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

Act current to 2014-07-22 and last amended on 2014-06-27. Previous Versions

Marginal note:Share-purchase tax credit
  •  (1) There may be deducted from the tax otherwise payable under this Part by a taxpayer for a taxation year an amount not exceeding the total of

    • (a) the taxpayer’s share-purchase tax credit for the year, and

    • (b) the taxpayer’s unused share-purchase tax credit for the taxation year immediately following the year.

  • Marginal note:Persons exempt from tax

    (2) Where a taxpayer who was throughout a taxation year a person described in any of paragraphs 149(1)(e) to (y) files with the taxpayer’s return of income under this Part for the year a prescribed form containing prescribed information, the taxpayer shall be deemed to have paid, on the day on which the return is filed, an amount, on account of the taxpayer’s tax under this Part for the year, equal to the taxpayer’s share-purchase tax credit for the year.

  • Marginal note:Trust

    (3) Where, in a particular taxation year of a taxpayer who is a beneficiary under a trust, an amount is included in computing the share-purchase tax credit of the trust for its taxation year ending in that particular taxation year, the trust may, in its return of income for its taxation year ending in that particular taxation year, designate as attributable to the taxpayer such portion of that amount

    • (a) as may, having regard to all the circumstances (including the terms and conditions of the trust arrangement), reasonably be considered to be attributable to the taxpayer, and

    • (b) as was not designated by the trust in respect of any other beneficiary of that trust,

    and, where the trust so designates such a portion, an amount equal to that portion shall be

    • (c) added in computing the share-purchase tax credit of the taxpayer for the particular taxation year, and

    • (d) deducted in computing the share-purchase tax credit of the trust for its taxation year ending in the particular taxation year.

  • Marginal note:Exclusion of certain trusts

    (3.1) For the purposes of subsection 127.2(3), a trust does not include a trust that is

    • (a) governed by an employee benefit plan or a revoked deferred profit sharing plan; or

    • (b) exempt from tax under section 149.

  • Marginal note:Partnership

    (4) Where, in a taxation year of a taxpayer who is a member of a partnership, an amount is included in computing the share-purchase tax credit of the partnership for its fiscal period ending in that year, such portion of that amount as may reasonably be considered to be the taxpayer’s share thereof shall be

    • (a) added in computing the share-purchase tax credit of the taxpayer for that year; and

    • (b) deducted in computing the share-purchase tax credit of the partnership for that fiscal period.

  • Marginal note:Cooperative corporation

    (5) Where at any particular time in a taxation year a taxpayer that is a cooperative corporation (within the meaning assigned by subsection 136(2)) has, as required by subsection 135(3), deducted or withheld an amount from a payment made by it to any person pursuant to an allocation in proportion to patronage, the taxpayer may deduct from the amount otherwise required by subsection 135(3) to be remitted to the Receiver General, an amount not exceeding the amount, if any, by which

    • (a) the amount that would, but for this subsection, be its share-purchase tax credit for the taxation year in which it made the payment if that year had ended immediately before the particular time

    exceeds

    • (b) the total of all amounts each of which is the amount deducted by virtue of this subsection from any amount otherwise required to be remitted by subsection 135(3) in respect of payments made by it before the particular time and in the taxation year,

    and the amount, if any, so deducted from the amount otherwise required to be remitted by subsection 135(3) shall be

    • (c) deducted in computing the share-purchase tax credit of the taxpayer for the taxation year, and

    • (d) deemed to have been remitted by the taxpayer to the Receiver General on account of tax under this Part of the person to whom that payment was made.

  • Marginal note:Definitions

    (6) In this section,

    “share-purchase tax credit”

    « crédit d’impôt à l’achat d’actions »

    “share-purchase tax credit” of a taxpayer for a taxation year means the amount determined by the formula

    (A + B) - C

    where

    A 
    is the total of all amounts each of which is an amount designated by a corporation under subsection 192(4) in respect of a share acquired by the taxpayer in the year where the taxpayer is the first person, other than a broker or dealer in securities, to be a registered holder,
    B 
    is the total of all amounts each of which is an amount required by subsection 127.2(3) or (4) to be added in computing the taxpayer’s share-purchase tax credit for the year, and
    C 
    is the total of all amounts each of which is an amount required by subsection 127.2(3), (4) or (5) to be deducted in computing the taxpayer’s share-purchase tax credit for the year;

    “unused share-purchase tax credit”

    « partie inutilisée du crédit d’impôt à l’achat d’actions »

    “unused share-purchase tax credit” of a taxpayer for a taxation year means the amount determined by the formula

    A - (B + C)

    where

    A 
    is the taxpayer’s share-purchase tax credit for the year,
    B 
    is the taxpayer’s tax otherwise payable under this Part for the year, the amount deemed by subsection 127.2(2) to have been paid on account of the taxpayer’s tax payable under this Part for the year or, where Division E.1 is applicable to the taxpayer for the year, the amount, if any, by which the taxpayer’s tax otherwise payable under this Part for the year exceeds the taxpayer’s minimum amount for the year determined under section 127.51, as the case may be, and
    C 
    is the taxpayer’s refundable Part VII tax on hand at the end of the year.
  • Definition of “tax otherwise payable”

    (7) In this section, “tax otherwise payable” under this Part by a taxpayer means the amount that would, but for this section and section 120.1, be the tax payable under this Part by the taxpayer.

  • Marginal note:Deemed cost of acquisition

    (8) For the purposes of this Act, where, at any time in a taxation year, a taxpayer has acquired a share and is the first registered holder of the share, other than a broker or dealer in securities, and an amount is, at any time, designated by a corporation under subsection 192(4) in respect of the share, the following rules apply:

    • (a) the taxpayer shall be deemed to have acquired the share at a cost to the taxpayer equal to the amount by which

      • (i) its cost to the taxpayer as otherwise determined

      exceeds

      • (ii) the amount so designated in respect of the share; and

    • (b) where the amount determined under subparagraph 127.2(8)(a)(ii) exceeds the amount determined under subparagraph 127.2(8)(a)(i), the excess shall

      • (i) where the share is a capital property to the taxpayer, be deemed to be a capital gain of the taxpayer for the year from the disposition of that property, and

      • (ii) in any other case, be included in computing the income of the taxpayer for the year,

      and the cost to the taxpayer of the share shall be deemed to be nil.

  • Marginal note:Partnership

    (9) For the purposes of this section and subsection 193(5), a partnership shall be deemed to be a person and its taxation year shall be deemed to be its fiscal period.

  • Marginal note:Election re first holder

    (10) Where a share of a public corporation has been lawfully distributed to the public in accordance with a prospectus, registration statement or similar document filed with a public authority in Canada pursuant to and in accordance with the law of Canada or of any province, and, where required by law, accepted for filing by such a public authority, the corporation, if it has designated an amount under subsection 192(4) in respect of the share, may, in the prescribed form required to be filed under that subsection, elect that, for the purposes of this section, the first person, other than a broker or dealer in securities, to have acquired the share (and no other person) shall be considered to be the first person to be a registered holder of the share.

  • Marginal note:Calculation of consideration

    (11) For greater certainty,

    • (a) for the purposes of this section and Part VII, the amount of consideration for which a share is acquired and issued includes the amount of any consideration for the designation under subsection 192(4) in respect of the share; and

    • (b) the amount received by a corporation as consideration for a designation under subsection 192(4) in respect of a share issued by it shall not be included in computing its income.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1984, c. 1, s. 73, c. 45, s. 45;
  • 1988, c. 55, s. 108.