 20(1)(xx) in computing the income of the taxpayer for a taxation year; and
(x) if the property is disposed of under a derivative forward agreement, any amount deductible in respect of the property under paragraph 20(1)(xx) in computing the income of the taxpayer for the taxation year that includes that time.
(7) Subsection (1) applies in respect of gifts made after February 25, 2008.
(8) Subsections (2) and (4) apply to dispositions that occur after 2001.
(9) Subsections (3), (5) and (6) are deemed to have come into force on March 21, 2013.
23. (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 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(3)(a) or (c), 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) Paragraph (f) of the definition “superficial loss” in section 54 of the Act is replaced by the following:
(f) a disposition by a taxpayer that was subject to a loss restriction event within 30 days after the disposition,
(3) Subsection (1) applies to taxation years that begin after March 20, 2013.
(4) Subsection (2) is deemed to have come into force on March 21, 2013.
24. (1) Clause 55(3)(a)(iii)(B) of the Act is replaced by the following:
(B) property (other than shares of the capital stock of the dividend recipient) more than 10% of the fair market value of which was, at any time during the series, derived from any combination of shares of the capital stock and debt of the dividend payer,
(2) Clause 55(3)(a)(iv)(B) of the Act is replaced by the following:
(B) property more than 10% of the fair market value of which was, at any time during the series, derived from any combination of shares of the capital stock and debt of the dividend recipient, and
(3) Subsection 55(3.01) of the Act is amended by striking out “and” at the end of paragraph (d) and by adding the following after paragraph (e):
(f) a significant increase in the total direct interest in a corporation that would, but for this paragraph, be described in subparagraph (3)(a)(ii) is deemed not to be described in that subparagraph if the increase was the result of the issuance of shares of the capital stock of the corporation solely for money and the shares were redeemed, acquired or cancelled by the corporation before the dividend was received;
(g) a disposition of property that would, but for this paragraph, be described in subparagraph (3)(a)(i), or a significant increase in the total direct interest in a corporation that would, but for this paragraph, be described in subparagraph (3)(a)(ii), is deemed not to be described in those subparagraphs if
(i) the dividend payer was related to the dividend recipient immediately before the dividend was received,
(ii) the dividend payer did not, as part of the series of transactions or events that includes the receipt of the dividend, cease to be related to the dividend recipient,
(iii) the disposition or increase occurred before the dividend was received,
(iv) the disposition or increase was the result of the disposition of shares to, or the acquisition of shares of, a particular corporation, and
(v) at the time the dividend was received, all the shares of the capital stock of the dividend recipient and the dividend payer were owned by the particular corporation, a corporation that controlled the particular corporation, a corporation controlled by the particular corporation or any combination of those corporations; and
(h) a winding-up of a subsidiary wholly-owned corporation to which subsection 88(1) applies, or an amalgamation to which subsection 87(11) applies of a corporation with one or more subsidiary wholly-owned corporations, is deemed not to result in a significant increase in the total direct interest, or in the total of all direct interests, in the subsidiary or subsidiaries, as the case may be.
(4) The portion of paragraph 55(3.1)(a) of the Act before subparagraph (i) is replaced by the following:
(a) in contemplation of and before a distribution (other than a distribution by a specified corporation) made in the course of the reorganization in which the dividend was received, property became property of the distributing corporation, a corporation controlled by it or a predecessor corporation of any such corporation otherwise than as a result of
(5) Clause 55(3.1)(c)(i)(A) of the Act is replaced by the following:
(A) as a result of a disposition
(I) in the ordinary course of business, or
(II) before the distribution for consideration that consists solely of money or indebtedness that is not convertible into other property, or of any combination of the two,
(6) Clause 55(3.1)(d)(i)(A) of the Act is replaced by the following:
(A) as a result of a disposition
(I) in the ordinary course of business, or
(II) before the distribution for consideration that consists solely of money or indebtedness that is not convertible into other property, or of any combination of the two,
(7) Subsections (1) and (2) apply in respect of dividends received after December 20, 2012.
(8) Subsections (3) to (6) apply in respect of dividends received after 2003.
- Date modified: