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

Act current to 2017-11-06 and last amended on 2017-07-01. Previous Versions

Marginal note:Tax payable where inadequate consideration
  •  (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.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 206;
  • 1994, c. 7, Sch. II, s. 166, Sch. VIII, s. 120, c. 21, s. 93;
  • 1998, c. 19, s. 210;
  • 2000, c. 14, s. 41, c. 19, s. 60;
  • 2001, c. 17, ss. 169, 247;
  • 2005, c. 30, s. 14;
  • 2007, c. 35, s. 120.
Marginal note:Tax payable on non-qualified investment
  •  (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.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 206.1;
  • 1994, c. 7, Sch. II, s. 167;
  • 1998, c. 19, s. 211;
  • 2005, c. 30, s. 14;
  • 2007, c. 35, s. 120.
Marginal note:Tax payable where advantage extended
  •  (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.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2007, c. 35, s. 120.
Marginal note:Tax payable on use of property as security
  •  (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.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2007, c. 35, s. 120.
Marginal note:Waiver of liability

 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.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 2007, c. 35, s. 120.
Marginal note:Return and payment of tax
  •  (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 sending 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 sending the notice of assessment if an application for it has been made in writing by the person within three years after the sending 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.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 207;
  • 2005, c. 30, s. 14;
  • 2007, c. 35, s. 120;
  • 2010, c. 25, s. 56.
 
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