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Income Tax Regulations (C.R.C., c. 945)

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Regulations are current to 2020-07-28 and last amended on 2020-07-27. Previous Versions

PART XCFinancial Institutions — Prescribed Entities and Properties (continued)

Prescribed Property not Mark-to-Market Property

  •  (1) For the purposes of paragraph (e) of the definition excluded property in subsection 142.2(1) of the Act, and of subparagraph 142.6(4)(a)(ii) of the Act, a debt obligation held by a bank is a prescribed property of the bank if the obligation is

    • (a) an exposure to a designated country (within the meaning assigned by section 8006);

    • (b) a United Mexican States Collateralized Par Bond due 2019; or

    • (c) a United Mexican States Collateralized Discount Bond due 2019.

  • (2) For the purpose of paragraph (e) of the definition excluded property in subsection 142.2(1) of the Act, a share is a prescribed property of a taxpayer for a taxation year if

    • (a) the share is a lending asset of the taxpayer in the year; or

    • (b) the share was, immediately after its issuance, a share described in paragraph (e) of the definition term preferred share in subsection 248(1) of the Act, and the share would, at any time in the year, be a term preferred share if

      • (i) that definition were read without ref- erence to the portion following paragraph (b), and

      • (ii) where the share was issued or acquired on or before June 28, 1982, it were issued or acquired after that day.

  • (3) For the purpose of paragraph (e) of the definition excluded property in subsection 142.2(1) of the Act, a share of the capital stock of a corporation that is held by a credit union is a prescribed property of the credit union for a taxation year if, throughout the period (referred to in this subsection as the “holding period”) in that taxation year during which the credit union holds the share

    • (a) the corporation is a credit union; or

    • (b) the following conditions are satisfied:

      • (i) credit unions hold shares of the corporation that

        • (A) give those credit unions at least 50% of the votes that could be cast under all circumstances at an annual meeting of shareholders of the corporation, and

        • (B) have a fair market value of at least 50% of the fair market value of all the issued shares of the corporation,

      • (ii) the corporation is not controlled, directly or indirectly in any manner whatever, by any person that is not a credit union, and

      • (iii) the corporation would not be controlled by a person that is not a credit union if each share of the corporation that is not owned at any time in the holding period by a credit union were owned, at that time, by the person.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2009, c. 2, s. 118

Prescribed Payment Card Corporation Share not Mark-to-Market Property

 For the purpose of paragraph (b) of the definition excluded property in subsection 142.2(1) of the Act, a prescribed payment card corporation share of a taxpayer at any time means a share of the capital stock of a particular corporation if, at that time,

  • (a) the particular corporation is any one of the following

    • (i) MasterCard International Incorporated,

    • (ii) MasterCard Incorporated, or

    • (iii) Visa Inc.; and

  • (b) the share

    • (i) is of a class of shares that is not listed on a stock exchange,

    • (ii) is not convertible into or exchangeable for a share of the class of the capital stock of a corporation that is listed on a stock exchange, and

    • (iii) was issued by the particular corporation to the taxpayer or to a person related to the taxpayer.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2009, c. 2, s. 118

 [Repealed, 2009, c. 2, s. 118]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2009, c. 2, s. 118

Significant Interest in a Corporation

 For the purpose of paragraph 142.2(3)(c) of the Act, a share described in paragraph 9002(2)(b) is prescribed in respect of all taxpayers.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2009, c. 2, s. 118

Financing Arrangement not a Specified Debt Obligation

 For the purpose of paragraph (c) of the definition specified debt obligation in subsection 142.2(1) of the Act, a property is a prescribed property throughout a taxation year if

  • (a) the property is a direct financing lease, or any other financing arrangement, of a taxpayer that is reported as a loan in the taxpayer’s financial statements for the year prepared in accordance with generally accepted accounting principles; and

  • (b) in computing the taxpayer’s income for the year, an amount is deductible under paragraph 20(1)(a) of the Act in respect of the property that is the subject of the arrangement.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/99-91, s. 8
  • 2009, c. 2, s. 118

Prescribed Non-reporting Financial Institution

 For the purposes of the definition non-reporting financial institution in subsection 270(1) of the Act, the following entities are prescribed:

  • (a) a labour-sponsored venture capital corporation as prescribed in section 6701;

  • (b) a registered retirement savings plan;

  • (c) a registered retirement income fund;

  • (d) a pooled registered pension plan;

  • (e) a deferred profit sharing plan;

  • (f) a registered disability savings plan;

  • (g) a registered education savings plan;

  • (h) a registered pension plan;

  • (i) a trust governed by a registered pension plan;

  • (j) a trust described in paragraph 149(1)(o.4) of the Act, if all of the interests in the trust as a beneficiary are held by one or more registered pension plans;

  • (k) a corporation described in clause 149(1)(o.1)(i)(A) or subparagraph 149(1)(o.1)(ii) or (o.2)(i) of the Act;

  • (l) a corporation described in any of subparagraphs 149(1)(o.2)(ii) to (iii) of the Act, if all of the shares of the corporation are held by

    • (i) one or more registered pension plans or trusts governed by registered pension plans,

    • (ii) one or more trusts described in paragraph (j), or

    • (iii) one or more corporations described in this paragraph or paragraph (k);

  • (m) a trust, if all of the interests in the trust as a beneficiary are held by one or more plans, trusts or corporations described in paragraph (i), (k) or (l);

  • (n) a central cooperative credit society, as defined in section 2 of the Cooperative Credit Associations Act and whose accounts are maintained for member financial institutions; and

  • (o) a TFSA.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2016, c. 12, s. 83

Prescribed Excluded Accounts

 For the purposes of the definition excluded account in subsection 270(1) of the Act, the following accounts are prescribed:

  • (a) a registered retirement savings plan;

  • (b) a registered retirement income fund;

  • (c) a pooled registered pension plans;

  • (d) a registered pension plan;

  • (e) a registered disability savings plan;

  • (f) a registered education savings plan;

  • (g) a deferred profit sharing plan;

  • (h) a net income stabilization account, including a NISA Fund No. 2;

  • (i) an eligible funeral arrangement;

  • (j) a dormant account if the balance or value of the account does not exceed 1,000 USD; and

  • (k) a TFSA.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2016, c. 12, s. 83
 
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