Income Tax Act

Marginal note:Definitions

• 120.4 (1) The definitions in this subsection apply in this section.

  excluded amount

  montant exclu

  excluded amount, in respect of an individual for a taxation year, means an amount that is the income from a property acquired by or for the benefit of the individual as a consequence of the death of

  • (a) a parent of the individual; or

  • (b) any person, if the individual is

    • (i) enrolled as a full-time student during the year at a post-secondary educational institution (as defined in subsection 146.1(1)), or

    • (ii) an individual in respect of whom an amount may be deducted under section 118.3 in computing a taxpayer’s tax payable under this Part for the year. (montant exclu)

  specified individual

  particulier déterminé

  specified individual, in relation to a taxation year, means an individual who

  • (a) had not attained the age of 17 years before the year;

  • (b) at no time in the year was non-resident; and

  • (c) has a parent who is resident in Canada at any time in the year. (particulier déterminé)

  split income

  revenu fractionné

  split income, of a specified individual for a taxation year, means the total of all amounts (other than excluded amounts) each of which is

  • (a) an amount required to be included in computing the individual’s income for the year

    • (i) in respect of taxable dividends received by the individual in respect of shares of the capital stock of a corporation (other than shares of a class listed on a designated stock exchange or shares of the capital stock of a mutual fund corporation), or

    • (ii) because of the application of section 15 in respect of the ownership by any person of shares of the capital stock of a corporation (other than shares of a class listed on a designated stock exchange),

  • (b) a portion of an amount included because of the application of paragraph 96(1)(f) in computing the individual’s income for the year, to the extent that the portion

    • (i) is not included in an amount described in paragraph (a), and

    • (ii) can reasonably be considered to be income derived from the provision of goods or services by a partnership or trust to or in support of a business carried on by

      • (A) a person who is related to the individual at any time in the year,

      • (B) a corporation of which a person who is related to the individual is a specified shareholder at any time in the year, or

      • (C) a professional corporation of which a person related to the individual is a shareholder at any time in the year, or

  • (c) a portion of an amount included because of the application of subsection 104(13) or 105(2) in respect of a trust (other than a mutual fund trust) in computing the individual’s income for the year, to the extent that the portion

    • (i) is not included in an amount described in paragraph (a), and

    • (ii) can reasonably be considered

      • (A) to be in respect of taxable dividends received in respect of shares of the capital stock of a corporation (other than shares of a class listed on a designated stock exchange or shares of the capital stock of a mutual fund corporation),

      • (B) to arise because of the application of section 15 in respect of the ownership by any person of shares of the capital stock of a corporation (other than shares of a class listed on a designated stock exchange), or

      • (C) to be income derived from the provision of goods or services by a partnership or trust to or in support of a business carried on by

        • (I) a person who is related to the individual at any time in the year,

        • (II) a corporation of which a person who is related to the individual is a specified shareholder at any time in the year, or

        • (III) a professional corporation of which a person related to the individual is a shareholder at any time in the year. (revenu fractionné)

• Marginal note:Tax on split income

  (2) There shall be added to a specified individual’s tax payable under this Part for a taxation year 29% of the individual’s split income for the year.

• Marginal note:Tax payable by a specified individual

  (3) Notwithstanding any other provision of this Act, where an individual is a specified individual in relation to a taxation year, the individual’s tax payable under this Part for the year shall not be less than the amount by which

  • (a) the amount added under subsection (2) to the individual’s tax payable under this Part for the year

  exceeds

  • (b) the total of all amounts each of which is an amount that

    • (i) may be deducted under section 121 or 126 in computing the individual’s tax payable under this Part for the year, and

    • (ii) can reasonably be considered to be in respect of an amount included in computing the individual’s split income for the year.