Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Act current to 2017-08-27 and last amended on 2017-07-01. Previous Versions

Marginal note:Tax payable by subscribers
  •  (1) Every subscriber under a registered education savings plan shall pay a tax under this Part in respect of each month equal to 1% of the amount, if any, by which

    • (a) the total of all amounts each of which is the subscriber’s gross cumulative excess at the end of the month in respect of an individual

    exceeds

    • (b) the total of all amounts each of which is the portion of such an excess that has been withdrawn from a registered education savings plan before the end of the month.

  • Marginal note:Waiver of tax

    (2) If a subscriber under a registered education savings plan would, but for this subsection, be required to pay a tax in respect of a month under subsection 204.91(1) in respect of an individual, the Minister may waive or cancel all or part of the tax 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;

    • (b) whether, as a consequence of one or more transactions or events to which subsection 204.9(4) or 204.9(5) applies, the tax is excessive; and

    • (c) the extent to which further contributions could be made into registered education savings plans in respect of the individual before the end of the month without causing additional tax to be payable under this Part if this Part were read without reference to this subsection.

  • Marginal note:Marriage or common-law partnership breakdown

    (3) If at any time an individual (in this subsection referred to as the “former subscriber”) ceases to be a subscriber under a registered education savings plan as a consequence of the settlement of rights arising out of, or on the breakdown of, the marriage or common-law partnership of the former subscriber and another individual (in this subsection referred to as the “current subscriber”) who is a subscriber under the plan immediately after that time, for the purpose of determining tax payable under this Part in respect of a month that ends after that time, each contribution made before that time into the plan by or on behalf of the former subscriber is deemed to have been made into the plan by the current subscriber and not by or on behalf of the former subscriber.

  • Marginal note:Deceased subscribers

    (4) For the purpose of applying this section where a subscriber has died, the subscriber’s estate is deemed to be the same person as, and a continuation of, the subscriber for each month that ends after the death.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1994, c. 7, Sch. II, s. 165;
  • 1998, c. 19, s. 58;
  • 2000, c. 12, s. 142.
Marginal note:Return and payment of tax

 Every person who is liable to pay tax under this Part in respect of a month in a 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, without notice or demand therefor;

  • (b) estimate in the return the amount of tax, if any, payable under this Part by the person in respect of each month in the year; and

  • (c) pay to the Receiver General the amount of tax, if any, payable by the person under this Part in respect of each month in the year.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1994, c. 7, Sch. II, s. 165.
Marginal note:Provisions applicable to Part

 Subsections 150(2) and 150(3), sections 152, 158 and 159, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part, with such modifications as the circumstances require.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1994, c. 7, Sch. II, s. 165.

PART X.5Payments Under Registered Education Savings Plans

Marginal note:Definitions
  •  (1) The definitions in subsection 146.1(1) apply for the purposes of this Part, except that the definition subscriber in that subsection shall be read without reference to paragraph (c).

  • Marginal note:Charging provision

    (2) Every person (other than a public primary caregiver that is exempt from tax under Part I) shall pay a tax under this Part for each taxation year equal to the amount determined by the formula

    (A + B - C) × D

    where

    A
    is the total of all amounts each of which is an accumulated income payment made at any time that is
    • (a) either

      • (i) under a registered education savings plan under which the person is a subscriber at that time, or

      • (ii) under a registered education savings plan under which there is no subscriber at that time, where the person has been a spouse or common-law partner of an individual who was a subscriber under the plan, and

    • (b) included in computing the person’s income under Part I for the year;

    B
    is the total of all amounts each of which is an accumulated income payment that is
    • (a) not included in the value of A in respect of the person for the year, and

    • (b) included in computing the person’s income under Part I for the year;

    C
    is the lesser of
    • (a) the lesser of the value of A in respect of the person for the year and the total of all amounts each of which is an amount deducted under subsection 146(5) or 146(5.1) in computing the person’s income under Part I for the year, and

    • (b) the amount, if any, by which $50,000 exceeds the total of all amounts each of which is an amount determined under paragraph (a) in respect of the person for a preceding taxation year; and

    D
    is
    • (a) where a tax, similar to the tax provided under this Part, is payable by the person for the year under a law of the province of Quebec, 12%, and

    • (b) in any other case, 20%.

  • Marginal note:Return and payment of tax

    (3) Every person who is liable to pay tax under this Part for a taxation year shall, on or before the person’s filing-due date for the year,

    • (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor;

    • (b) estimate in the return the amount of tax payable under this Part by the person for the year; and

    • (c) pay to the Receiver General the amount of tax payable under this Part by the person for the year.

  • Marginal note:Administrative rules

    (4) Subsections 150(2) and 150(3), sections 152, 155 to 156.1 and 158 to 167 and Division J of Part I apply with any modifications that the circumstances require.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1998, c. 19, s. 59;
  • 1999, c. 22, s. 72;
  • 2000, c. 12, s. 142;
  • 2013, c. 34, s. 338.

PART XITaxes in Respect of Registered Disability Savings Plans

Marginal note:Definitions
  •  (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 or because of the Canada Disability Savings Act or a designated provincial program as defined in subsection 146.4(1);

    • (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. (avantage)

    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. (remboursement admissible)

    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. (bénéfice)

    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. (placement admissible)

  • Marginal note:Definitions in subsection 146.4(1)

    (2) The definitions in subsection 146.4(1) apply in this Part.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 205;
  • 2005, c. 30, s. 14;
  • 2007, c. 35, s. 120;
  • 2010, c. 12, s. 20.
 
Date modified: