Economic Action Plan 2014 Act, No. 2 (S.C. 2014, c. 39)
Full Document:
Assented to 2014-12-16
35. (1) The description of B in section 118.62 of the Act is replaced by the following:
- B
- is the total of all amounts (other than any amount paid on account of or in satisfaction of a judgement) each of which is an amount of interest paid in the year (or in any of the five preceding taxation years that are after 1997, to the extent that it was not included in computing a deduction under this section for any other taxation year) by the individual or a person related to the individual on a loan made to, or other amount owing by, the individual under the Canada Student Loans Act, the Canada Student Financial Assistance Act, the Apprentice Loans Act or a law of a province governing the granting of financial assistance to students at the post-secondary school level.
(2) Subsection (1) comes into force, or is deemed to have come into force, on the day on which Division 30 of Part 6 of the Economic Action Plan 2014 Act, No. 1 comes into force.
36. (1) Section 118.92 of the Act is replaced by the following:
Marginal note:Ordering of credits
118.92 In computing an individual’s tax payable under this Part, the following provisions shall be applied in the following order: subsections 118(1) and (2), section 118.7, subsections 118(3) and (10) and sections 118.01, 118.02, 118.031, 118.04, 118.05, 118.06, 118.07, 118.3, 118.61, 118.5, 118.6, 118.9, 118.8, 118.2, 118.1, 118.62 and 121.
(2) Subsection (1) applies to the 2015 and subsequent taxation years.
37. (1) Subparagraph (b)(ii) of the definition “split income” in subsection 120.4(1) of the Act is replaced by the following:
(ii) can reasonably be considered to be income derived
(A) from the provision of property or services by a partnership or trust to, or in support of, a business carried on by
(I) a person who is related to the individual at any time in the year,
(II) a corporation of which a person who is related to the individual is a specified shareholder at any time in the year, or
(III) a professional corporation of which a person related to the individual is a shareholder at any time in the year, or
(B) from a business of, or the rental of property by, a particular partnership or trust, if a person who is related to the individual at any time in the year
(I) is actively engaged on a regular basis in the activities of the particular partnership or trust related to earning income from a business or the rental of property, or
(II) in the case of a particular partnership, has an interest in the particular partnership directly or indirectly through one or more other partnerships, or
(2) The portion of paragraph (c) of the definition “split income” in subsection 120.4(1) of the Act before subparagraph (i) is replaced by the following:
(c) a portion of an amount included because of the application of subsection 104(13) or 105(2) in respect of a trust (other than a mutual fund trust or a trust that is deemed to be in existence by subsection 143(1)) in computing the individual’s income for the year, to the extent that the portion
(3) Subparagraph (c)(ii) of the definition “split income” in subsection 120.4(1) of the Act is amended by striking out “or” at the end of clause (B), by adding “or” at the end of clause (C) and by adding the following after clause (C):
(D) to be income derived from a business of, or the rental of property by, a particular partnership or trust, if a person who is related to the individual at any time in the year is actively engaged on a regular basis in the activities of the particular partnership or trust related to earning income from a business or the rental of property.
(4) Subsections (1) to (3) apply to the 2014 and subsequent taxation years.
38. (1) The portion of subsection 122(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Tax payable by trust
122. (1) Notwithstanding section 117, the tax payable under this Part for a taxation year by a trust (other than a graduated rate estate or qualified disability trust) is the total of
(2) Subsection 122(1) of the Act is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):
(c) if subsection (2) applies to the trust for the taxation year, the amount determined by the formula
A – B
where
- A
- is the amount that would be determined for B for the year if
(i) the rate of tax payable under this Part by the trust for each taxation year referred to in the description of B were 29%, and
(ii) the trust’s taxable income for a particular taxation year referred to in the description of B were reduced by the total of
(A) the amount, if any, that was paid or distributed in satisfaction of all or part of an individual’s interest as a beneficiary under the trust if
(I) the individual was an electing beneficiary of the trust for the particular year,
(II) the payment or distribution can reasonably be considered to be made out of that taxable income, and
(III) the payment or distribution was made in a taxation year referred to in the description of B,
(B) the amount that is the portion of the tax payable under this Part by the trust for the particular year that can reasonably be considered to relate to the amount determined under clause (A), and
(C) the amount that is the portion of the tax payable, under the law of the province in which the trust is resident for the particular year, that can reasonably be considered to relate to the amount determined under clause (A), and
- B
- is the total of all amounts each of which is the amount of tax payable under this Part by the trust for a taxation year that precedes the year if that preceding taxation year is
(i) the later of
(A) the first taxation year for which the trust was a qualified disability trust, and
(B) the last taxation year, if any, for which subsection (2) applied to the trust, or
(ii) a taxation year that ends after the taxation year described in subparagraph (i).
(3) Subsections 122(1.1) and (2) of the Act are replaced by the following:
Marginal note:Credits available to trusts
(1.1) No deduction may be made under this subdivision (other than section 118.1, 120.2 or 121) in computing the tax payable by a trust for a taxation year.
Marginal note:Qualified disability trust — application of (1)(c)
(2) This subsection applies to a trust for a particular taxation year if the trust was a qualified disability trust for a preceding taxation year and
(a) none of the beneficiaries under the trust at the end of the particular year was an electing beneficiary of the trust for a preceding year;
(b) the particular year ended immediately before the trust ceased to be resident in Canada; or
(c) an amount is paid or distributed in the particular year to a beneficiary under the trust in satisfaction of all or part of the beneficiary’s interest in the trust unless
(i) the beneficiary is an electing beneficiary of the trust for the particular year or a preceding year,
(ii) the amount is deducted under paragraph 104(6)(b) in computing the trust’s income for the particular year, or
(iii) the amount is paid or distributed in satisfaction of a right to enforce payment of an amount that was deducted under paragraph 104(6)(b) in computing the trust’s income for a preceding year.
(4) Subsection 122(3) of the Act is amended by adding the following in alphabetical order:
“beneficiary”
« bénéficiaire »
“beneficiary”, under a trust, includes a person beneficially interested in the trust.
“electing beneficiary”
« bénéficiaire optant »
“electing beneficiary”, for a taxation year of a qualified disability trust, means a beneficiary under the trust that for the year
(a) makes an election described in clause (a)(iii)(A) of the definition “qualified disability trust” in this subsection; and
(b) is described in paragraph (b) of that definition.
“qualified disability trust”
« fiducie admissible pour personne handicapée »
“qualified disability trust”, for a taxation year (in this definition referred to as the “trust year”), means a trust, if
(a) the trust
(i) is, at the end of the trust year, a testamentary trust that arose on and as a consequence of a particular individual’s death,
(ii) is resident in Canada for the trust year, and
(iii) includes in its return of income under this Part for the trust year
(A) an election, made jointly with one or more beneficiaries under the trust in prescribed form, to be a qualified disability trust for the trust year, and
(B) the Social Insurance Number of each of those beneficiaries;
(b) each of those beneficiaries is an individual, named as a beneficiary by the particular individual in the instrument under which the trust was created,
(i) in respect of whom paragraphs 118.3(1)(a) to (b) apply for the individual’s taxation year (in this definition referred to as the “beneficiary year”) in which the trust year ends, and
(ii) who does not jointly elect with any other trust, for a taxation year of the other trust that ends in the beneficiary year, to be a qualified disability trust; and
(c) subsection (2) does not apply to the trust for the trust year.
(5) Subsections (1) to (4) apply to the 2016 and subsequent taxation years.
- Date modified: