Keeping Canada’s Economy and Jobs Growing Act (S.C. 2011, c. 24)
Full Document:
Assented to 2011-12-15
60. (1) Subsections 188.2(1) to (4) of the Act are replaced by the following:
Marginal note:Notice of suspension with assessment
188.2 (1) The Minister shall, with an assessment referred to in this subsection, give notice by registered mail to a registered charity or registered Canadian amateur athletic association that the authority of the charity or association to issue an official receipt referred to in Part XXXV of the Income Tax Regulations is suspended for one year from the day that is seven days after the day on which the notice is mailed, if the Minister has assessed the charity or association for a taxation year for
(a) a penalty under subsection 188.1(2);
(b) a penalty under paragraph 188.1(4)(b) in respect of an undue benefit, other than an undue benefit conferred by the charity or association by way of a gift; or
(c) a penalty under subsection 188.1(9) if the total of all such penalties for the taxation year exceeds $25,000.
Marginal note:Notice of suspension — general
(2) The Minister may give notice by registered mail to a person referred to in any of paragraphs (a) to (c) of the definition “qualified donee” in subsection 149.1(1) that the authority of the person to issue an official receipt referred to in Part XXXV of the Income Tax Regulations is suspended for one year from the day that is seven days after the day on which the notice is mailed
(a) if the person contravenes any of sections 230 to 231.5;
(b) if it may reasonably be considered that the person has acted, in concert with another person that is the subject of a suspension under this section, to accept a gift or transfer of property on behalf of that other person;
(c) in the case of a person referred to in paragraph (a) of the definition “qualified donee” in subsection 149.1(1), if the person has issued a receipt for a gift otherwise than in accordance with this Act and the regulations; or
(d) in the case of a person that is a registered charity or registered Canadian amateur athletic association, if an ineligible individual is a director, trustee, officer or like official of the person, or controls or manages the person, directly or indirectly, in any manner whatever.
Marginal note:Effect of suspension
(3) If the Minister has issued a notice to a qualified donee under subsection (1) or (2), subject to subsection (4),
(a) the qualified donee is deemed, in respect of gifts made and property transferred to the qualified donee within the one-year period that begins on the day that is seven days after the day on which the notice is mailed, not to be a qualified donee for the purposes of subsections 110.1(1) and 118.1(1) and Part XXXV of the Income Tax Regulations; and
(b) if the qualified donee is, during that period, offered a gift from any person, the qualified donee shall, before accepting the gift, inform that person that
(i) it has received the notice,
(ii) no deduction under subsection 110.1(1) or credit under subsection 118.1(3) may be claimed in respect of a gift made to it in the period, and
(iii) a gift made to it in the period is not a gift to a qualified donee.
Marginal note:Application for postponement
(4) If a notice of objection to a suspension under subsection (1) or (2) has been filed by a qualified donee, the qualified donee may file an application to the Tax Court of Canada for a postponement of that portion of the period of suspension that has not elapsed until the time determined by the Court.
(2) Subsection (1) applies to taxation years that begin on or after the later of the day on which this Act receives royal assent and January 1, 2012.
61. (1) The portion of subsection 189(6.3) of the Act before paragraph (b) is replaced by the following:
Marginal note:Reduction of liability for penalties
(6.3) If the Minister has assessed a particular person in respect of the particular person’s liability for penalties under section 188.1 for a taxation year, and that liability exceeds $1,000, that liability is, at any particular time, reduced by the total of all amounts, each of which is an amount, in respect of a property transferred by the particular person after the day on which the Minister first assessed that liability and before the particular time to another person that was at the time of the transfer an eligible donee in respect of the particular person, equal to the amount, if any, by which the fair market value of the property, when transferred, exceeds the total of
(a) the consideration given by the other person for the transfer, and
(2) Subsection 189(7) of the Act is replaced by the following:
Marginal note:Minister may assess
(7) Without limiting the authority of the Minister to revoke the registration of a registered charity or registered Canadian amateur athletic association, the Minister may also at any time assess a taxpayer in respect of any amount that a taxpayer is liable to pay under this Part.
(3) Subsections (1) and (2) apply to taxation years that begin on or after the later of the day on which this Act receives royal assent and January 1, 2012.
62. (1) Subparagraph 204.9(5)(c)(ii) of the Act is replaced by the following:
(ii) a parent of a beneficiary under the transferee plan was a parent of an individual who was, immediately before the particular time, a beneficiary under the transferor plan and
(A) the transferee plan is a plan that allows more than one beneficiary under the plan at any one time, or
(B) in any other case, the beneficiary under the transferee plan had not attained 21 years of age at the time the transferee plan was entered into;
(2) Subsection (1) applies in respect of property transferred after 2010.
63. (1) The heading of Part XI.01 of the Act is replaced by the following:
TAXES IN RESPECT OF RRIFs, RRSPs and TFSAs
(2) Subsection (1) is deemed to have come into force on March 23, 2011.
64. (1) The portion of subsection 207.01(1) of the Act before the definition “advantage” is replaced by the following:
Marginal note:Definitions
207.01 (1) The following definitions and the definitions in subsections 146(1) (other than the definition “benefit”), 146.2(1) and 146.3(1) apply in this Part and in Parts XLIX and L of the Income Tax Regulations.
(2) The definitions “advantage”, “non-qualified investment”, “specified non-qualified investment income” and “swap transaction” in subsection 207.01(1) of the Act are replaced by the following:
“advantage”
« avantage »
“advantage”, in relation to a registered plan, means
(a) any benefit, loan or indebtedness that is conditional in any way on the existence of the registered plan, other than
(i) a benefit derived from the provision of administrative or investment services in respect of the registered plan,
(ii) a loan or an indebtedness (including, in the case of a TFSA, the use of the TFSA as security for a loan or an indebtedness) the terms and conditions of which are terms and conditions that persons dealing at arm’s length with each other would have entered into,
(iii) a payment out of or under the registered plan in satisfaction of all or part of the controlling individual’s interest in the registered plan, and
(iv) the payment or allocation of any amount to the registered plan by the issuer or carrier;
(b) a benefit that is an increase in the total fair market value of the property held in connection with the registered plan if it is reasonable to consider, having regard to all the circumstances, that the increase is attributable, directly or indirectly, to
(i) a transaction or event or a series of transactions or events that
(A) would not have occurred in an open market in which parties deal with each other at arm’s length and act prudently, knowledgeably and willingly, and
(B) had as one of its main purposes to enable a person or a partnership to benefit from the exemption from tax under Part I of any amount in respect of the registered plan,
(ii) a payment received as, on account or in lieu of, or in satisfaction of, a payment
(A) for services provided by a person who is, or who does not deal at arm’s length with, the controlling individual of the registered plan, or
(B) of interest, of a dividend, of rent, of a royalty or of any other return on investment, or of proceeds of disposition, in respect of property (other than property held in connection with the registered plan) held by a person who is, or who does not deal at arm’s length with, the controlling individual of the registered plan,
(iii) a swap transaction, or
(iv) specified non-qualified investment income that has not been paid from the registered plan to its controlling individual within 90 days of receipt by the controlling individual of a notice issued by the Minister under subsection 207.06(4);
(c) a benefit that is income (including a capital gain) that is reasonably attributable, directly or indirectly, to
(i) a prohibited investment in respect of the registered plan or any other registered plan of the controlling individual,
(ii) in the case of a RRIF or RRSP, an amount received by the controlling individual of the registered plan, or by a person who does not deal at arm’s length with the controlling individual (if it is reasonable to consider, having regard to all the circumstances, that the amount was paid in relation to, or would not have been paid but for, property held in connection with the registered plan) and the amount was paid as, on account or in lieu of, or in satisfaction of, a payment
(A) for services provided by a person who is, or who does not deal at arm’s length with, the controlling individual of the registered plan, or
(B) of interest, of a dividend, of rent, of a royalty or of any other return on investment, or of proceeds of disposition, or
(iii) a deliberate over-contribution;
(d) an RRSP strip in respect of the registered plan; and
(e) a prescribed benefit.
“non-qualified investment”
« placement non admissible »
“non-qualified investment” for a trust governed by a registered plan means property that is not a qualified investment for the trust.
“specified non-qualified investment income”
« revenu de placement non admissible déterminé »
“specified non-qualified investment income”, in respect of a registered plan and its controlling individual, means income (including a capital gain) that is reasonably attributable, directly or indirectly, to an amount in respect of which tax was payable under Part I by a trust governed by the registered plan or by any other registered plan of the controlling individual.
“swap transaction”
« opération de swap »
“swap transaction”, in respect of a registered plan, means a transfer of property between the registered plan and its controlling individual or a person with whom the controlling individual does not deal at arm’s length, but does not include
(a) a payment out of or under the registered plan in satisfaction of all or part of the controlling individual’s interest in the registered plan;
(b) a payment into the registered plan that is a contribution, a premium, or an amount transferred in accordance with paragraph 146.3(2)(f);
(c) a transfer of a prohibited investment or a non-qualified investment from the registered plan, in circumstances where the controlling individual is entitled to a refund under subsection 207.04(4) on the transfer; or
(d) a transfer of property from one registered plan of a controlling individual to another registered plan of the controlling individual if
(i) both registered plans are RRIFs or RRSPs, or
(ii) both registered plans are TFSAs.
(3) The portion of the definition “prohibited investment” in subsection 207.01(1) of the Act before paragraph (c) is replaced by the following:
“prohibited investment”
« placement interdit »
“prohibited investment”, at any time, for a trust governed by a registered plan, means property (other than prescribed excluded property) that is at that time
(a) a debt of the controlling individual of the registered plan;
(b) a share of the capital stock of, an interest in, or a debt of
(i) a corporation, partnership or trust in which the controlling individual has a significant interest, or
(ii) a person or partnership that does not deal at arm’s length with the controlling individual or with a person or partnership described in subparagraph (i);
(4) Subsection 207.01(1) of the Act is amended by adding the following in alphabetical order:
“controlling individual”
« particulier contrôlant »
“controlling individual”, of a registered plan, means the holder of a TFSA or the annuitant of a RRIF or RRSP, as the case may be.
“registered plan”
« régime enregistré »
“registered plan” means a RRIF, RRSP or TFSA.
“RRSP strip”
« somme découlant d’un dépouillement de REER »
“RRSP strip”, in respect of a RRIF or RRSP, means an amount used or obtained by the controlling individual of the RRIF or RRSP, or a person who does not deal at arm’s length with the controlling individual, as part of a transaction or event or a series of transactions or events one of the main purposes of which is to enable the controlling individual, or a person who does not deal at arm’s length with the controlling individual, to use or obtain the benefit of property held in connection with the RRIF or RRSP, but does not include an amount that is
(a) included in the income of the controlling individual or their spouse or common-law partner under section 146 or 146.3;
(b) an excluded withdrawal under section 146.01 or 146.02;
(c) described in subsection 146(16) or 146.3(14.2); or
(d) the principal amount of a debt obligation that is a prescribed excluded property.
“transitional prohibited investment benefit”
« bénéfice transitoire provenant d’un placement interdit »
“transitional prohibited investment benefit”, of a controlling individual for a taxation year, means the amount determined by the formula
A – B
where
- A
- is the total of all amounts each of which is income earned, or a capital gain realized, in the taxation year by a trust governed by a RRIF or RRSP of the controlling individual that
(a) is attributable to a property that was, on March 23, 2011, a prohibited investment for a trust governed by a RRIF or RRSP of the controlling individual, and
(b) in the case of income, is earned after March 22, 2011 and before 2022 and, in the case of a capital gain, accrues after March 22, 2011 and is realized before 2022; and
- B
- is the total of all amounts each of which is a capital loss, determined without reference to subparagraph 40(2)(g)(i) and subsection 40(3.4), realized in the taxation year by a trust governed by a RRIF or RRSP of the controlling individual that
(a) is attributable to a property that was, on March 23, 2011, a prohibited investment for a trust governed by a RRIF or RRSP of the controlling individual, and
(b) accrues after March 22, 2011 and is realized before 2022.
(5) Subsection 207.01(5) of the Act is replaced by the following:
Marginal note:Obligation of issuer
(5) The issuer or carrier of a registered plan shall exercise the care, diligence and skill of a reasonably prudent person to minimize the possibility that a trust governed by the registered plan holds a non-qualified investment.
(6) Subsections (1) and (2) apply to transactions occurring, income earned, capital gains accruing and investments acquired, after March 22, 2011, except that the definition “swap transaction” in subsection 207.01(1) of the Act, as enacted by subsection (2), applies
(a) after 2021 in relation to a swap transaction undertaken to remove a property from a RRIF or RRSP if it is reasonable to conclude that the retention of the property in the RRIF or RRSP would result in a tax being payable under Part XI.01 of the Act, and
(b) in any other case, after June 2011.
(7) Subsection (3) applies after March 22, 2011 in respect of investments acquired at any time.
(8) Subsections (4) and (5) are deemed to have come into force on March 23, 2011.
- Date modified: