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

Act current to 2016-04-12 and last amended on 2015-08-01. Previous Versions

Marginal note:Proportional holdings in trust property
  •  (1) For the purposes of designated provisions, if at any time a specified taxpayer acquires, holds or disposes of a particular unit in a qualified trust and the qualified trust elects for any period that includes that time to have this subsection apply,

    • (a) the taxpayer shall be deemed not to acquire, hold or dispose of at that time, as the case may be, the particular unit;

    • (b) where the taxpayer holds the particular unit at that time, the taxpayer shall be deemed to hold at that time that proportion (referred to in this subsection as the “specified portion”) of each property (in this subsection referred to as a “relevant property”) held by the trust at that time that one (or, where the particular unit is a fraction of a whole unit, that fraction) is of the number of units of the trust outstanding at that time;

    • (c) [Repealed, 2005, c. 30, s. 18]

    • (d) where that time is the later of

      • (i) the time the trust acquires the relevant property, and

      • (ii) the time the taxpayer acquires the particular unit,

      the taxpayer shall be deemed to acquire the specified portion of a relevant property at that time;

    • (e) where that time is the time the specified portion of a relevant property is deemed by paragraph 259(1)(d) to have been acquired, the fair market value of the specified portion of the relevant property at that time shall be deemed to be the specified portion of the fair market value of the relevant property at the time of its acquisition by the trust;

    • (f) where that time is the time immediately before the time the trust disposes of a particular relevant property, the taxpayer shall be deemed to dispose of, immediately after that time, the specified portion of the particular relevant property for proceeds equal to the specified portion of the proceeds of disposition to the trust of the particular relevant property;

    • (g) where that time is the time immediately before the time the taxpayer disposes of the particular unit, the taxpayer shall be deemed to dispose of, immediately after that time, the specified portion of each relevant property for proceeds equal to the specified portion of the fair market value of that relevant property at that time; and

    • (h) where the taxpayer is deemed because of this subsection

      • (i) to have acquired a portion of a relevant property as a consequence of the acquisition of the particular unit by the taxpayer and the acquisition of the relevant property by the trust, and

      • (ii) subsequently to have disposed of the specified portion of the relevant property,

      the specified portion of the relevant property shall, for the purposes of determining the consequences under this Act of the disposition and without affecting the proceeds of disposition of the specified portion of the relevant property, be deemed to be the portion of the relevant property referred to in subparagraph 259(1)(h)(i).

  • (2) [Repealed, 2005, c. 30, s. 18]

  • Marginal note:Election

    (3) An election by a qualified trust under subsection (1) shall be made by the qualified trust filing a prescribed form with the Minister and shall apply for the period

    • (a) that begins on the later of

      • (i) the day that is 15 months before the day on which the election is filed, and

      • (ii) the day, if any, that is designated by the qualified trust in the election; and

    • (b) that ends on the earlier of

      • (i) the day on which the qualified trust files with the Minister a notice of revocation of the election, and

      • (ii) the day, if any, that is designated by the qualified trust in the notice of revocation and that is not before the day that is 15 months before the day on which the notice of revocation is filed.

  • Marginal note:Requirement to provide information

    (4) Where a qualified trust elects under subsection (1),

    • (a) it shall provide notification of the election

      • (i) within 30 days after making the election, to each person who held a unit in the qualified trust at any time in the period before the election was made and during which the election is applicable, and

      • (ii) at the time of acquisition, to each person who acquires a unit in the qualified trust at any time in the period after the election was made and during which the election is applicable; and

    • (b) if a person who holds a unit in the qualified trust at any time in the period during which the election is applicable makes a written request to the qualified trust for information that is necessary for the purpose of determining the consequences under this Act of the election for that person, the qualified trust shall provide to the person that information within 30 days after receiving the request.

  • Marginal note:Definitions

    (5) In this section,

    designated provisions

    dispositions désignées

    designated provisions means sections 146 and 146.1 to 146.4 and Parts X and XI to XI.1, as they apply in respect of investments that are not qualified investments for a trust, and Part X.2; (dispositions désignées)

    qualified corporation

    qualified corporation[Repealed, 2005, c. 30, s. 18]

    qualified trust

    fiducie admissible

    qualified trust at any time means a trust (other than a registered investment or a trust that is prescribed to be a small business investment trust) where

    • (a) each trustee of the trust at that time is a corporation that is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as a trustee or a person who is a trustee of a trust governed by a registered pension plan,

    • (b) all the interests of the beneficiaries under the trust at that time are described by reference to units of the trust all of which are at that time identical to each other,

    • (c) it has never before that time borrowed money except where the borrowing was for a term not exceeding 90 days and the borrowing was not part of a series of loans or other transactions and repayments, and

    • (d) it has never before that time accepted deposits. (fiducie admissible)

    specified taxpayer

    contribuable déterminé

    specified taxpayer means a taxpayer that is a registered investment or that is described in any of paragraphs 149(1)(r), (s), (u) to (u.2) and (x). (contribuable déterminé)

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 259;
  • 1994, c. 7, Sch. VIII, s. 142, c. 21, s. 115;
  • 2005, c. 30, s. 18;
  • 2008, c. 28, s. 37;
  • 2009, c. 2, s. 79;
  • 2011, c. 24, s. 75.
 
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