Budget and Economic Statement Implementation Act, 2007 (S.C. 2007, c. 35)
Full Document:
Assented to 2007-12-14
116. Subsection 149(1) of the Act is amended by adding the following after paragraph (u):
Marginal note:Trusts under registered disability savings plans
(u.1) a trust governed by a registered disability savings plan to the extent provided by section 146.4;
117. Subsection 153(1) of the Act is amended by adding the following after paragraph (h):
(i) a payment from a registered disability savings plan,
118. The Act is amended by adding the following after section 160.2:
Marginal note:Joint and several liability — registered disability savings plan
160.21 (1) Where, in computing income for a taxation year, a taxpayer is required to include an amount in respect of a disability assistance payment (as defined in subsection 146.4(1)) that is deemed by subsection 146.4(10) to have been made at any particular time from a registered disability savings plan, the taxpayer and each holder (as defined in subsection 146.4(1)) of the plan immediately after the particular time are jointly and severally, or solidarily, liable to pay the part of the taxpayer’s tax under this Part for that taxation year that is equal to the amount, if any, determined by the formula
A - B
where
- A
- is the amount of the taxpayer’s tax under this Part for that taxation year; and
- B
- is the amount that would be the taxpayer’s tax under this Part for that taxation year if no disability assistance payment were deemed by subsection 146.4(10) to have been paid from the plan at the particular time.
Marginal note:No limitation on liability
(2) Subsection (1) limits neither
(a) the liability of the taxpayer referred to in that subsection under any other provision of this Act, nor
(b) the liability of any holder referred to in that subsection for the interest that the holder is liable to pay under this Act on an assessment in respect of the amount that the holder is liable to pay because of that subsection.
Marginal note:Rules applicable — registered disability savings plans
(3) Where a holder (as defined in subsection 146.4(1)) of a registered disability savings plan has, because of subsection (1), become jointly and severally, or solidarily, liable with a taxpayer in respect of part or all of a liability of the taxpayer under this Act, the following rules apply:
(a) a payment by the holder on account of the holder’s liability shall to the extent of the payment discharge the holder’s liability, but
(b) a payment by the taxpayer on account of the taxpayer’s liability only discharges the holder’s liability to the extent that the payment operates to reduce the taxpayer’s liability to an amount less than the amount in respect of which the holder was, by subsection (1), made liable.
Marginal note:Assessment
(4) The Minister may at any time assess a taxpayer in respect of any amount payable because of this section, and the provisions of this Division (including, for greater certainty, the provisions in respect of interest payable) apply, with any modifications that the circumstances require, in respect of an assessment made under this section as though it had been made under section 152 in respect of taxes payable under this Part.
119. The definition “adjusted income” in subsection 180.2(1) of the Act is replaced by the following:
“adjusted income”
« revenu modifié »
“adjusted income” of an individual for a taxation year means the amount that would be the individual’s income under Part I for the year if no amount were included under paragraph 56(1)(q.1) or subsection 56(6) or in respect of a gain from a disposition of property to which section 79 applies in computing that income and if no amount were deductible under paragraph 60(w), (y) or (z) in computing that income;
120. The Act is amended by adding the following after section 204.94:
PART XITAXES IN RESPECT OF REGISTERED DISABILITY SAVINGS PLANS
Marginal note:Definitions
205. (1) The following definitions apply in this Part.
“advantage”
« avantage »
“advantage”, in relation to a registered disability savings plan, means any benefit or loan that is conditional in any way on the existence of the plan other than
(a) a disability assistance payment;
(b) a contribution made by, or with the written consent of, a holder of the plan;
(c) a transfer in accordance with subsection 146.4(8);
(d) an amount paid under the Canada Disability Savings Act;
(e) a benefit derived from the provision of administrative or investment services in respect of the plan; or
(f) a loan
(i) made in the ordinary course of the lender’s ordinary business of lending money if, at the time the loan was made, bona fide arrangements were made for repayment of the loan within a reasonable time, and
(ii) whose sole purpose was to enable a person to make a contribution to the plan.
“allowable refund”
« remboursement admissible »
“allowable refund” of a person for a calendar year means the total of all amounts each of which is a refund to which the person is entitled under subsection 206.1(4) for the year.
“benefit”
« bénéfice »
“benefit”, in relation to a registered disability savings plan, includes any payment or allocation of an amount to the plan that is represented to be a return on investment in respect of property held by the plan trust, but which cannot reasonably be considered, having regard to all the circumstances, to be on terms and conditions that would apply to a similar transaction in an open market between parties dealing with each other at arm’s length and acting prudently, knowledgeably and willingly.
“qualified investment”
« placement admissible »
“qualified investment” for a trust governed by a registered disability savings plan 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 registered disability savings plan” and if that definition were read without reference to the words “with the exception of excluded property in relation to the trust”;
(b) a contract for an annuity issued by a licensed annuities provider where
(i) the trust is the only person who, disregarding any subsequent transfer of the contract by the trust, is or may become entitled to any annuity payments under the contract, and
(ii) the holder of the contract has a right to surrender the contract at any time for an amount that would, if reasonable sales and administration charges were ignored, approximate the value of funds that could otherwise be applied to fund future periodic payments under the contract;
(c) a contract for an annuity issued by a licensed annuities provider where
(i) annual or more frequent periodic payments are or may be made under the contract to the holder of the contract,
(ii) the trust is the only person who, disregarding any subsequent transfer of the contract by the trust, is or may become entitled to any annuity payments under the contract,
(iii) neither the time nor the amount of any payment under the contract may vary because of the length of any life, other than the life of the beneficiary under the plan,
(iv) the day on which the periodic payments began or are to begin is not later than the end of the later of
(A) the year in which the beneficiary under the plan attains the age of 60 years, and
(B) the year following the year in which the contract was acquired by the trust,
(v) the periodic payments are payable for the life of the beneficiary under the plan and either there is no guaranteed period under the contract or there is a guaranteed period that does not exceed 15 years,
(vi) the periodic payments
(A) are equal, or
(B) are not equal solely because of one or more adjustments that would, if the contract were an annuity under a retirement savings plan, be in accordance with subparagraphs 146(3)(b)(iii) to (v) or that arise because of a uniform reduction in the entitlement to the periodic payments as a consequence of a partial surrender of rights to the periodic payments, and
(vii) the contract requires that, in the event the plan must be terminated in accordance with paragraph 146.4(4)(p), any amounts that would otherwise be payable after the termination be commuted into a single payment; and
(d) a prescribed investment.
Marginal note:Definitions in subsection 146.4(1)
(2) The definitions in subsection 146.4(1) apply in this Part.
Marginal note:Tax payable where inadequate consideration
206. (1) A tax is payable under this Part for a calendar year in connection with a registered disability savings plan if, in the year, a trust governed by the plan
(a) disposes of property for consideration less than the fair market value of the property at the time of the disposition, or for no consideration; or
(b) acquires property for consideration greater than the fair market value of the property at the time of the acquisition.
Marginal note:Amount of tax payable
(2) The amount of tax payable in respect of each disposition or acquisition described in subsection (1) is
(a) the amount by which the fair market value differs from the consideration; or
(b) if there is no consideration, the amount of the fair market value.
Marginal note:Liability for tax
(3) Each person who is a holder of a registered disability savings plan at the time that a tax is imposed under subsection (1) in connection with the plan is jointly and severally, or solidarily, liable to pay the tax.
Marginal note:Payment of amount collected to RDSP
(4) Where a tax has been imposed under subsection (1) in connection with a registered disability savings plan of a beneficiary, the Minister may pay all or part of any amount collected in respect of the tax to a trust governed by a registered disability savings plan of the beneficiary (referred to in this subsection as the “current plan”) if
(a) it is just and equitable to do so having regard to all circumstances; and
(b) the Minister is satisfied that neither the beneficiary nor any existing holder of the current plan was involved in the transaction that gave rise to the tax.
Marginal note:Deemed not to be a contribution
(5) A payment under subsection (4) is deemed not to be a contribution to a registered disability savings plan for the purposes of section 146.4.
Marginal note:Tax payable on non-qualified investment
206.1 (1) A tax is payable under this Part for a calendar year in connection with a registered disability savings plan if, in the year,
(a) the trust governed by the plan acquires property that is not a qualified investment for the trust; or
(b) property held by the trust governed by the plan ceases to be a qualified investment for the trust.
Marginal note:Amount of tax payable
(2) The amount of tax payable,
(a) in respect of each property described in paragraph (1)(a), is 50% of the fair market value of the property at the time it was acquired by the trust; and
(b) in respect of each property described in paragraph (1)(b), is 50% of the fair market value of the property at the time immediately before the time it ceased to be a qualified investment for the trust.
Marginal note:Liability for tax
(3) Each person who is a holder of a registered disability savings plan at the time that a tax is imposed under subsection (1) in connection with the plan is jointly and severally, or solidarily, liable to pay the tax.
Marginal note:Refund of tax on disposition of non-qualified investment
(4) Where in a calendar year a trust governed by a registered disability savings plan disposes of a property in respect of which a tax is imposed under subsection (1), the person or persons who are liable to pay the tax are entitled to a refund for the year of an amount equal to
(a) except where paragraph (b) applies, the lesser of
(i) the amount of the tax so imposed, and
(ii) the proceeds of disposition of the property; and
(b) nil,
(i) if it is reasonable to expect that any of those persons knew or ought to have known at the time the property was acquired by the trust that it was not, or would cease to be, a qualified investment for the trust, or
(ii) if the property is not disposed of by the trust before the end of the calendar year following the calendar year in which the tax arose, or any later time that the Minister considers reasonable in the circumstances.
Marginal note:Apportionment of refund
(5) Where more than one person is entitled to a refund under subsection (4) for a calendar year in respect of the disposition of a property, the total of all amounts so refundable shall not exceed the amount that would be so refundable for the year to any one of those persons in respect of that disposition if that person were the only person entitled to a refund for the year under that subsection in respect of the disposition. If the persons cannot agree as to what portion of the refund each can so claim, the Minister may fix the portions.
Marginal note:Deemed disposition and reacquisition
(6) For the purposes of this Act, where at any time property held by a plan trust in respect of which a tax was imposed under subsection (1) subsequently becomes a qualified investment for the trust, the trust is deemed to have disposed of the property at that time for proceeds of disposition equal to its fair market value at that time and to have reacquired it immediately after that time at a cost equal to that fair market value.
Marginal note:Tax payable where advantage extended
206.2 (1) A tax is payable under this Part for a calendar year in connection with a registered disability savings plan if, in the year, an advantage in relation to the plan is extended to a person who is, or who does not deal at arm’s length with, a beneficiary under, or a holder of, the plan.
Marginal note:Amount of tax payable
(2) The amount of tax payable in respect of an advantage described in subsection (1) is
(a) in the case of a benefit, the fair market value of the benefit; and
(b) in the case of a loan, the amount of the loan.
Marginal note:Liability for tax
(3) Each person who is a holder of a registered disability savings plan at the time that a tax is imposed under subsection (1) in connection with the plan is jointly and severally, or solidarily, liable to pay the tax. If, however, the advantage is extended by the issuer of the plan or by a person not dealing at arm’s length with the issuer, the issuer is liable to pay the tax and not the holders.
Marginal note:Tax payable on use of property as security
206.3 (1) Every issuer of a registered disability savings plan shall pay a tax under this Part for a calendar year if, in the year, with the consent or knowledge of the issuer, a trust governed by the plan uses or permits to be used any property held by the trust as security for indebtedness of any kind.
Marginal note:Amount of tax payable
(2) The amount of tax payable in respect of each property described in subsection (1) is equal to the fair market value of the property at the time the property commenced to be used as security.
Marginal note:Waiver of liability
206.4 If a person would otherwise be liable to pay a tax under this Part for a calendar year, the Minister may waive or cancel all or part of the liability where it is just and equitable to do so having regard to all the circumstances, including
(a) whether the tax arose as a consequence of reasonable error; and
(b) the extent to which the transaction which gave rise to the tax also gave rise to another tax under this Part.
Marginal note:Return and payment of tax
207. (1) Every person who is liable to pay tax under this Part for a calendar year shall within 90 days after the end of the year
(a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information including
(i) an estimate of the amount of tax payable under this Part by the person for the year, and
(ii) an estimate of the amount of any refund to which the person is entitled under this Part for the year; and
(b) pay to the Receiver General the amount, if any, by which the amount of the person’s tax payable under this Part for the year exceeds the person’s allowable refund for the year.
Marginal note:Refund
(2) Where a person has filed a return under this Part for a calendar year within three years after the end of the year, the Minister
(a) may, on mailing the notice of assessment for the year, refund without application any allowable refund of the person for the year, to the extent that it was not applied against the person’s tax payable under paragraph (1)(b); and
(b) shall, with all due dispatch, make the refund referred to in paragraph (a) after mailing the notice of assessment if an application for it has been made in writing by the person within three years after the mailing of an original notice of assessment for the year.
Marginal note:Multiple holders
(3) Where two or more holders of a registered disability savings plan are jointly and severally, or solidarily, liable with each other to pay a tax under this Part for a calendar year in connection with the plan,
(a) a payment by any of the holders on account of that tax liability shall to the extent of the payment discharge the joint liability; and
(b) a return filed by one of the holders as required by this Part for the year is deemed to have been filed by each other holder in respect of the joint liability to which the return relates.
Marginal note:Provisions applicable to Part
(4) Subsections 150(2) and (3), sections 152 and 158 to 167 and Division J of Part I apply to this Part with any modifications that the circumstances require.
- Date modified: