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

Act current to 2014-11-25 and last amended on 2014-11-01. Previous Versions

Marginal note:Definitions
  •  (1) The definitions in this subsection apply in this section.

    “amateur athlete”

    « athlète amateur »

    “amateur athlete” at any time means an individual (other than a trust) who is, at that time,

    • (a) a member of a registered Canadian amateur athletic association;

    • (b) eligible to compete, in an international sporting event sanctioned by an international sports federation, as a Canadian national team member; and

    • (c) not a professional athlete.

    “professional athlete”

    « athlète professionnel »

    “professional athlete” means an individual who receives income that is compensation for, or is otherwise attributable to, the individual’s activities as a player or athlete in a professional sport.

    “qualifying performance income”

    « revenu de performance admissible »

    “qualifying performance income” of an individual means income that

    • (a) is received by the individual in a taxation year in which

      • (i) the individual was, at any time, an amateur athlete, and

      • (ii) the individual was not, at any time, a professional athlete;

    • (b) may reasonably be considered to be in connection with the individual’s participation as an amateur athlete in one or more international sporting events referred to in the definition “amateur athlete”; and

    • (c) is endorsement income, prize money, or income from public appearances or speeches.

    “third party”

    « tiers »

    “third party” in respect of an arrangement described in paragraph (1.1)(b) means a person who deals at arm’s length with the amateur athlete in respect of the arrangement.

  • Marginal note:Where subsection (1.2) applies

    (1.1) Subsection (1.2) applies where, at any time,

    • (a) a national sport organization that is a registered Canadian amateur athletic association receives an amount for the benefit of an individual under an arrangement made under rules of an international sport federation that require amounts to be held, controlled and administered by the organization in order to preserve the eligibility of the individual to compete in a sporting event sanctioned by the federation; or

    • (b) an individual enters into an arrangement that

      • (i) is an account with an issuer described in paragraph (b) of the definition “qualifying arrangement” in subsection 146.2(1), or that would be so described if that definition applied at that time,

      • (ii) provides that no amount may be deposited, credited or added to the account, other than an amount that is qualifying performance income of the individual or that is interest or other income in respect of the property deposited, credited or added to the account,

      • (iii) provides that a third party is a mandatory signatory on any payment from the account, and

      • (iv) is not a registered retirement savings plan or a TFSA.

  • Marginal note:Amateur athletes’ reserve funds

    (1.2) If this subsection applies in respect of an arrangement referred to in subsection (1.1),

    • (a) an inter vivos trust (in this section referred to as the “amateur athlete trust”) is deemed

      • (i) to be created on the day on which the first amount referred to in paragraph (1.1)(a) or (b) is received by the sport organization or by the issuer, as the case may be, in respect of the arrangement, and

      • (ii) to exist until subsection (3) or (4) applies in respect of the trust;

    • (b) all property held under the arrangement is deemed to be the property of the amateur athlete trust and not property of any other person;

    • (c) if, at any time, the sport organization or the issuer, as the case may be, receives an amount under the arrangement and the amount would, in the absence of this subsection, be included in computing the income of the individual in respect of the arrangement for the taxation year that includes that time, the amount is deemed to be income of the amateur athlete trust for that taxation year and not to be income of the individual;

    • (d) if, at any time, the sport organization or the issuer, as the case may be, pays or transfers an amount under the arrangement to or for the benefit of the individual, the amount is deemed to be an amount distributed at that time to the individual by the amateur athlete trust;

    • (e) the individual is deemed to be the beneficiary under the amateur athlete trust;

    • (f) the sport organization or the third party, as the case may be, in respect of the arrangement is deemed to be the trustee of the amateur athlete trust; and

    • (g) no tax is payable under this Part by the amateur athlete trust on its taxable income for any taxation year.

  • Marginal note:Amounts included in beneficiary’s income

    (2) In computing the income for a taxation year of the beneficiary under an amateur athlete trust, there shall be included the total of all amounts distributed in the year to the beneficiary by the trust.

  • Marginal note:Termination of amateur athlete trust

    (3) Where an amateur athlete trust holds property on behalf of a beneficiary who has not competed in an international sporting event as a Canadian national team member for a period of 8 years that ends in a particular taxation year and that begins in the year that is the later of

    • (a) where the beneficiary has competed in such an event, the year in which the beneficiary last so competed, and

    • (b) the year in which the trust was created,

    the trust shall be deemed to have distributed, at the end of the particular taxation year to the beneficiary, an amount equal to

    • (c) where the trust is liable to pay tax under Part XII.2 in respect of the particular year, 64% of the fair market value of all property held by it at that time, and

    • (d) in any other case, the fair market value of all property held by it at that time.

  • Marginal note:Death of beneficiary

    (4) Where an amateur athlete trust holds property on behalf of a beneficiary who dies in a year, the trust shall be deemed to have distributed, immediately before the death, to the beneficiary, an amount equal to

    • (a) where the trust is liable to pay tax under Part XII.2 in respect of the year, 64% of the fair market value of all property held by it at that time; and

    • (b) in any other case, the fair market value of all property held by it at that time.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1994, c. 7, Sch. VIII, s. 81;
  • 2009, c. 2, s. 50.