Economic Action Plan 2014 Act, No. 2 (S.C. 2014, c. 39)
Full Document:
Assented to 2014-12-16
27. (1) Paragraph 107.4(1)(j) of the Act is replaced by the following:
(j) if the contributor is an amateur athlete trust, a cemetery care trust, an employee life and health trust, an employee trust, a trust deemed by subsection 143(1) to exist in respect of a congregation that is a constituent part of a religious organization, a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)), a trust described in paragraph 149(1)(o.4) or a trust governed by an eligible funeral arrangement, an employees profit sharing plan, a registered disability savings plan, a registered education savings plan, a registered supplementary unemployment benefit plan or a TFSA, the particular trust is the same type of trust.
(2) Subsection (1) applies to the 2016 and subsequent taxation years.
28. (1) The definitions “qualified farm property”, “qualified fishing property” and “qualified small business corporation share” in subsection 108(1) of the Act are repealed.
(2) Paragraph (c) of the definition “trust” in subsection 108(1) of the Act is replaced by the following:
(c) a trust deemed by subsection 143(1) to exist in respect of a congregation that is a constituent part of a religious organization,
(3) The portion of paragraph 108(7)(b) of the Act before subparagraph (i) is replaced by the following:
(b) if all the beneficial interests in a particular trust acquired by way of the transfer, assignment or other disposition of property to the particular trust were acquired by
(4) Subsection (1) applies to dispositions that occur in the 2014 and subsequent taxation years.
(5) Subsections (2) and (3) apply to the 2016 and subsequent taxation years.
29. (1) The portion of paragraph 110.1(1)(a) of the Act before the formula is replaced by the following:
Marginal note:Charitable gifts
(a) the total of all amounts each of which is the eligible amount of a gift (other than a gift described in paragraph (c) or (d)) made by the corporation in the year or in any of the five preceding taxation years to a qualified donee, not exceeding the lesser of the corporation’s income for the year and the amount determined by the formula
(2) Paragraph 110.1(1)(b) of the Act is repealed.
(3) The portion of subparagraph 110.1(1)(d)(iii) of the Act before clause (A) is replaced by the following:
(iii) the gift was made by the corporation in the year or in any of the 10 preceding taxation years to a qualified donee that is
(4) Subsections (1) and (2) apply to the 2016 and subsequent taxation years.
(5) Subsection (3) applies to gifts made after February 10, 2014.
30. (1) The definitions “interest in a family farm partnership”, “interest in a family fishing partnership”, “qualified farm property”, “qualified fishing property”, “share of the capital stock of a family farm corporation” and “share of the capital stock of a family fishing corporation” in subsection 110.6(1) of the Act are repealed.
(2) Paragraph (b) of the description of A in the definition “annual gains limit” in subsection 110.6(1) of the Act is replaced by the following:
(b) the amount that would be determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and losses if the only properties referred to in that paragraph were properties that, at the time they were disposed of, were qualified farm properties, qualified fishing properties, qualified farm or fishing properties and qualified small business corporation shares, and
(3) Subsection 110.6(1) is amended by adding the following in alphabetical order:
“interest in a family farm or fishing partnership”
« participation dans une société de personnes agricole ou de pêche familiale »
“interest in a family farm or fishing partnership”, of an individual (other than a trust that is not a personal trust) at any time, means a partnership interest owned by the individual at that time if
(a) throughout any 24-month period ending before that time, more than 50% of the fair market value of the property of the partnership was attributable to
(i) property that was used principally in the course of carrying on a farming or fishing business in Canada in which the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C) was actively engaged on a regular and continuous basis, by
(A) the partnership,
(B) the individual,
(C) if the individual is a personal trust, a beneficiary of the trust,
(D) a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C),
(E) a corporation, a share of the capital stock of which was a share of the capital stock of a family farm or fishing corporation of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), or
(F) a partnership, a partnership interest in which was an interest in a family farm or fishing partnership of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C),
(ii) shares of the capital stock or indebtedness of one or more corporations of which all or substantially all of the fair market value of the property was attributable to properties described in subparagraph (iv),
(iii) a partnership interest in or indebtedness of one or more partnerships of which all or substantially all of the fair market value of the property was attributable to properties described in subparagraph (iv), or
(iv) properties described in any of subparagraphs (i) to (iii), and
(b) at that time, all or substantially all of the fair market value of the property of the partnership was attributable to property described in subparagraph (a)(iv);
“qualified farm or fishing property”
« bien agricole ou de pêche admissible »
“qualified farm or fishing property”, of an individual (other than a trust that is not a personal trust) at any time, means a property that is owned at that time by the individual, the spouse or common-law partner of the individual or a partnership, an interest in which is an interest in a family farm or fishing partnership of the individual or the individual’s spouse or common-law partner and that is
(a) real or immovable property or a fishing vessel that was used in the course of carrying on a farming or fishing business in Canada by,
(i) the individual,
(ii) if the individual is a personal trust, a beneficiary of the trust that is entitled to receive directly from the trust any income or capital of the trust,
(iii) a spouse, common-law partner, child or parent of an individual referred to in subparagraph (i) or (ii),
(iv) a corporation, a share of the capital stock of which is a share of the capital stock of a family farm or fishing corporation of an individual referred to in any of subparagraphs (i) to (iii), or
(v) a partnership, an interest in which is an interest in a family farm or fishing partnership of an individual referred to in any of subparagraphs (i) to (iii),
(b) a share of the capital stock of a family farm or fishing corporation of the individual or the individual’s spouse or common-law partner,
(c) an interest in a family farm or fishing partnership of the individual or the individual’s spouse or common-law partner, or
(d) an eligible capital property (which is deemed to include capital property to which paragraph 70(5.1)(b) or 73(3.1)(f) applies) used by a person or partnership referred to in any of subparagraphs (a)(i) to (v), or by a personal trust from which the individual acquired the property, in the course of carrying on a farming or fishing business in Canada;
“share of the capital stock of a family farm or fishing corporation”
« action du capital-actions d’une société agricole ou de pêche familiale »
“share of the capital stock of a family farm or fishing corporation”, of an individual (other than a trust that is not a personal trust) at any time, means a share of the capital stock of a corporation owned by the individual at that time if
(a) throughout any 24-month period ending before that time, more than 50% of the fair market value of the property owned by the corporation was attributable to
(i) property that was used principally in the course of carrying on a farming or fishing business in Canada in which the individual, a beneficiary referred to in clause (C) or a spouse or common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), was actively engaged on a regular and continuous basis, by
(A) the corporation,
(B) the individual,
(C) if the individual is a personal trust, a beneficiary of the trust,
(D) a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C),
(E) another corporation that is related to the corporation and of which a share of the capital stock was a share of the capital stock of a family farm or fishing corporation of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C), or
(F) a partnership, an interest in which was an interest in a family farm or fishing partnership of the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of such a beneficiary,
(ii) shares of the capital stock or indebtedness of one or more corporations of which all or substantially all of the fair market value of the property was attributable to property described in subparagraph (iv),
(iii) a partnership interest in or indebtedness of one or more partnerships of which all or substantially all of the fair market value of the property was attributable to properties described in subparagraph (iv), or
(iv) properties described in any of subparagraphs (i) to (iii), and
(b) at that time, all or substantially all of the fair market value of the property owned by the corporation was attributable to property described in subparagraph (a)(iv).
(4) Subsections 110.6(1.1) and (1.2) of the Act are replaced by the following:
Marginal note:Value of NISA
(1.1) For the purposes of the definitions “qualified small business corporation share” and “share of the capital stock of a family farm or fishing corporation” in subsection (1), the fair market value of a net income stabilization account is deemed to be nil.
(5) The portion of subsection 110.6(1.3) of the Act before paragraph (c) is replaced by the following:
Marginal note:Farming or fishing property — conditions
(1.3) For the purpose of applying the definition “qualified farm or fishing property”, in subsection (1), of an individual, at any time, a property owned at that time by the individual, the spouse or common-law partner of the individual, or a partnership, an interest in which is an interest in a family farm or fishing partnership of the individual or of the individual’s spouse or common-law partner, will not be considered to have been used in the course of carrying on a farming or fishing business in Canada, unless
(a) the following apply in respect of the property or property for which the property was substituted (in this paragraph referred to as “the property”),
(i) the property was owned throughout the period of at least 24 months immediately preceding that time by one or more of
(A) the individual, or a spouse, common-law partner, child or parent of the individual,
(B) a partnership, an interest in which is an interest in a family farm or fishing partnership of the individual or of the individual’s spouse or common-law partner,
(C) if the individual is a personal trust, the individual from whom the trust acquired the property or a spouse, common-law partner, child or parent of that individual, or
(D) a personal trust from which the individual or a child or parent of the individual acquired the property, and
(ii) either
(A) in at least two years while the property was owned by one or more persons or partnerships referred to in subparagraph (i),
(I) the gross revenue of a person (in this subclause referred to as the “operator”) referred to in subparagraph (i) from the farming or fishing business referred to in subclause (II) for the period during which the property was owned by a person or partnership described in subparagraph (i) exceeded the income of the operator from all other sources for that period, and
(II) the property was used principally in a farming or fishing business carried on in Canada in which an individual referred to in subparagraph (i), or where the individual is a personal trust, a beneficiary of the trust, was actively engaged on a regular and continuous basis, or
(B) throughout a period of at least 24 months while the property was owned by one or more persons or partnerships referred to in subparagraph (i), the property was used by a corporation referred to in subparagraph (a)(iv) of the definition “qualified farm or fishing property” in subsection (1) or by a partnership referred to in subparagraph (a)(v) of that definition in a farming or fishing business in which an individual referred to in any of subparagraphs (a)(i) to (iii) of that definition was actively engaged on a regular and continuous basis; or
(6) Paragraph 110.6(1.3)(c) of the Act is replaced by the following:
(c) if the property or property for which the property was substituted was last acquired by the individual or partnership before June 18, 1987 or after June 17, 1987 under an agreement in writing entered into before that date,
(i) in the year the property was disposed of by the individual, the property was used principally in the course of carrying on the business of farming in Canada by
(A) the individual, or a spouse, common-law partner, child or parent of the individual,
(B) a beneficiary referred to in subparagraph (a)(ii) of the definition “qualified farm or fishing property” in subsection (1) or a spouse, common-law partner, child or parent of that beneficiary,
(C) a corporation referred to in subparagraph (a)(iv) of the definition “qualified farm or fishing property” in subsection (1),
(D) a partnership referred to in subparagraph (a)(v) of the definition “qualified farm or fishing property” in subsection (1), or
(E) a personal trust from which the individual acquired the property, or
(ii) in at least five years during which the property was owned by a person described in any of clauses (A) to (E), the property was used principally in the course of carrying on the business of farming in Canada by
(A) the individual, or a spouse, common-law partner, child or parent of the individual,
(B) a beneficiary referred to in subparagraph (a)(ii) of the definition “qualified farm or fishing property” in subsection (1) or a spouse, common-law partner, child or parent of that beneficiary,
(C) a corporation referred to in subparagraph (a)(iv) of the definition “qualified farm or fishing property” in subsection (1),
(D) a partnership referred to in subparagraph (a)(v) of the definition “qualified farm or fishing property” in subsection (1), or
(E) a personal trust from which the individual acquired the property.
(7) The portion of subsection 110.6(2) of the Act before paragraph (a) is replaced by the following:
Marginal note:Capital gains deduction — qualified farm or fishing property
(2) In computing the taxable income for a taxation year of an individual (other than a trust) who was resident in Canada throughout the year and who disposed of qualified farm or fishing property in the year or a preceding taxation year (or who disposed of before 2014 property that was qualified farm property or qualified fishing property at the time of disposition), there may be deducted such amount as the individual may claim not exceeding the least of
(8) Paragraph 110.6(2)(d) of the Act is replaced by the following:
(d) the amount that would be determined in respect of the individual for the year under paragraph 3(b) in respect of capital gains and capital losses if the only properties referred to in that paragraph were properties that, at the time they were disposed of, were qualified farm properties, qualified fishing properties or qualified farm or fishing properties.
(9) Paragraph 110.6(2.1)(d) of the Act is replaced by the following:
(d) the amount that would be determined in respect of the individual for the year under paragraph 3(b) (to the extent that that amount is not included in computing the amount determined under paragraph (2)(d) in respect of the individual) in respect of capital gains and capital losses if the only properties referred to in paragraph 3(b) were qualified small business corporation shares of the individual.
(10) Subsections 110.6(2.2) to (4) of the Act are replaced by the following:
Marginal note:Maximum capital gains deduction
(4) Notwithstanding subsections (2) and (2.1), the total amount that may be deducted under this section in computing an individual’s income for a taxation year shall not exceed the amount determined by the formula in paragraph (2)(a) in respect of the individual for the year.
(11) The portion of subsection 110.6(5) of the Act before paragraph (a) is replaced by the following:
Marginal note:Deemed resident in Canada
(5) For the purposes of subsections (2) and (2.1), an individual is deemed to have been resident in Canada throughout a particular taxation year if
(12) The portion of subsection 110.6(6) of the Act before paragraph (a) is replaced by the following:
Marginal note:Failure to report capital gain
(6) Notwithstanding subsections (2) and (2.1), no amount may be deducted under this section in respect of a capital gain of an individual for a particular taxation year in computing the individual’s taxable income for the particular taxation year or any subsequent year, if
(13) The portion of subsection 110.6(7) of the Act before paragraph (a) is replaced by the following:
Marginal note:Deduction not permitted
(7) Notwithstanding subsections (2) and (2.1), no amount may be deducted under this section in computing an individual’s taxable income for a taxation year in respect of a capital gain of the individual for the taxation year if the capital gain is from a disposition of property which disposition is part of a series of transactions or events
(14) Subsection 110.6(8) of the Act is replaced by the following:
Marginal note:Deduction not permitted
(8) Notwithstanding subsections (2) and (2.1), if an individual has a capital gain for a taxation year from the disposition of a property and it can reasonably be concluded, having regard to all the circumstances, that a significant part of the capital gain is attributable to the fact that dividends were not paid on a share (other than a prescribed share) or that dividends paid on such a share in the taxation year or in any preceding taxation year were less than 90% of the average annual rate of return on that share for that year, no amount in respect of that capital gain shall be deducted under this section in computing the individual’s taxable income for the year.
(15) Paragraph 110.6(12)(b) of the Act is replaced by the following:
(b) the amount, if any, that would be determined in respect of the trust for that year under paragraph 3(b) in respect of capital gains and capital losses if the only properties referred to in that paragraph were properties that, at the time they were disposed of, were qualified farm or fishing properties, qualified small business corporation shares, qualified farm properties or qualified fishing properties, and
(16) Subsection 110.6(12) of the Act, as amended by subsection (15), is repealed.
(17) The portion of subsection 110.6(15) of the Act before paragraph (a) is replaced by the following:
Marginal note:Value of assets of corporations
(15) For the purposes of the definitions “qualified small business corporation share” and “share of the capital stock of a family farm or fishing corporation” in subsection (1), the definition “share of the capital stock of a family farm or fishing corporation” in subsection 70(10) and the definition “small business corporation” in subsection 248(1),
(18) The portion of subparagraph 110.6(15)(a)(ii) of the Act before clause (A) is replaced by the following:
(ii) the total fair market value of assets — other than assets described in any of subparagraphs (c)(i) to (iii) of the definition “qualified small business corporation share” in subsection (1), any of subparagraphs (a)(i) to (iii) of the definition “share of the capital stock of a family farm or fishing corporation” in subsection (1) or any of paragraphs (a) to (c) of the definition “small business corporation” in subsection 248(1), as the case may be — of any of those corporations that are
(19) The portion of paragraph 110.6(15)(b) of the Act after subparagraph (ii) is replaced by the following:
except that this paragraph applies only in determining whether a share of the capital stock of another corporation with which the particular corporation is connected is a qualified small business corporation share or a share of the capital stock of a family farm or fishing corporation and in determining whether the other corporation is a small business corporation.
(20) The portion of subsection 110.6(31) of the Act before the formula is replaced by the following:
Marginal note:Reserve limit
(31) If an amount is included in an individual’s income for a particular taxation year because of subparagraph 40(1)(a)(ii) in respect of a disposition of property in a preceding taxation year that, at the time of the disposition, is qualified farm or fishing property, a qualified small business corporation share, qualified farm property or qualified fishing property, the total of all amounts deductible by the individual for the particular year under this section is reduced by the amount, if any, determined by the formula
(21) Subsections (1) to (15) and (17) to (20) apply to dispositions and transfers that occur in the 2014 and subsequent taxation years.
(22) Subsection (16) applies to the 2016 and subsequent taxation years.
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