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

Act current to 2014-04-02 and last amended on 2014-01-01. Previous Versions

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.

    “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.

  • 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.