Economic Action Plan 2014 Act, No. 2 (S.C. 2014, c. 39)
Full Document:
Assented to 2014-12-16
31. (1) The portion of subparagraph 112(3.2)(a)(iii) of the Act before clause (A) is replaced by the following:
(iii) if the trust is an individual’s graduated rate estate, the share was acquired as a consequence of the individual’s death and the disposition occurs during the trust’s first taxation year, 1/2 of the lesser of
(2) Subsection (1) applies to the 2016 and subsequent taxation years.
32. (1) The portion of the description of B in subsection 118.03(2) of the Act before the formula is replaced by the following:
- B
- is the total of all amounts each of which is, in respect of a qualifying child of the individual for the taxation year, the lesser of $1,000 and the amount determined by the formula
(2) Section 118.03 of the Act is repealed.
(3) Subsection (1) applies to the 2014 taxation year.
(4) Subsection (2) applies to the 2015 and subsequent taxation years.
33. (1) The definition “qualifying child” in subsection 118.031(1) of the Act is replaced by the following:
“qualifying child”
« enfant admissible »
“qualifying child” of an individual has the meaning assigned by subsection 122.8(1).
(2) Subsection (1) applies to the 2015 and subsequent taxation years.
34. (1) The definition “total Crown gifts” in subsection 118.1(1) of the Act is repealed.
(2) The definition “total charitable gifts” in subsection 118.1(1) of the Act is replaced by the following:
“total charitable gifts”
« total des dons de bienfaisance »
“total charitable gifts”, of an individual for a particular taxation year, means the total of all amounts each of which is the eligible amount — to the extent it is not otherwise included in determining an amount that is deducted under this section in computing any individual’s tax payable under this Part for any taxation year — of a gift (other than a gift any part of the eligible amount of which is included in the total cultural gifts or the total ecological gifts of any individual for any taxation year) that is made
(a) to a qualified donee,
(b) in a taxation year that is not a year for which an amount is deducted under subsection 110(2) in computing the individual’s taxable income, and
(c) if the individual is
(i) not a trust,
(A) by the individual, or the individual’s spouse or common-law partner, in the particular year or any of the five preceding taxation years,
(B) by the individual in the year in which the individual dies if the particular year is the taxation year that precedes the taxation year in which the individual dies, or
(C) by the individual’s graduated rate estate if subsection (5.1) applies to the gift and the particular year is the taxation year in which the individual dies or the preceding taxation year, or
(ii) a trust
(A) by the trust in the particular year or any of the five preceding taxation years, or
(B) by the trust if the trust is a graduated rate estate, subsection (5.1) applies to the gift and the particular year is the taxation year in which the gift is made or a preceding taxation year of the estate;
(3) The portion of the definition “total cultural gifts” in subsection 118.1(1) of the Act before paragraph (a) is replaced by the following:
“total cultural gifts”
« total des dons de biens culturels »
“total cultural gifts”, of an individual for a particular taxation year, means the total of all amounts each of which is the eligible amount — to the extent it is not otherwise included in determining an amount that is deducted under this section in computing any individual’s tax payable under this Part for any taxation year — of a gift
(4) The definition “total cultural gifts” in subsection 118.1(1) of the Act is amended by striking out “and” at the end of paragraph (a) and by replacing the portion after that paragraph with the following:
(b) that is made to an institution or a public authority in Canada that is, at the time the gift is made, designated under subsection 32(2) of the Cultural Property Export and Import Act either generally or for a specified purpose related to that object, and
(c) that is made
(i) if the individual is not a trust,
(A) by the individual, or the individual’s spouse or common-law partner, in the particular year or any of the five preceding taxation years,
(B) by the individual in the year in which the individual dies if the particular year is the taxation year that precedes the taxation year in which the individual dies, or
(C) by the individual’s graduated rate estate if subsection (5.1) applies to the gift and the particular year is the taxation year in which the individual dies or the preceding taxation year, or
(ii) if the individual is a trust,
(A) by the trust in the particular year or any of the five preceding taxation years, or
(B) by the trust if the trust is a graduated rate estate, subsection (5.1) applies to the gift and the particular year is the taxation year in which the gift is made or a preceding taxation year of the estate;
(5) The portion of paragraph (c) of the definition “total ecological gifts” in subsection 118.1(1) of the Act before subparagraph (i) is replaced by the following:
(c) the gift was made by the individual in the year or in any of the 10 preceding taxation years to a qualified donee that is
(6) The definition “total ecological gifts” in subsection 118.1(1) of the Act, as amended by subsection (5), is replaced by the following:
“total ecological gifts”
« total des dons de biens écosensibles »
“total ecological gifts”, of an individual for a particular taxation year, means the total of all amounts each of which is the eligible amount — to the extent it is not otherwise included in determining an amount that is deducted under this section in computing any individual’s tax payable under this Part for any taxation year — of a gift (other than a gift any part of the eligible amount of which is included in the total cultural gifts of any individual for any taxation year)
(a) of land (including a covenant or an easement to which land is subject or, in the case of land in the Province of Quebec, a real servitude)
(i) the fair market value of which is certified by the Minister of the Environment, and
(ii) that is certified by that Minister, or by a person designated by that Minister, to be ecologically sensitive land, the conservation and protection of which is, in the opinion of that Minister or the designated person, important to the preservation of Canada’s environmental heritage,
(b) that is made to a qualified donee that is
(i) Her Majesty in right of Canada or of a province, a municipality in Canada or a municipal or public body performing a function of government in Canada, or
(ii) a registered charity one of the main purposes of which is, in the opinion of that Minister, the conservation and protection of Canada’s environmental heritage, and that is approved by that Minister or the designated person in respect of the gift, and
(c) that is made
(i) if the individual is not a trust,
(A) by the individual, or the individual’s spouse or common-law partner, in the particular year or any of the five preceding taxation years,
(B) by the individual in the year in which the individual dies if the particular year is the taxation year that precedes the taxation year in which the individual dies, or
(C) by the individual’s graduated rate estate if subsection (5.1) applies to the gift and the particular year is the taxation year in which the individual dies or the preceding taxation year, or
(ii) if the individual is a trust,
(A) by the trust in the particular year or any of the 10 preceding taxation years, or
(B) by the trust if the trust is a graduated rate estate, subsection (5.1) applies to the gift and the particular year is the taxation year in which the gift is made or a preceding taxation year of the estate;
(7) Paragraph (b) of the definition “total gifts” in subsection 118.1(1) of the Act is repealed.
(8) The portion of subsection 118.1(2) of the Act before paragraph (a) is replaced by the following:
Marginal note:Proof of gift
(2) An eligible amount of a gift is not to be included in the total charitable gifts, total cultural gifts or total ecological gifts of an individual unless the making of the gift is evidenced by filing with the Minister
(9) Subsection 118.1(2.1) of the Act is replaced by the following:
Marginal note:Ordering of gifts
(2.1) For the purpose of determining an individual’s total charitable gifts, total cultural gifts and total ecological gifts for a taxation year, no amount in respect of a gift described in any of the definitions of those expressions and made in a particular taxation year is to be considered to have been included in determining an amount that was deducted under this section in computing the individual’s tax payable under this Part for a taxation year until amounts in respect of such gifts made in taxation years preceding the particular year that can be so considered are so considered.
(10) Subsections 118.1(4) to (5.3) are replaced by the following:
Marginal note:Gifts — deaths before 2016
(4) If an individual dies before 2016 and any of this subsection and subsections (5), (5.2), (5.3), (7) and (7.1) (as they read for the taxation year in which the death occurred) applied to deem the individual to have made a gift at a time before the death, then for the purposes of this section the gift is deemed not to have been made by any other taxpayer or at any other time.
Marginal note:Gifts — deaths after 2015
(4.1) Subsection (5) applies to a gift if an estate arises on and as a consequence of the death after 2015 of an individual and the gift is
(a) made by the individual by the individual’s will;
(b) deemed by subsection (5.2) to have been made in respect of the death; or
(c) made by the estate.
Marginal note:Gifts — deaths after 2015
(5) If this subsection applies to a gift, then for the purposes of the Act (other than subsections (4.1) and (5.2)) the gift is deemed to be made
(a) by the estate referred to in subsection (4.1) and not by any other taxpayer; and
(b) subject to subsection (13), at the time that the property that is the subject of the gift is transferred to the donee and not at any other time.
Marginal note:Gifts by graduated rate estate
(5.1) This subsection applies to a gift made by the graduated rate estate of an individual if the individual’s death occurs after 2015 and either
(a) the gift is deemed by subsection (5.2) to have been made in respect of the death, or
(b) the subject of the gift is property that was acquired by the estate on and as a consequence of the death or is property that was substituted for that property.
Marginal note:Deemed gifts — eligible transfers
(5.2) For the purposes of this section, money or a negotiable instrument transferred to a qualified donee is deemed to be property that is the subject of a gift, in respect of an individual’s death, made to the qualified donee, if the death occurs after 2015 and the transfer is
(a) a transfer — other than a transfer the amount of which is not included in computing the income of the individual or the individual’s estate for any taxation year but would have been included in computing the income of the individual or the estate for a taxation year if the transfer had been made to the individual’s legal representative for the estate’s benefit and this Act were read without reference to subsection 70(3) — made
(i) as a consequence of the death,
(ii) solely because of the obligations under a life insurance policy under which, immediately before the death, the individual’s life was insured, and the individual’s consent would have been required to change the recipient of the transfer, and
(iii) from an insurer to a person that is the qualified donee and that was, immediately before the death, neither a policyholder under the policy nor an assignee of the individual’s interest under the policy; or
(b) a transfer made
(i) as a consequence of the death,
(ii) solely because of the qualified donee’s interest or, for civil law a right, as a beneficiary under an arrangement (other than an arrangement of which a licensed annuities provider is the issuer or carrier)
(A) that is a registered retirement savings plan or registered retirement income fund or that was, immediately before the death, a TFSA, and
(B) under which the individual was, immediately before the death, the annuitant or holder, and
(iii) from the arrangement to the qualified donee.
(11) Subparagraphs 118.1(5.4)(a)(i) and (ii) of the Act are replaced by the following:
(i) makes a gift at any time of capital property to a qualified donee, or
(ii) who is non-resident, makes a gift at any time of real or immovable property situated in Canada to a prescribed donee who provides an undertaking, in a form satisfactory to the Minister, to the effect that the property will be held for use in the public interest; and
(12) Subsections 118.1(7) and (7.1) of the Act are replaced by the following:
Marginal note:Gift of art
(7) Subsection (7.1) applies to a gift made by an individual if the gift is described in the definition “total charitable gifts” or “total cultural gifts” in subsection (1) and the property that is the subject of the gift is a work of art that
(a) was created by the individual and is in the individual’s inventory;
(b) was acquired by the individual under circumstances where subsection 70(3) applies; or
(c) if the individual is an estate that arose on and as a consequence of the death of a particular individual who created the work of art, was in the particular individual’s inventory immediately before the death.
Marginal note:Gift of art
(7.1) If this subsection applies to a gift made by an individual, the following rules apply:
(a) in the case of a gift described in the definition “total cultural gifts” in subsection (1),
(i) if at the time the gift is made the fair market value of the work of art that is the subject of the gift exceeds its cost amount to the individual, the individual is deemed to receive at that time proceeds of disposition in respect of the work of art equal to the greater of its cost amount to the individual at that time and the amount of the advantage, if any, in respect of the gift, and
(ii) if the individual is the graduated rate estate of a particular individual who created the work of art that is the subject of the gift and at the time immediately before the particular individual’s death the fair market value of the work of art exceeds its cost amount to the particular individual, the particular individual is deemed to receive at that time proceeds of disposition in respect of the work of art equal to the cost amount to the particular individual at that time and the estate is deemed to have acquired the work of art at a cost equal to those proceeds; and
(b) in the case of a gift described in the definition “total charitable gifts” in subsection (1),
(i) if at the time the gift is made the fair market value of the work of art that is the subject of the gift exceeds its cost amount to the individual, then the amount designated in the individual’s return of income under section 150 for the taxation year that includes that time is deemed to be
(A) the individual’s proceeds of disposition in respect of the work of art, and
(B) the fair market value of the work of art for the purposes of subsection 248(31),
(ii) a designation under subparagraph (i) is of no effect to the extent that the amount designated
(A) exceeds the fair market value of the work of art otherwise determined, or
(B) is less than the greater of the amount of the advantage, if any, in respect of the gift, and the cost amount to the individual of the work of art,
(iii) if the individual is the graduated rate estate of a particular individual who created the work of art that is the subject of the gift and at the time immediately before the particular individual’s death the fair market value of the work of art exceeds its cost amount to the particular individual,
(A) the amount designated in the particular individual’s return of income under section 150 for the taxation year that includes that time is deemed to be the value of the work of art at the time of the death, and
(B) the estate is deemed to have acquired the work of art at a cost equal to that value, and
(iv) a designation under subparagraph (iii) is of no effect to the extent that the amount designated
(A) exceeds the fair market value of the work of art otherwise determined, or
(B) is less than the cost amount to the particular individual of the work of art.
(13) Subsection 118.1(10.1) of the Act is replaced by the following:
Marginal note:Determination of fair market value
(10.1) For the purposes of this section, subparagraph 69(1)(b)(ii), subsection 70(5) and sections 110.1 and 207.31, if at any time the Canadian Cultural Property Export Review Board or the Minister of the Environment determines or redetermines an amount to be the fair market value of a property that is the subject of a gift described in paragraph 110.1(1)(a), or in the definition “total charitable gifts” in subsection (1), made by a taxpayer within the two-year period that begins at that time, an amount equal to the last amount so determined or redetermined within the period is deemed to be the fair market value of the gift at the time the gift was made and, subject to subsections (6), (7.1) and 110.1(3), to be the taxpayer’s proceeds of disposition of the gift.
(14) The portion of subsection 118.1(13) of the Act before paragraph (a) is replaced by the following:
Marginal note:Non-qualifying securities
(13) For the purposes of this section (other than this subsection), if at any particular time an individual makes a gift (including a gift that, but for this subsection, would be deemed by subsection (5) to be made at the particular time) of a non-qualifying security of the individual and the gift is not an excepted gift,
(15) Paragraphs 118.1(13)(b) and (c) of the Act are replaced by the following:
(b) if the security ceases to be a non-qualifying security of the individual at a subsequent time that is within 60 months after the particular time and the donee has not disposed of the security at or before the subsequent time, the individual is deemed to have made a gift to the donee of property at the subsequent time and the fair market value of that property is deemed to be the lesser of the fair market value of the security at the subsequent time and the fair market value of the security at the particular time that would, if this Act were read without reference to this subsection, have been included in calculating the individual’s total charitable gifts for a taxation year;
(c) if the security is disposed of by the donee within 60 months after the particular time and paragraph (b) does not apply to the security, the individual is deemed to have made a gift to the donee of property at the time of the disposition and the fair market value of that property is deemed to be the lesser of the fair market value of any consideration (other than a non-qualifying security of any person) received by the donee for the disposition and the fair market value of the security at the particular time that would, if this Act were read without reference to this subsection, have been included in calculating the individual’s total charitable gifts for a taxation year; and
(16) Subsection 118.1(21) of the Act is replaced by the following:
Marginal note:Options
(21) Subject to subsections (23) and (24), if an individual has granted an option to a qualified donee in a taxation year, no amount in respect of the option is to be included in computing the total charitable gifts, total cultural gifts or total ecological gifts in respect of any taxpayer for any taxation year.
(17) Subsections (1) to (4) and (6) to (16) apply to the 2016 and subsequent taxation years.
(18) Subsection (5) applies to gifts made after February 10, 2014.
- Date modified: