Income Tax Act

Marginal note:Tax payable

• 204.6 (1) If at the end of any month a taxpayer that is a registered investment described in paragraph 204.4(2)(b), (d) or (f) holds property that is not a prescribed investment for that taxpayer, it shall, in respect of that month, pay a tax under this Part equal to the total of all amounts each of which is an amount determined in respect of such a property by the formula

  0.01(A × B ÷ C)

  where

  A

  is the fair market value of the property at the time of its acquisition by the taxpayer;

  B

  is the total number of units or shares of the capital stock of the registered investment held at the end of the month by one or more

  • (a) trusts that are governed by any of a FHSA, RDSP, RESP, RRIF, RRSP, TFSA or deferred profit sharing plan, or

  • (b) registered investments described in paragraph 204.4(2)(b), (d) or (f); and

  C

  is the total number of issued units or issued and outstanding shares of the capital stock of the registered investment at the end of the month.

• Marginal note:Tax payable

  (2) Where at the end of any month a taxpayer that is a registered investment described in paragraph 204.4(2)(a) or (b) holds property that is a share, bond, mortgage, hypothecary claim or other security of a corporation or debtor (other than bonds, mortgages, hypothecary claims and other securities of or guaranteed by Her Majesty in right of Canada or a province or Canadian municipality), it shall, in respect of that month, pay a tax under this Part equal to 1% of the amount, if any, by which

  • (a) the total of all amounts each of which is the fair market value of such a property at the time of its acquisition

  exceeds

  • (b) 10% of the amount by which

    • (i) the total of all amounts each of which is the fair market value, at the time of acquisition, of one of its properties

    exceeds

    • (ii) the total of all amounts each of which is an amount owing by the trust at the end of the month in respect of the acquisition of real property or immovables.

• Marginal note:Tax payable — real property or immovables

  (3) If at the end of any month a taxpayer that is a registered investment described in paragraph 204.4(2)(a) holds real or immovable property, it shall, in respect of that month, pay a tax under this Part equal to 1% of the total of all amounts each of which is the amount by which the excess of

  • (a) the fair market value at the time of its acquisition of any one real or immovable property of the taxpayer

  over

  • (b) the total of all amounts each of which was an amount owing by it at the end of the month on account of its acquisition of the real or immovable property

  was greater than 10% of the amount by which the total of all amounts each of which is the fair market value at the time of its acquisition of a property held by it at the end of the month exceeds the total of all amounts each of which was an amount owing by it at the end of the month on account of its acquisition of real or immovable property.