Budget Implementation Act, 2017, No. 2 (S.C. 2017, c. 33)

(a.1) a designation is deemed to be an election under a prescribed provision of this Act if the designation is made under the definition principal residence in section 54; and

(iii) an underlying interest that relates to a purchase of currency, if it can reasonably be considered that the purchase is agreed to by the taxpayer in order to reduce its risk of fluctuations in the value of the currency in which a purchase or sale by the taxpayer of a capital property is denominated, in which an obligation that is a capital property of the taxpayer is denominated or from which a capital property of the taxpayer derives its value, and

(C) an underlying interest that relates to a sale of currency, if it can reasonably be considered that the sale is agreed to by the taxpayer in order to reduce its risk of fluctuations in the value of the currency in which a purchase or sale by the taxpayer of a capital property is denominated, in which an obligation that is a capital property of the taxpayer is denominated or from which a capital property of the taxpayer derives its value, and

Marginal note:When subsection (9) ceases to apply

(9.1) If paragraph (1)(c) did not apply to end the fiscal period of a partnership on December 31 of a calendar year (in this subsection referred to as the “preceding year”) because subsection (9) applies to the partnership, and to each other partnership described in relation to the partnership by any of subparagraphs (1)(c)(ii) to (iv), (in this subsection referred to collectively as the “aligned multi-tier partnerships” and each individually as an “aligned multi-tier partnership”),

• (a) subsection (9) ceases to apply — for the purpose of applying paragraph (1)(c) to each of the aligned multi-tier partnerships — in the calendar year following the preceding year (in this subsection referred to as the “current year”) if another partnership (in this subsection referred to as the “new partnership”) becomes in the current year a member of any of the aligned multi-tier partnerships, or any of the aligned multi-tier partnerships becomes in the current year a member of the new partnership, unless

  • (i) the fiscal period of the new partnership, and each other partnership described in relation to the new partnership by any of subparagraphs (1)(c)(ii) to (iv), ends in the current year on the same day as the fiscal period of each of the aligned multi-tier partnerships, and

  • (ii) each member (other than a partnership) of each aligned multi-tier partnership — or a subsidiary wholly-owned corporation of such a member — has been a member of the aligned multi-tier partnership from the end of the last fiscal period ending in the preceding year until the time at which the new partnership becomes a member of an aligned multi-tier partnership, or any of the aligned multi-tier partnerships becomes a member of the new partnership, as the case may be; and

• (b) if paragraph (a) does not apply because the conditions in subparagraphs (a)(i) and (ii) are met, the new partnership is deemed — for the purpose of applying paragraph (1)(c) to each of the aligned multi-tier partnerships and the new partnership in the current year and subsequent years — to have made the multi-tier alignment election referred to in subsection (9).

Marginal note:Factual control — interpretation

(5.11) For the purposes of the Act, the determination of whether a taxpayer has, in respect of a corporation, any direct or indirect influence that, if exercised, would result in control in fact of the corporation, shall

• (a) take into consideration all factors that are relevant in the circumstances; and

• (b) not be limited to, and the relevant factors need not include, whether the taxpayer has a legally enforceable right or ability to effect a change in the board of directors of the corporation, or its powers, or to exercise influence over the shareholder or shareholders who have that right or ability.

(c.2) subject to paragraph (a), if, at any particular time, as part of a series of transactions or events, two or more persons acquire shares of a corporation (in this paragraph referred to as the “acquiring corporation”) in exchange for or upon a redemption or surrender of interests in, or as a consequence of a distribution from, a partnership or trust, control of the acquiring corporation and of each corporation controlled by it immediately before the particular time is deemed to have been acquired by a person or group of persons at the particular time unless

• (i) in respect of each of the corporations, a person affiliated with the partnership or trust owned immediately before the particular time shares of the particular corporation having a total fair market value of more than 50% of the fair market value of all the issued and outstanding shares of the particular corporation immediately before the particular time,

• (ii) if all the securities (in this subparagraph as defined in subsection 122.1(1)) of the acquiring corporation that were acquired at or before the particular time as part of the series were acquired by one person, the person would

  • (A) not at the particular time control the acquiring corporation, and

  • (B) have at the particular time acquired securities of the acquiring corporation having a fair market value of not more than 50% of the fair market value of all the issued and outstanding shares of the acquiring corporation, or

• (iii) paragraph (c.1) applies, or this paragraph or paragraph (c.1) previously applied, to deem an acquisition of control of the acquiring corporation upon an acquisition of shares that was part of the same series of transactions or events;

(ii) the reference in paragraph 95(2)(f.13) to “the rate of exchange quoted by the Bank of Canada on” is to be read, in respect of the foreign affiliate and the taxation year, and with such modifications as the context requires, as a reference to “the relevant spot rate for”.