Sustaining Canada’s Economic Recovery Act (S.C. 2010, c. 25)
Full Document:
Assented to 2010-12-15
13. The portion of subsection 70(2) of the Act before paragraph (a) is replaced by the following:
Marginal note:Amounts receivable
(2) If a taxpayer who has died had at the time of death rights or things (other than any capital property or any amount included in computing the taxpayer’s income by virtue of subsection (1)), the amount of which when realized or disposed of would have been included in computing the taxpayer’s income, the value of the rights or things at the time of death shall be included in computing the taxpayer’s income for the taxation year in which the taxpayer died, unless the taxpayer’s legal representative has, not later than the later of the day that is one year after the date of death of the taxpayer and the day that is 90 days after the sending of any notice of assessment in respect of the tax of the taxpayer for the year of death, elected otherwise, in which case the legal representative shall file a separate return of income for the year under this Part and pay the tax for the year under this Part as if
14. (1) Paragraph 75(3)(b) of the Act is replaced by the following:
(b) by an employee life and health trust, an employee trust, a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)), a trust described in paragraph (a.1) of the definition “trust” in subsection 108(1), or a trust described in paragraph 149(1)(y);
(2) Subsection (1) applies after 2009.
15. (1) Paragraph 87(2)(j.3) of the Act is replaced by the following:
Marginal note:Employee benefit plans, etc.
(j.3) for the purposes of paragraphs 12(1)(n.1) to (n.3) and 20(1)(r), (s), (oo) and (pp), section 32.1, paragraph 104(13)(b), subsections 144.1(4) to (7) and Part X1.3, the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation;
(2) Subsection (1) applies after 2009.
16. (1) Subsection 104(6) of the Act is amended by striking out “and” at the end of paragraph (a.3) and by adding the following after that paragraph:
(a.4) in the case of an employee life and health trust, an amount that became payable by the trust in the year as a designated employee benefit (as defined in subsection 144.1(1)); and
(2) Subsection (1) applies after 2009.
17. (1) The portion of section 107.1 of the Act before subparagraph (a)(i) is replaced by the following:
Marginal note:Distribution by certain employment-related trusts
107.1 If at any time any property of an employee life and health trust, an employee trust, a trust governed by an employee benefit plan or a trust described in paragraph (a.1) of the definition “trust” in subsection 108(1) has been distributed by the trust to a taxpayer who was a beneficiary under the trust in satisfaction of all or any part of the taxpayer’s interest in the trust, the following rules apply:
(a) in the case of an employee life and health trust, an employee trust or a trust described in paragraph (a.1) of the definition “trust” in subsection 108(1),
(2) Subsection (1) applies after 2009.
18. (1) Paragraph 107.4(1)(j) of the Act is replaced by the following:
(j) if the contributor is an amateur athlete trust, a cemetery care trust, an employee life and health trust, an employee trust, an inter vivos trust deemed by subsection 143(1) to exist in respect of a congregation that is a constituent part of a religious organization, a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)), a trust described in paragraph 149(1)(o.4) or a trust governed by an eligible funeral arrangement, an employees profit sharing plan, a registered disability savings plan, a registered education savings plan, a registered supplementary unemployment benefit plan or a TFSA, the particular trust is the same type of trust.
(2) Subsection (1) applies after 2009.
19. (1) Paragraph (a) of the definition “trust” in subsection 108(1) of the Act is replaced by the following:
(a) an amateur athlete trust, an employee life and health trust, an employee trust, a trust described in paragraph 149(1)(o.4) or a trust governed by a deferred profit sharing plan, an employee benefit plan, an employees profit sharing plan, a foreign retirement arrangement, a registered disability savings plan, a registered education savings plan, a registered pension plan, a registered retirement income fund, a registered retirement savings plan, a registered supplementary unemployment benefit plan or a TFSA,
(2) Subsection (1) applies after 2009.
20. (1) Subparagraph 110(1)(d)(i) of the Act is replaced by the following:
(i) the security was acquired under the agreement by the taxpayer or a person not dealing at arm’s length with the taxpayer in circumstances described in paragraph 7(1)(c),
(i.1) the security
(A) is a prescribed share at the time of its sale or issue, as the case may be,
(B) would have been a prescribed share if it were issued or sold to the taxpayer at the time the taxpayer disposed of rights under the agreement,
(C) would have been a unit of a mutual fund trust at the time of its sale or issue if those units issued by the trust that were not identical to the security had not been issued, or
(D) would have been a unit of a mutual fund trust if
(I) it were issued or sold to the taxpayer at the time the taxpayer disposed of rights under the agreement, and
(II) those units issued by the trust that were not identical to the security had not been issued,
(2) Section 110 of the Act is amended by adding the following after subsection (1):
Marginal note:Election by particular qualifying person
(1.1) For the purpose of computing the taxable income of a taxpayer for a taxation year, paragraph (1)(d) shall be read without reference to its subparagraph (i) in respect of all rights granted to the taxpayer under an agreement to sell or issue securities referred to in subsection 7(1) if
(a) the particular qualifying person elects in prescribed form that neither the particular qualifying person nor any person not dealing at arm’s length with the particular qualifying person will deduct in computing its income for a taxation year any amount (other than a designated amount described in subsection (1.2)) in respect of a payment to or for the benefit of a taxpayer for the taxpayer’s transfer or disposition of rights under the agreement;
(b) the particular qualifying person files the election with the Minister;
(c) the particular qualifying person provides the taxpayer with evidence in writing of the election; and
(d) the taxpayer files the evidence with the Minister with the taxpayer’s return of income for the year in which a deduction under paragraph (1)(d) is claimed.
Marginal note:Designated amount
(1.2) For the purposes of subsection (1.1), an amount is a designated amount if the following conditions are met:
(a) the amount would otherwise be deductible in computing the income of the particular qualifying person in the absence of subsection (1.1);
(b) the amount is payable to a person
(i) with whom the particular qualifying person deals at arm’s length, and
(ii) who is neither an employee of the particular qualifying person nor of any person not dealing at arm’s length with the particular qualifying person; and
(c) the amount is payable in respect of an arrangement entered into for the purpose of managing the particular qualifying person’s financial risk associated with a potential increase in value of the securities under the agreement described in subsection (1.1).
(3) Subsections (1) and (2) apply in respect of acquisitions of securities and transfers or dispositions of rights occurring after 4:00 p.m. Eastern Standard Time, March 4, 2010.
21. (1) The portion of paragraph 111(4)(e) of the Act before subparagraph (i) is replaced by the following:
(e) each capital property owned by the corporation immediately before that time (other than a property in respect of which an amount would, but for this paragraph, be required by paragraph (c) to be deducted in computing its adjusted cost base to the corporation or a depreciable property of a prescribed class to which, but for this paragraph, subsection (5.1) would apply) as is designated by the corporation in its return of income under this Part for the taxation year that ended immediately before that time or in a prescribed form filed with the Minister on or before the day that is 90 days after the day on which a notice of assessment of tax payable for the year or notification that no tax is payable for the year is sent to the corporation, is deemed to have been disposed of by the corporation immediately before the time that is immediately before that time for proceeds of disposition equal to the lesser of
(2) Section 111 of the Act is amended by adding the following after subsection (7.2):
Marginal note:Non-capital losses of employee life and health trusts
(7.3) Paragraph (1)(a) does not apply in computing the taxable income of a trust for a taxation year if the trust is, in the year, an employee life and health trust.
Marginal note:Non-capital losses of employee life and health trusts
(7.4) For the purposes of computing the taxable income of an employee life and health trust for a taxation year, there may be deducted such portion as the trust may claim of the trust’s non-capital losses for the three taxation years immediately preceding and the three taxation years immediately following the year.
Marginal note:Non-capital losses of employee life and health trusts
(7.5) Notwithstanding paragraph (1)(a) and subsection (7.4), no amount in respect of the trust’s non-capital losses for a taxation year in which the trust was an employee life and health trust may be deducted in computing the trust’s taxable income for another taxation year (referred to in this subsection as the “specified year”) if
(a) the trust was not an employee life and health trust for the specified year; or
(b) the trust is an employee life and health trust that, because of the application of subsection 144.1(3), is not permitted to deduct any amount under subsection 104(6) for the specified year.
(3) The description of E in the definition “non-capital loss” in subsection 111(8) of the Act is amended by adding the following after paragraph (a):
(a.1) an amount deductible under paragraph 104(6)(a.4) in computing the taxpayer’s income for the year;
(4) Subsections (2) and (3) apply after 2009.
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