Budget Implementation Act, 2016, No. 2 (S.C. 2016, c. 12)
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Assented to 2016-12-15
PART 1Amendments to the Income Tax Act and to Related Legislation (continued)
R.S., c. 2 (5th Supp.)Income Tax Application Rules
72 (1) The portion of subsection 20(1) of the Income Tax Application Rules before paragraph (a) is replaced by the following:
Marginal note:Depreciable property
20 (1) If the capital cost to a taxpayer of any depreciable property (other than a property that was, at any time, eligible capital property as defined in the amended Act at that time) acquired by the taxpayer before 1972 and owned by the taxpayer without interruption from December 31, 1971 until such time after 1971 as the taxpayer disposed of it is less than the fair market value of the property on valuation day and less than the proceeds of disposition thereof otherwise determined,
(2) Subsections 20(1.3) to (2) of the Rules are replaced by the following:
Marginal note:Transfers before 1972 not at arm’s length
(1.3) Without restricting the generality of section 18, if any depreciable property (other than a property that was, at any time, eligible capital property as defined in the amended Act at that time) has been transferred before 1972 in circumstances such that subsection 20(4) of the former Act would, if that provision applied to transfers of property made in the 1972 taxation year, apply, paragraph 69(1)(b) of the amended Act does not apply to the transfer and subsection 20(4) of the former Act applies thereto.
Marginal note:Depreciable property received as dividend in kind
(1.4) The capital cost to a taxpayer, as of any particular time after 1971, of any depreciable property (other than depreciable property referred to in subsection (1.3) or deemed by subparagraph (1)(b)(ii) to have been acquired by the taxpayer before 1972 or a property that was, at any time, eligible capital property as defined in the amended Act at that time) acquired by the taxpayer before 1972 as, on account of, in lieu of payment of or in satisfaction of, a dividend payable in kind (other than a stock dividend) in respect of a share owned by the taxpayer of the capital stock of a corporation, is deemed to be the fair market value of that property at the time the property was so received.
Marginal note:Recapture of capital cost allowances
(2) In determining a taxpayer’s income for a taxation year from farming or fishing, subsection 13(1) of the amended Act does not apply in respect of the disposition by the taxpayer of property (other than a property that was, at any time, eligible capital property as defined in the amended Act at that time) acquired by the taxpayer before 1972 unless the taxpayer has elected to make a deduction for that or a preceding taxation year, in respect of the capital cost of property acquired by the taxpayer before 1972, under regulations made under paragraph 20(1)(a) of that Act other than a regulation providing solely for an allowance for computing income from farming or fishing.
(3) Subsections (1) and (2) come into force or are deemed to have come into force on January 1, 2017.
73 (1) Subsection 21(1) of the Rules is replaced by the following:
Marginal note:Government right
21(1) If as a result of a disposition occurring after 1971 a taxpayer has or may become entitled to receive an amount (in this section referred to as the actual amount) that may reasonably be considered to be consideration received by the taxpayer for the disposition of, or for allowing the expiration of, a government right, in respect of a business carried on by the taxpayer throughout the period beginning January 1, 1972 and ending immediately after the disposition occurred, for the purposes of the amended Act the amount that the taxpayer has or may become entitled to receive is deemed to be the amount, if any, by which the actual amount exceeds the greater of
(a) the total of all amounts each of which is an outlay or expenditure made or incurred by the taxpayer as a result of a transaction that occurred before 1972 for the purpose of acquiring the government right, or the taxpayer’s original right in respect of the government right, to the extent that the outlay or expenditure was not otherwise deducted in computing the income of the taxpayer for any taxation year and would, if made or incurred by the taxpayer as a result of a transaction that occurred after 1971, be an eligible capital expenditure of the taxpayer; and
(b) the fair market value to the taxpayer on December 31, 1971 of the taxpayer’s specified right in respect of the government right, if no outlay or expenditure was made or incurred by the taxpayer for the purpose of acquiring the right or, if an outlay or expenditure was made or incurred, if that outlay or expenditure would have been an eligible capital expenditure of the taxpayer if it had been made or incurred as a result of a transaction that occurred after 1971.
(2) The portion of subsection 21(2.1) of the Rules after paragraph (b) is replaced by the following:
and an actual amount subsequently becomes payable to the taxpayer as consideration for the disposition by the taxpayer of, or for the taxpayer allowing the expiration of, the particular government right or any other government right acquired by the taxpayer for the purpose of effecting the continuation, without interruption, of rights that are substantially similar to the rights that the taxpayer had under the particular government right, for the purpose of the amended Act, the amount that has so become payable to the taxpayer shall be deemed to be the amount that would, if that person and the taxpayer had at all times been the same person, be determined under subsection (1) to be the amount that would have become so payable to the taxpayer.
(3) Subsections (1) and (2) come into force or are deemed to have come into force on January 1, 2017.
C.R.C., c. 945Income Tax Regulations
74 (1) Subsection 201(1) of the Income Tax Regulations is amended by striking out “or” at the end of paragraph (e), by adding “or” at the end of paragraph (f) and by adding the following after paragraph (f):
(g) the portion of the price for which a debt obligation was assigned or otherwise transferred that is deemed by subsection 20(14.2) of the Act to be interest that accrued on the debt obligation to which the transferee has become entitled to for a period commencing before the time of the transfer and ending at that particular time that is not payable until after that particular time if the payment is made by a person that is a financial company (whether acting as principal or as agent for the transferee) for the purposes of section 211
(2) Subsection 201(4) of the Regulations is replaced by the following:
(4) A person or partnership that is indebted in a calendar year under a debt obligation in respect of which subsection 12(4) of the Act and paragraph (1)(b) apply with respect to a taxpayer shall make an information return in prescribed form in respect of the amount (other than an amount to which paragraph (1)(g) applies) that would, if the year were a taxation year of the taxpayer, be included as interest in respect of the debt obligation in computing the taxpayer’s income for the year.
(3) Subsections (1) and (2) come into force or are deemed to have come into force on January 1, 2017.
75 (1) The definition security in subsection 230(1) of the Regulations is amended by adding the following after paragraph (c):
(c.1) a debt obligation that is, at any time, described in paragraph 7000(1)(d),
(2) Subsection (1) comes into force or is deemed to have come into force on January 1, 2017.
76 (1) Paragraph 600(b) of the Regulations is replaced by the following:
(b) subsections 13(4), (7.4) and (29), 20(24), 44(1) and (6), 45(2) and (3), 50(1), 53(2.1), 56.4(13), 70(6.2), (9.01), (9.11), (9.21) and (9.31), 72(2), 73(1), 80.1(1), 82(3), 83(2), 104(14), 107(2.001), 143(2), 146.01(7), 146.02(7), 164(6) and (6.1), 184(3), 251.2(6) and 256(9) of the Act;
(2) Subsection (1) comes into force or is deemed to have come into force on January 1, 2017.
(2) Paragraph 808(2)(e) of the Income Tax Regulations is replaced by the following:
(e) an amount equal to the aggregate of the cost amount to the corporation at the end of the year of each debt owing to it, or any other right of the corporation to receive an amount, that was outstanding as a result of the disposition by it of property in respect of which an amount would be included, by virtue of paragraph (a), (b) or (h), in its qualified investment in property in Canada at the end of the year if the property had not been disposed of by it before the end of that year,
(3) Paragraph 808(2)(l) of the Regulations is amended by adding “or” at the end of subparagraph (ii) and by repealing subparagraph (iii).
(4) Subsections (1) to (3) come into force or are deemed to come into force on January 1, 2017.
78 (1) Paragraph 1100(1)(a) of the Regulations is amended by adding the following after subparagraph (xii):
(xii.1) of Class 14.1, 5 per cent,
(2) Subsection 1100(1) of the Regulations is amended by adding the following after paragraph (c):
Additional Allowances — Class 14.1
(c.1) for a taxation year that ends before 2027, such additional amount as the taxpayer may claim in respect of property of Class 14.1 of Schedule II not exceeding
(i) 2% of the particular amount by which the undepreciated capital cost of the class at the beginning of 2017 exceeds the total of all amounts each of which is
(A) the amount of a deduction taken under paragraph 20(1)(a) of the Act in respect of the class for a preceding taxation year, and
(B) equal to three times the amount of the capital cost of a property deemed by subsection 13(39) of the Act to be acquired by the taxpayer in the year or a preceding year, and
(ii) the amount determined by the formula
A − B
where
- A
- is the lesser of
- B
- is the total of all amounts deductible for the year under paragraph 20(1)(a) of the Act in respect of the class because of subparagraph (i) or (a)(xii.1);
(3) Subsections (1) and (2) come into force or are deemed to have come into force on January 1, 2017.
- Date modified: