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Budget Implementation Act, 2007 (S.C. 2007, c. 29)

Assented to 2007-06-22

  • 6. (1) The definition “eligible dividend” in subsection 89(1) of the Act is replaced by the following:

    “eligible dividend”

    « dividende déterminé »

    “eligible dividend” means

    • (a) a taxable dividend that is received by a person resident in Canada, paid after 2005 by a corporation resident in Canada and designated, as provided under subsection (14), to be an eligible dividend, and

    • (b) in respect of a person resident in Canada, an amount that is deemed by subsection 96(1.11) or 104(16) to be a taxable dividend that is received by the person;

  • (2) Subsection (1) is deemed to have come into force on October 31, 2006.

  • 7. (1) Section 96 of the Act is amended by adding the following after subsection (1.1):

    • Marginal note:Deemed dividend of SIFT partnership

      (1.11) If a SIFT partnership is liable to tax for a taxation year under Part IX.1,

      • (a) paragraph (1)(f) is to be read as if the expression “the amount of the income of the partnership for a taxation year from any source or from sources in a particular place” were read as “the amount, if any, by which the income of the partnership for a taxation year from any source or from sources in a particular place exceeds, in respect of each such source, the portion of the partnership’s taxable non-portfolio earnings for the taxation year that is applicable to that source”; and

      • (b) the partnership is deemed to have received a dividend in the taxation year from a taxable Canadian corporation equal to the amount by which the partnership’s taxable non-portfolio earnings for the taxation year exceeds the tax payable by the partnership for the taxation year under Part IX.1.

  • (2) Subsection (1) is deemed to have come into force on October 31, 2006.

  • 8. (1) The portion of subparagraph 104(6)(b)(i) of the Act before clause (A) is replaced by the following:

    • (i) such part (in this section referred to as the trust’s “adjusted distributions amount” for the taxation year) of the amount that, but for

  • (2) Paragraph 104(6)(b) of the Act is amended by striking out the word “and” at the end of subparagraph (ii.1), by adding the word “and” at the end of subparagraph (iii) and by adding the following after subparagraph (iii):

    • (iv) where the trust is a SIFT trust for the taxation year, the amount, if any, by which

      • (A) its adjusted distributions amount for the taxation year

      exceeds

      • (B) the amount, if any, by which

        • (I) the amount that would, if this Act were read without reference to this subsection, be its income for the taxation year

        exceeds

        • (II) its non-portfolio earnings for the taxation year.

  • (3) Section 104 of the Act is amended by adding the following after subsection (15):

    • Marginal note:SIFT deemed dividend

      (16) If an amount (in this subsection and section 122 referred to as the trust’s “non-deductible distributions amount” for the taxation year) is determined under subparagraph (6)(b)(iv) in respect of a SIFT trust for a taxation year

      • (a) each beneficiary under the SIFT trust to whom at any time in the taxation year an amount became payable by the trust is deemed to have received at that time a taxable dividend that was paid at that time by a taxable Canadian corporation;

      • (b) the amount of a dividend described in paragraph (a) as having been received by a beneficiary at any time in a taxation year is equal to the amount determined by the formula

        A/B × C

        where

        A 
        is the amount that became payable at that time by the SIFT trust to the beneficiary,
        B 
        is the total of all amounts, each of which became payable in the taxation year by the SIFT trust to a beneficiary under the SIFT trust, and
        C 
        is the SIFT trust’s non-deductible distributions amount for the taxation year;

      • (c) the amount of a dividend described in paragraph (a) in respect of a beneficiary under the SIFT trust is deemed for the purpose of subsection (13) not to be an amount payable to the beneficiary; and

      • (d) for the purposes of applying Part XIII in respect of each dividend described in paragraph (a), the SIFT trust is deemed to be a corporation resident in Canada that paid the dividend.

  • (4) Subsection 104(24) of the Act is replaced by the following:

    • Marginal note:Amount payable

      (24) For the purposes of subsections (6), (7), (13), (16) and (20) and subparagraph 53(2)(h)(i.1), an amount is deemed not to have become payable to a beneficiary in a taxation year unless it was paid in the year to the beneficiary or the beneficiary was entitled in the year to enforce payment of it.

  • (5) Subsections (1) to (4) are deemed to have come into force on October 31, 2006.