Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))
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Act current to 2023-01-11 and last amended on 2023-01-01. Previous Versions
AMENDMENTS NOT IN FORCE
— 2017, c. 33, ss. 2(1), (3), (4)
2 (1) Subsection 10(14) of the Income Tax Act is repealed.
(3) Subsection 10(14.1) of the Act, as enacted by subsection (2), is repealed.
(4) Subsections (1) and (3) come into force on January 1, 2024.
— 2017, c. 33, ss. 7(2), (4)
7 (2) Section 34 of the Act, as amended by subsection (1), is repealed.
(4) Subsection (2) comes into force on January 1, 2024.
— 2022, c. 19, ss. 3(1), (3), (4)
3 (1) Paragraph 18(1)(u) of the Act is replaced by the following:
Fees — individual saving plans
(u) any amount paid or payable by the taxpayer for services in respect of a FHSA, retirement savings plan, retirement income fund or TFSA under or of which the taxpayer is the annuitant or holder;
(3) Subsection 18(11) of the Act is amended by striking out “or” at the end of paragraph (i), by adding “or” at the end of paragraph (j) and by adding the following after paragraph (j):
(k) making a contribution to a FHSA,
(4) Subsections (1) and (3) come into force on April 1, 2023.
— 2022, c. 19, s. 4
4 (1) Clause 40(2)(g)(iv)(A) of the Act is replaced by the following:
(A) a trust governed by a deferred profit sharing plan, an employees profit sharing plan, a FHSA, a registered disability savings plan, a registered retirement income fund or a TFSA, under which the taxpayer is a beneficiary or immediately after the disposition becomes a beneficiary, or
(2) Subsection (1) comes into force on April 1, 2023.
— 2022, c. 19, s. 5
5 (1) Subsection 56(1) of the Act is amended by striking out “and” at the end of paragraph (z.4), by adding “and” at the end of paragraph (z.5) and by adding the following after paragraph (z.5):
First home savings account
(z.6) any amount required by section 146.6 to be included in computing the taxpayer’s income for the year.
(2) Subsection (1) comes into force on April 1, 2023.
— 2022, c. 19, s. 6
6 (1) Paragraph 60(i) of the Act is replaced by the following:
Premium or payment — FHSA, RRSP or RRIF
(i) any amount that is deductible under section 146, 146.3 or 146.6 or subsection 147.3(13.1) in computing the income of the taxpayer for the year;
(2) Subsection (1) comes into force on April 1, 2023.
— 2022, c. 19, ss. 7(1), (3), (5)
7 (1) Paragraph 66(12.6)(a) of the Act is replaced by the following:
(a) the assistance that the corporation has received, is entitled to receive or can reasonably be expected to receive at any time, and that can reasonably be related to the specified expenses or to Canadian exploration activities to which the specified expenses relate (other than assistance that can reasonably be related to expenses referred to in any of paragraphs (b) to (b.2)),
(3) Paragraph 66(12.62)(a) of the Act is replaced by the following:
(a) the assistance that the corporation has received, is entitled to receive, or can reasonably be expected to receive at any time, and that can reasonably be related to the specified expenses or to Canadian development activities to which the specified expenses relate (other than assistance that can reasonably be related to expenses referred to in any of paragraphs (b) to (b.2)),
(5) Subsections (1) and (3) apply in respect of flow-through share agreements made after March 2023.
— 2022, c. 19, s. 9
9 (1) Subsection 74.5(12) of the Act is amended by striking out “or” at the end of paragraph (b), by adding “or” at the end of paragraph (c) and by adding the following after paragraph (c):
(d) as a payment of a contribution under a FHSA.
(2) Subsection (1) comes into force on April 1, 2023.
— 2022, c. 19, s. 10
10 (1) Paragraph 75(3)(a) of the Act is replaced by the following:
(a) by a trust governed by a deferred profit sharing plan, an employee benefit plan, an employees profit sharing plan, a FHSA, a pooled registered pension plan, a registered disability savings plan, a registered education savings plan, a registered pension plan, a registered retirement income fund, a registered retirement savings plan, a registered supplementary unemployment benefit plan, a retirement compensation arrangement or a TFSA;
(2) Subsection (1) comes into force on April 1, 2023.
— 2022, c. 19, s. 13
13 (1) Subsection 104(1) of the Act is replaced by the following:
Reference to trust or estate
104 (1) In this Act, a reference to a trust or estate (in this Subdivision referred to as a “trust”) shall, unless the context otherwise requires, be read to include a reference to the trustee, executor, administrator, liquidator of a succession, heir or other legal representative having ownership or control of the trust property, but, except for the purposes of this subsection, subsection (1.1), section 150, subparagraph (b)(v) of the definition disposition in subsection 248(1) and paragraph (k) of that definition, a trust is deemed not to include an arrangement under which the trust can reasonably be considered to act as agent for all the beneficiaries under the trust with respect to all dealings with all of the trust’s property unless the trust is described in any of paragraphs (a) to (e.1) of the definition trust in subsection 108(1).
(2) Subsection (1) applies to taxation years that end after December 30, 2023.
— 2022, c. 19, ss. 15(1), (3)
15 (1) Paragraph (a) of the definition trust in subsection 108(1) of the Act is replaced by the following:
(a) an amateur athlete trust, an employee life and health trust, an employee trust, a trust described in paragraph 149(1)(o.4) or a trust governed by a deferred profit sharing plan, an employee benefit plan, an employees profit sharing plan, a FHSA, a foreign retirement arrangement, a pooled registered pension plan, a registered disability savings plan, a registered education savings plan, a registered pension plan, a registered retirement income fund, a registered retirement savings plan, a registered supplementary unemployment benefit plan or a TFSA,
(3) Subsection (1) comes into force on April 1, 2023.
— 2022, c. 19, s. 23
23 (1) Paragraph (a) of the definition excluded right or interest in subsection 128.1(10) of the Act is amended by adding the following after subparagraph (iii.2):
(iii.3) a FHSA,
(2) Subsection (1) comes into force on April 1, 2023.
— 2022, c. 19, ss. 27(2), (4)
27 (2) Subsection 138.1(7) of the Act is replaced by the following:
Non-application of subsections (1) to (6)
(7) Subsections (1) to (6) do not apply to the holder of a segregated fund policy with respect to such a policy that is issued or effected as or under a FHSA, pooled registered pension plan, registered pension plan, registered retirement income fund, registered retirement savings plan or TFSA.
(4) Subsection (2) comes into force on April 1, 2023.
— 2022, c. 19, s. 29
29 (1) Subsection 146(16) of the Act is amended by striking out “or” at the end of paragraph (a.1) and by adding the following after that paragraph:
(a.2) to a FHSA for the benefit of the transferor, if subsection (8.3) would not apply to an amount in respect of the property in the case that the property was instead received by the transferor as a benefit out of or under the registered retirement savings plan, or
(2) Paragraph 146(16)(d) of the Act is replaced by the following:
(d) no deduction may be made under subsection (5), (5.1) or (8.2) or section 8, 60 or 146.6 in respect of the payment or transfer in computing the income of any taxpayer, and
(3) Subsections (1) and (2) come into force on April 1, 2023.
— 2022, c. 19, s. 30
30 (1) Paragraph 146.3(2)(f) of the Act is amended by striking out “or” at the end of subparagraph (viii), by adding “or” at the end of subparagraph (ix) and by adding the following after subparagraph (ix):
(x) a FHSA in accordance with subsection 146.6(7);
(2) Subsection (1) comes into force on April 1, 2023.
— 2022, c. 19, s. 31
31 (1) The Act is amended by adding the following after section 146.5:
Tax-Free First Home Savings Account
Definitions
146.6 (1) The following definitions apply in this section.
- annual FHSA limit
annual FHSA limit of a taxpayer for a taxation year is the least of
(a) the amount determined by the formula
A + B − C
where
- A
- is the total of all contributions made to a FHSA in the year by the taxpayer (other than any contributions made after the taxpayer’s first qualifying withdrawal from a FHSA),
- B
- is
(i) if the taxpayer’s maximum participation period has not begun in a preceding taxation year, nil, and
(ii) in any other case, the amount by which the amount determined under this paragraph for the preceding taxation year exceeds the annual FHSA limit for that taxation year, and
- C
- is the total of all designated amounts described in paragraph (b) of the definition designated amount in subsection 207.01(1) for the year,
(b) the amount determined by the formula
$8,000 + D − (E − F − G)
where
- D
- is the amount of the FHSA carryforward for the taxation year;
- E
- is the total of all amounts transferred in the year or a preceding taxation year under paragraph 146(16)(a.2) to a FHSA under which the taxpayer is the holder, and
- F
- is the total of all amounts, each of which is an amount determined in respect of each preceding taxation year that is
(i) if the taxpayer had not started their maximum participation period in the preceding taxation year, nil, or
(ii) in any other case, the lesser of
(A) the amount determined by the formula
H − I
where
- H
- is the amount determined for E in the preceding taxation year, and
- I
- is the amount determined for F in the preceding taxation year, and
(B) $8,000 plus the amount of the FHSA carryforward for the preceding taxation year, and
- G
- is the total of all designated amounts described in paragraph (a) of the definition designated amount in subsection 207.01(1), and
(c) nil, if the taxation year is after the year in which
(i) the taxpayer’s maximum participation period has ended, or
(ii) the taxpayer has died. (plafond annuel au titre du CELIAPP)
- beneficiary
beneficiary under a FHSA means an individual (including an estate) or a qualified donee that has a right to receive a distribution from the FHSA after the death of the holder of the FHSA. (bénéficiaire)
- first home savings account
first home savings account or FHSA means an arrangement registered with the Minister that has not ceased to be a FHSA under subsection 146.6(16). (compte d’épargne libre d’impôt pour l’achat d’une première propriété ou CELIAPP)
- FHSA carryforward
FHSA carryforward of a taxpayer for a taxation year is the least of
(a) $8,000,
(b) the amount determined by the formula
A − B
where
- A
- is the amount determined in paragraph (b) of the definition annual FHSA limit for the preceding taxation year, and
- B
- is the amount determined in paragraph (a) of the definition annual FHSA limit for the preceding taxation year, and
(c) nil, if the taxpayer had not started their maximum participation period prior to the taxation year. (montant des cotisations reporté)
- holder
holder of an arrangement means
(a) until the death of the individual who entered into the arrangement, the individual; and
(b) after the death of the individual, the individual’s survivor, if the survivor is designated under the arrangement to become a successor of the holder and is a qualifying individual. (titulaire)
- issuer
issuer of an arrangement means the person described as the issuer in the definition qualifying arrangement. (émetteur)
- maximum participation period
maximum participation period of an individual means the period that
(a) begins when an individual first enters into a qualifying arrangement; and
(b) ends at the end of the year following the year in which the earliest of the following events occur:
(i) the 14th anniversary of the date the individual first enters into a qualifying arrangement,
(ii) the individual attains 70 years of age, and
(iii) the individual first makes a qualifying withdrawal from a FHSA. (période de participation maximale)
- non-qualified investment
non-qualified investment has the same meaning as in subsection 207.01(1). (placement non admissible)
- qualified investment
qualified investment has the same meaning as in subsection 207.01(1). (placement admissible)
- qualifying arrangement
qualifying arrangement, at a particular time, means an arrangement
(a) that is entered into after March 2023 between a person (in this definition referred to as the “issuer”) and a qualifying individual;
(b) that is
(i) an arrangement in trust with an issuer that is a corporation licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee,
(ii) an annuity contract with an issuer that is a licensed annuities provider, or
(iii) a deposit with an issuer that is
(A) a person that is, or is eligible to become, a member of the Canadian Payments Association, or
(B) a credit union that is a shareholder or member of a body corporate referred to as a “central” for the purposes of the Canadian Payments Act;
(c) that provides for contributions to be made under the arrangement to the issuer in consideration of, or to be used, invested or otherwise applied for the purpose of, the issuer making distributions under the arrangement to the holder;
(d) under which the issuer and the qualifying individual agree, at the time the arrangement is entered into, that the issuer will file with the Minister an election to register the arrangement as a FHSA, in the prescribed form and manner under the Social Insurance Number of the qualifying individual with whom the arrangement was entered into; and
(e) that, at all times throughout the period that begins at the time the arrangement is entered into and that ends at the particular time, complies with the conditions in subsection (2). (arrangement admissible)
- qualifying home
qualifying home means
(a) a housing unit located in Canada; or
(b) a share of the capital stock of a cooperative housing corporation, the holder of which is entitled to possession of a housing unit located in Canada, except that, where the context so requires, a reference to a share with a right to possession of a housing unit described means the housing unit to which the share relates. (habitation admissible)
- qualifying individual
qualifying individual, at a particular time, means an individual who
(a) is a resident of Canada;
(b) is at least 18 years of age; and
(c) did not, at any prior time in the calendar year or in the preceding four calendar years, inhabit as a principal place of residence a qualifying home (or what would be a qualifying home if it were located in Canada) that was owned, whether jointly with another person or otherwise, by
(i) the individual, or
(ii) a person who is the spouse or common-law partner of the individual at the particular time. (particulier déterminé)
- qualifying withdrawal
qualifying withdrawal of an individual means an amount received at a particular time by the individual as a benefit out of or under a FHSA if
(a) the amount is received as a result of the individual’s written request in prescribed form in which the individual sets out the location of a qualifying home that the individual has begun, or intends not later than one year after its acquisition by the individual to begin, using as a principal place of residence;
(b) the individual
(i) is a resident of Canada throughout the period that begins at the particular time and ends at the earlier of the time of the individual’s death and the time at which the individual acquires the qualifying home, and
(ii) does not have an owner-occupied home within the meaning of paragraph 146.01(2)(a.1) in the period
(A) that begins at the beginning of the fourth preceding calendar year that ended before the particular time, and
(B) that ends on the 31st day before the particular time;
(c) the individual entered into an agreement in writing before the particular time for the acquisition or construction of the qualifying home before October 1 of the calendar year following the year in which the amount was received; and
(d) the individual did not acquire the qualifying home more than 30 days before the particular time. (retrait admissible)
- survivor
survivor of a qualifying individual means another individual who is, immediately before the qualifying individual’s death, a spouse or common-law partner of the qualifying individual. (survivant)
Qualifying arrangement conditions
(2) For the purposes of paragraph (e) of the definition qualifying arrangement in subsection (1), the conditions are as follows:
(a) the arrangement requires that it be maintained for the exclusive benefit of the holder (determined without regard to any right of a person to receive a payment out of or under the arrangement only on or after the death of the holder);
(b) the arrangement prohibits, while there is a holder of the arrangement, anyone that is neither the holder nor the issuer of the arrangement from having rights under the arrangement relating to the amount and timing of distributions and the investing of funds;
(c) the arrangement prohibits anyone other than the holder from making contributions under the arrangement;
(d) the arrangement permits distributions to be made to reduce the amount of tax otherwise payable by the holder under section 207.021;
(e) the arrangement provides that, at the direction of the holder, the issuer shall transfer all or any part of the property held in connection with the arrangement (or an amount equal to its value) to another FHSA of the holder or to an RRSP or a RRIF under which the holder is the annuitant;
(f) if the arrangement is an arrangement in trust, it prohibits the trust from borrowing money or other property for the purposes of the arrangement;
(g) the arrangement provides that it ceases to be a FHSA after the end of the holder’s maximum participation period;
(h) the arrangement, if it involves an issuer described in subparagraph (b)(iii) of the definition qualifying arrangement in subsection (1), includes provisions stipulating that the issuer has no right of offset with respect to the property held under the arrangement in connection with any debt or obligation owing to the issuer; and
(i) the arrangement meets prescribed conditions.
Trust not taxable
(3) No tax is payable under this Part by a trust that is governed by a FHSA on its taxable income for a taxation year, except that, if at any time in the taxation year, it carries on one or more businesses or holds one or more properties that are non-qualified investments for the trust, tax is payable under this Part by the trust on the amount that would be its taxable income for the taxation year if it had no incomes or losses from sources other than those businesses and properties, and no capital gains or capital losses other than from dispositions of those properties, and for that purpose,
(a) income includes dividends described in section 83;
(b) the trust’s taxable capital gain or allowable capital loss from the disposition of a property is equal to its capital gain or capital loss, as the case may be, from the disposition; and
(c) the trust’s income shall be computed without reference to subsection 104(6).
Carrying on a business
(4) If tax is payable under this Part for a taxation year by application of subsection (3) by a trust that is governed by a FHSA that carries on one or more businesses at any time in the taxation year,
(a) the holder of the FHSA is jointly and severally, or solidarily, liable with the trust to pay each amount payable under this Act by the trust that is attributable to that business or those businesses; and
(b) the issuer’s liability at any time for amounts payable under this Act in respect of that business or those businesses may not exceed the total of
(i) the amount of property of the trust that the issuer is in possession or control of at that time in its capacity as legal representative of the trust, and
(ii) the total amount of all distributions of property from the trust on or after the date that the notice of assessment was sent in respect of the taxation year and before that time.
FHSA deduction
(5) There may be deducted in computing a taxpayer’s income for a taxation year an amount not exceeding the lesser of
(a) the amount determined by the formula
A − B
where
- A
- is the total of all amounts each of which is the taxpayer’s annual FHSA limit for the year and each preceding taxation year, and
- B
- is the total of all amounts each of which is an amount deducted under this subsection in computing the individual’s income for preceding taxation years, and
(b) the amount by which $40,000 exceeds the total of
(i) the amount determined for B in paragraph (a), and
(ii) all amounts transferred in the year or a preceding taxation year under paragraph 146(16)(a.2) to a FHSA under which the taxpayer is the holder.
Withdrawals included in income
(6) There shall be included in computing the income of a taxpayer for a taxation year the total of all amounts received by the taxpayer in the year out of or under a FHSA of which the taxpayer is the holder, other than an amount that is
(a) a qualifying withdrawal;
(b) a designated amount as defined in subsection 207.01(1); or
(c) otherwise included in computing the income of the taxpayer.
Transfer of amounts
(7) Subsection (8) applies to an amount transferred at a particular time from a FHSA (in this subsection referred to as the “transferor FHSA”) if the following conditions are met:
(a) the amount is transferred on behalf of an individual who is
(i) the holder of the transferor FHSA,
(ii) a spouse or common-law partner or former spouse or common-law partner of the holder of the transferor FHSA and who is entitled to the amount under a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property between the holder and the individual, in settlement of rights arising out of, or on a breakdown of, their marriage or common-law partnership, or
(iii) entitled to the amount as a consequence of the death of the holder of the transferor FHSA and was a spouse or common-law partner of the holder immediately before the death;
(b) the amount is transferred directly to
(i) another FHSA of the individual, or
(ii) an RRSP or a RRIF under which the individual is the annuitant; and
(c) if the transfer is not made to another FHSA of the holder of the transferor FHSA, the amount does not exceed the amount determined by the formula
A − B
where
- A
- is the amount that is the total fair market value, immediately before the particular time, of all property held by a FHSA under which the holder of the transferor FHSA is a holder, and
- B
- is the excess FHSA amount (as defined in subsection 207.01(1)) of the holder of the transferor FHSA at the particular time.
Tax-free transfer
(8) If this subsection applies to an amount transferred from a FHSA,
(a) the amount shall not, by reason only of the transfer, be included in computing the income of any taxpayer; and
(b) no deduction may be made under this Part in respect of the amount in computing the income of any taxpayer.
Taxable transfer
(9) If an amount is transferred from a FHSA to a plan or fund (in this subsection referred to as the “transferee plan”) that is a FHSA, RRSP or RRIF and subsection (8) does not apply to the amount transferred,
(a) the amount is deemed to have been received from the FHSA by the holder of the FHSA;
(b) the holder or annuitant of the transferee plan is deemed to have paid the amount as a contribution or premium to the transferee plan; and
(c) in the case that the transferee plan is a RRIF, for the purposes of subsection 146(5) and Part X.1, the annuitant of the transferee plan is deemed to have paid the amount at the time of the transfer as a premium under a RRSP under which the annuitant is the annuitant (as defined in subsection 146(1)).
Apportionment of transferred amount
(10) If an amount is transferred from a FHSA to another FHSA, or to a RRSP or RRIF, and a portion but not all of the amount is transferred in accordance with subsection (7),
(a) subsection (8) applies to the portion of the amount transferred in accordance with subsection (7), and
(b) subsection (9) applies with respect to the remainder of the amount.
Security for loan
(11) If at any time in a taxation year a trust governed by a FHSA uses or permits to be used any property of the trust as security for a loan, the fair market value of the property at the time it commenced to be so used shall be included in computing the income for the year of the holder of the FHSA at that time.
Recovery of property used as security
(12) If in a taxation year a property described in subsection (11) ceases to be used as security for a loan, there may be deducted, in computing the income of the holder of the relevant FHSA for the taxation year, an amount equal to the amount determined by the formula
A − B
where
- A
- is the amount included by application of subsection (11) in computing the income of the holder as a consequence of the property being used as security for a loan; and
- B
- is the net loss (exclusive of payments by the trust as or on account of interest) sustained by the trust in consequence of its using the property, or permitting it to be used, as security for the loan and not as a result of a change in the fair market value of the property.
Successor holder
(13) If the holder of a FHSA dies and the holder’s survivor is designated as the successor holder of the FHSA, the survivor is, immediately after the time of death, deemed to have entered into a new qualifying arrangement in respect of the FHSA unless
(a) the survivor is a qualifying individual and the balance of the FHSA is transferred to a RRSP or a RRIF of the survivor, or distributed to the survivor in accordance with subsection (14), by the end of the year following the year of death; or
(b) the survivor is not a qualifying individual, in which case the balance of the FHSA is to be transferred to a RRSP or a RRIF of the survivor, or distributed to the survivor in accordance with subsection (14), by the end of the year following the year of death.
Distribution on death
(14) If, as a consequence of the death of the holder of a FHSA, an amount is distributed in a taxation year from the FHSA to, or on behalf of, a beneficiary, the amount shall be included in computing the beneficiary’s income for the year.
Deemed transfer or distribution
(15) If an amount is distributed at any time from the FHSA of a deceased holder to the holder’s legal representative and a survivor of the holder is entitled to all or a portion of the amount in full or partial satisfaction of the survivor’s rights as a person beneficially interested under the deceased’s estate, the following rules apply:
(a) if a payment is made from the estate to a FHSA, RRSP or RRIF of the survivor, the payment is deemed to be a transfer from the FHSA to the extent that
(i) it is so designated jointly by the legal representative and the survivor in prescribed form filed with the Minister, and
(ii) it meets the conditions to be a transferred amount under subsections (7) to (10);
(b) if a payment is made from the estate to the survivor, the payment is deemed for the purposes of subsection (14) to be a distribution to the survivor as a beneficiary to the extent that it is so designated jointly by the legal representative and the survivor in prescribed form filed with the Minister; and
(c) for the purposes of subsection (14), the amount distributed to the legal representative from the FHSA is deemed to be reduced by the amounts designated in paragraphs (a) and (b).
Arrangement ceasing to be a FHSA
(16) An arrangement that was filed with the Minister as a FHSA ceases to be a FHSA at
(a) subject to paragraph (b), the earliest of the following times:
(i) the end of the maximum participation period of the last holder,
(ii) the end of the year following the year of the death of the last holder,
(iii) the time at which the arrangement ceases to be a qualifying arrangement, or
(iv) the time at which the arrangement is not administered in accordance with the conditions in subsection (2); or
(b) a later time specified by the Minister in writing.
Rules applicable on FHSA cessation
(17) If an arrangement ceases at a particular time to be a FHSA,
(a) subsection (3) does not apply to exempt the trust governed by the arrangement from tax under this Part on the taxable income of the trust earned after the particular time;
(b) if the taxpayer who was the holder under the arrangement is not deceased at the particular time, an amount equal to the fair market value of all property of the arrangement immediately before the particular time is to be included in the taxpayer’s income for the taxation year that includes the particular time; and
(c) if the last holder is deceased at the particular time, each beneficiary of the FHSA shall include in their income, for the taxation year that includes the particular time, the proportion of the fair market value of all property of the arrangement immediately before the particular time that the beneficiary is entitled to.
Regulations
(18) The Governor in Council may make regulations requiring issuers of FHSAs to file information returns in respect of FHSAs.
(2) Subsection (1) comes into force on April 1, 2023.
— 2022, c. 19, s. 32
32 (1) Subsection 148(1) of the Act is amended by adding the following after paragraph (b.3):
(b.4) a FHSA,
(2) Subsection (1) comes into force on April 1, 2023.
— 2022, c. 19, s. 33
33 (1) Subsection 149(1) of the Act is amended by adding the following after paragraph (u.3):
FHSA trust
(u.4) a trust governed by a FHSA to the extent provided by section 146.6;
(2) Subsection (1) comes into force on April 1, 2023.
— 2022, c. 19, s. 35
35 (1) The portion of subsection 150(1.1) of the Act before paragraph (a) is replaced by the following:
Exception
(1.1) Subject to subsection (1.2), subsection (1) does not apply to a taxation year of a taxpayer if
(2) Section 150 of the Act is amended by adding the following after subsection (1.1):
Exception — trusts
(1.2) Subsection (1.1) does not apply to a taxation year of a trust if the trust is resident in Canada and is an express trust, or for civil law purposes a trust other than a trust that is established by law or by judgement, unless the trust
(a) had been in existence for less than three months at the end of the year;
(b) holds assets with a total fair market value that does not exceed $50,000 throughout the year, if the only assets held by the trust throughout the year are one or more of
(i) money,
(ii) a debt obligation described in paragraph (a) of the definition fully exempt interest in subsection 212(3),
(iii) a share, debt obligation or right listed on a designated stock exchange,
(iv) a share of the capital stock of a mutual fund corporation,
(v) a unit of a mutual fund trust,
(vi) an interest in a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)), and
(vii) an interest as a beneficiary under a trust, all the units of which are listed on a designated stock exchange;
(c) is required under the relevant rules of professional conduct or the laws of Canada or a province to hold funds for the purposes of the activity that is regulated under those rules or laws, provided the trust is not maintained as a separate trust for a particular client or clients;
(d) is a registered charity;
(e) is a club, society or association described in paragraph 149(1)(l);
(f) is a mutual fund trust;
(g) is, for greater certainty, a related segregated fund trust, within the meaning assigned by paragraph 138.1(1)(a);
(h) is a trust, all the units of which are listed on a designated stock exchange;
(i) is prescribed to be a master trust;
(j) is, for greater certainty, a graduated rate estate;
(k) is a qualified disability trust, as defined in subsection 122(3);
(l) is an employee life and health trust;
(m) is a trust described under paragraph 81(1)(g.3);
(n) is a trust under or governed by
(i) a deferred profit sharing plan,
(ii) a pooled registered pension plan,
(iii) a registered disability savings plan,
(iv) a registered education savings plan,
(v) a registered pension plan,
(vi) a registered retirement income fund,
(vii) a registered retirement savings plan,
(viii) a tax-free savings account,
(ix) an employee profit sharing plan,
(x) a registered supplementary unemployment benefit plan, or
(xi) a first home savings account; or
(o) is a cemetery care trust or a trust governed by an eligible funeral arrangement.
Bare trusts and arrangements — inclusion
(1.3) For the purposes of this section, a trust includes an arrangement under which a trust can reasonably be considered to act as agent for all the beneficiaries under the trust with respect to all dealings with all of the trust’s property.
Solicitor-client privilege
(1.4) For greater certainty, subsections (1.1) to (1.3) do not require the disclosure of information that is subject to solicitor-client privilege.
(3) Subsections (1) and (2) apply to taxation years that end after December 30, 2023.
— 2022, c. 19, s. 37
37 (1) Subsection 153(1) of the Act is amended by striking out “or” at the end of paragraph (t), by adding “or” at the end of paragraph (u) and by adding the following after paragraph (u):
(v) a payment out of or under
(i) a FHSA, if the amount is required by section 146.6 to be included in computing a taxpayer’s income, or
(ii) an arrangement that ceased to be a FHSA by application of subsection 146.6(16)
(2) Subsection (1) comes into force on April 1, 2023.
— 2022, c. 19, s. 40
40 (1) Section 160.2 of the Act is amended by adding the following after subsection (2.2):
Joint and several liability — FHSA
(2.3) If an amount required to be included in the income of a holder of a FHSA because of section 146.6 is received by a taxpayer other than the holder, that taxpayer is jointly and severally, or solidarily, liable with the holder to pay a part of the holder’s tax under this Part for the taxation year in which the amount is received equal to the amount by which the holder’s tax for the year exceeds the amount that would be the holder’s tax for the year if the amount had not been received, but nothing in this subsection limits the liability of the holder under any other provision of this Act or of the taxpayer for the interest that the taxpayer is liable to pay under this Act on an assessment in respect of the amount that the taxpayer is liable to pay because of this subsection.
(2) Subsection 160.2(4) of the Act is replaced by the following:
Rules applicable
(4) If a taxpayer and an annuitant or holder have, by virtue of subsection (1), (2) or (2.3), become jointly and severally, or solidarily, liable in respect of part or all of a liability of the annuitant or holder under this Act, the following rules apply:
(a) a payment by the taxpayer on account of the taxpayer’s liability shall to the extent thereof discharge their liability; but
(b) a payment by the annuitant or holder on account of the liability of the annuitant or holder discharges the taxpayer’s liability only to the extent that the payment operates to reduce the liability of the annuitant or holder to an amount less than the amount in respect of which the taxpayer was, by subsection (1), (2) or (2.3), as the case may be, made jointly and severally, or solidarily, liable.
(3) Subsections (1) and (2) come into force on April 1, 2023.
— 2022, c. 19, s. 42
False statement or omission — trust return
42 (1) Section 163 of the Act is amended by adding the following after subsection (4):
False statement or omission
(5) A person or partnership is liable to a penalty if the person or partnership
(a) knowingly or under circumstances amounting to gross negligence
(i) makes — or participates in, assents to or acquiesces in, the making of — a false statement or omission in a return of income of a trust that is not subject to one of the exceptions listed in paragraphs 150(1.2)(a) to (o) for a taxation year, or
(ii) fails to file a return described in subparagraph (i); or
(b) fails to comply with a demand under subsection 150(2) or 231.2(1) to file a return described in subparagraph (a)(i).
False statement or omission — trust return
(6) The amount of the penalty to which the person or partnership is liable under subsection (5) is equal to the greater of
(a) $2,500, and
(b) 5% of the highest amount at any time in the year that is equal to the total fair market value of all the property held by the trust referred to in subsection (5) at that time.
(2) Subsection (1) applies to taxation years that end after December 30, 2023.
— 2022, c. 19, ss. 49(2), (4)
49 (2) Paragraph (a) of the description of B in subsection 204.6(1) of the Act is replaced by the following:
(a) trusts that are governed by any of a FHSA, RDSP, RESP, RRIF, RRSP, TFSA or deferred profit sharing plan, or
(4) Subsection (2) applies in respect of months after March 2023.
— 2022, c. 19, s. 50
50 (1) The portion of subsection 207.01(1) of the Act before the first definition is replaced by the following:
Definitions
207.01 (1) The following definitions and the definitions in subsections 146(1) (other than the definition benefit), 146.1(1), 146.2(1), 146.3(1), 146.4(1) and 146.6(1) apply in this Part and Part XLIX of the Income Tax Regulations.
(2) The definition registered plan in subsection 207.01(1) of the Act is replaced by the following:
- registered plan
registered plan means a FHSA, RDSP, RESP, RRIF, RRSP or TFSA. (régime enregistré)
(3) The definition controlling individual in subsection 207.01(1) of the Act is amended by striking out “or” at the end of paragraph (c), by adding “or” at the end of paragraph (d) and by adding the following after paragraph (d):
(e) the holder of a FHSA. (particulier contrôlant)
(4) The portion of the definition qualified investment in subsection 207.01(1) of the Act before paragraph (b) is replaced by the following:
- qualified investment
qualified investment for a trust governed by a FHSA or TFSA means
(a) an investment that would be described by any of paragraphs (a) to (d), (f) and (g) of the definition qualified investment in section 204 if the reference in that definition to “a trust governed by a deferred profit sharing plan or revoked plan” were read as a reference to “a trust governed by a FHSA or TFSA” and if that definition were read without reference to the words “with the exception of excluded property in relation to the trust”;
(5) Paragraph (a) of the definition registered plan strip in subsection 207.01(1) of the Act is replaced by the following:
(a) included in the income of a person under section 146, 146.1, 146.3, 146.4 or 146.6;
(6) The definition registered plan strip in subsection 207.01(1) of the Act is amended by adding the following after paragraph (b):
(b.1) a qualifying withdrawal under section 146.6;
(b.2) a designated amount;
(7) Subparagraph (d)(i) of the definition swap transaction in subsection 207.01(1) of the Act is replaced by the following:
(i) both registered plans are RRIFs, RRSPs or FHSAs;
(8) Subsection 207.01(1) of the Act is amended by adding the following in alphabetical order:
- designated amount
designated amount of an individual means an amount, not exceeding the excess FHSA amount of the individual, designated by the individual in the prescribed form and manner that is
(a) a transfer in accordance with subparagraph 146.6(7)(b)(ii) to a FHSA under which the individual is the holder, to the extent that it does not exceed the total of all amounts transferred under paragraph 146(16)(a.2) on or before the date of the designation less the total of all amounts previously designated under this paragraph; or
(b) a withdrawal from a FHSA under which the individual is the holder, to the extent that it does not exceed the total of all amounts contributed to a FHSA under which the individual is the holder on or before the date of the designation less the total of all amounts previously designated under this paragraph. (montant désigné)
- excess FHSA amount
excess FHSA amount of an individual at a particular time in a taxation year means the amount determined by the formula
A + B − C − D − E
where
- A
- is the total of all amounts each of which is a contribution made to a FHSA by the individual at or before the particular time;
- B
- is the total of all amounts transferred under paragraph 146(16)(a.2), at or before the particular time, to a FHSA under which the individual is the holder;
- C
- is the lesser of
(a) $40,000, and
(b) the amount determined by the formula
$8,000 + F + G + H − I
where
- F
- is the amount of the FHSA carryforward for the taxation year,
- G
- is the total of all amounts each of which is a contribution made to a FHSA by the individual at or before the end of the immediately preceding taxation year,
- H
- is the total of all amounts transferred under paragraph 146(16)(a.2), at or before the end of the immediately preceding taxation year, to a FHSA under which the individual is the holder, and
- I
- is the excess FHSA amount determined at the end of the immediately preceding taxation year;
- D
- is the total of all amounts each of which is a designated amount in respect of a transfer or withdrawal made by the individual in the taxation year but before the particular time; and
- E
- is the total of all amounts required to be included in computing the income of the individual in the taxation year under subsection 146.6(6) or (17) at or before the particular time. (excédent de CELIAPP)
(9) Subsections (1) to (8) come into force on April 1, 2023.
— 2022, c. 19, s. 51
51 (1) The Act is amended by adding the following after section 207.02:
Tax payable on excess FHSA amount
207.021 If, at any time in a calendar month, an individual has an excess FHSA amount, the individual shall, in respect of that month, pay a tax under this Part equal to 1% of the highest such amount in that month.
Survivor as successor holder
207.022 If an individual’s survivor becomes the holder of a FHSA as a consequence of the individual’s death and, immediately before the individual’s death, the individual had an excess FHSA amount, the survivor is deemed to have made, at the beginning of the month following the individual’s death, a contribution under a FHSA equal to the amount, if any, by which
(a) that excess FHSA amount
exceeds
(b) the total fair market value immediately before the individual’s death of all property held under the FHSAs of the individual (other than a FHSA in respect of which the survivor became the successor holder as a consequence of the individual’s death).
(2) Subsection (1) comes into force on April 1, 2023.
— 2022, c. 19, s. 52
52 (1) Section 207.06 of the Act is amended by adding the following after subsection (2):
Waiver of tax payable
(3) If an individual would otherwise be liable to pay a tax under section 207.021, the Minister may waive or cancel all or part of the liability if
(a) the individual establishes to the satisfaction of the Minister that the liability arose as a consequence of a reasonable error; and
(b) one or more distributions are made without delay under a FHSA of which the individual is the holder, the total amount of which is not less than the total of
(i) the amount in respect of which the individual would otherwise be liable to pay tax, and
(ii) the income (including any capital gain) that is reasonably attributable, directly or indirectly, to the amount described in subparagraph (i).
(2) Subsection (1) comes into force on April 1, 2023.
— 2022, c. 19, ss. 53(1), (3)
53 (1) Subsection 212(1) of the Act is amended by striking out “or” at the end of paragraph (w), by adding “or” at the end of paragraph (x) and by adding the following after paragraph (x):
First home savings account
(y) a payment out of a FHSA, other than any portion of the payment that is transferred in accordance with subsection 146.6(7).
(3) Subsection (1) comes into force on April 1, 2023.
— 2022, c. 19, s. 57
57 (1) Subsection 248(1) of the Act is amended by adding the following in alphabetical order:
- first home savings account
first home savings account or FHSA has the same meaning as in subsection 146.6(1); (compte d’épargne libre d’impôt pour l’achat d’une première propriété ou CELIAPP)
(2) Subsection (1) comes into force on April 1, 2023.
— 2022, c. 19, s. 58
58 (1) Subsection 253.1(1) of the Act is replaced by the following:
Investments in limited partnerships
253.1 (1) For the purposes of subparagraph 108(2)(b)(ii), paragraphs 130.1(6)(b), 131(8)(b), 132(6)(b) and 146.1(2.1)(c), subsection 146.2(6), paragraph 146.4(5)(b), subsections 146.6(3) and 147.5(8), paragraph 149(1)(o.2), the definition private holding corporation in subsection 191(1), the definition investment fund in subsection 251.2(1) and regulations made for the purposes of paragraphs 149(1)(o.3) and (o.4), if a trust or corporation holds an interest as a member of a partnership and, by operation of any law governing the arrangement in respect of the partnership, the liability of the member as a member of the partnership is limited, the member shall not, solely because of its acquisition and holding of that interest, be considered to carry on any business or other activity of the partnership.
(2) Subsection (1) comes into force on April 1, 2023.
- Date modified: