Keeping Canada’s Economy and Jobs Growing Act (S.C. 2011, c. 24)
Full Document:
Assented to 2011-12-15
65. (1) The portion of subsection 207.04(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Tax payable on prohibited or non-qualified investment
207.04 (1) The controlling individual of a registered plan that governs a trust shall pay a tax under this Part for a calendar year if, at any time in the year,
(2) Subsection 207.04(3) of the Act is replaced by the following:
Marginal note:Both prohibited and non-qualified investment
(3) For the purposes of this section and subsections 146(10.1), 146.2(6) and 146.3(9), if a trust governed by a registered plan holds property at any time that is, for the trust, both a prohibited investment and a non-qualified investment, the property is deemed at that time not to be a non-qualified investment, but remains a prohibited investment, for the trust.
(3) The portion of subsection 207.04(4) of the Act before paragraph (a) is replaced by the following:
Marginal note:Refund of tax on disposition of investment
(4) If in a calendar year a trust governed by a registered plan disposes of a property in respect of which a tax is imposed under subsection (1) on the controlling individual of the registered plan, the controlling individual is entitled to a refund for the year of an amount equal to
(4) Subparagraph 207.04(4)(b)(i) of the Act is replaced by the following:
(i) if it is reasonable to consider that the controlling individual knew, or ought to have known, at the time the property was acquired by the trust, that it was, or would become, a property described in subsection (1), or
(5) Subsections (1) to (4) apply
(a) in respect of any investment acquired after March 22, 2011, except that those subsections do not apply in the case of a prohibited investment acquired after that date by a RRIF or RRSP of an annuitant if the investment was a prohibited investment for another RRIF or RRSP of the same annuitant on March 23, 2011; and
(b) in respect of any investment acquired before March 23, 2011 that first becomes
(i) a prohibited investment after the day on which this Act has been tabled in Parliament, or
(ii) a non-qualified investment after March 22, 2011.
66. (1) Subsection 207.05(1) of the Act is replaced by the following:
Marginal note:Tax payable in respect of advantage
207.05 (1) A tax is payable under this Part for a calendar year if, in the year, an advantage in relation to a registered plan is extended to, or is received or receivable by, the controlling individual of the registered plan, a trust governed by the registered plan, or any other person who does not deal at arm’s length with the controlling individual.
(2) Subsection 207.05(2) of the Act is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):
(c) in the case of an RRSP strip, the amount of the RRSP strip.
(3) Subsection 207.05(3) of the Act is replaced by the following:
Marginal note:Liability for tax
(3) The controlling individual of a registered plan in connection with which a tax is imposed under subsection (1) is liable to pay the tax except that, if the advantage is extended by the issuer or carrier of the registered plan or by a person with whom the issuer or carrier is not dealing at arm’s length, the issuer or carrier, and not the controlling individual, is liable to pay the tax.
Marginal note:Transitional rule
(4) If an individual so elects before July 2012 in prescribed form, subsection (1) does not apply in respect of any advantage that is an amount included in the calculation of the transitional prohibited investment benefit of the individual for a taxation year provided that the transitional prohibited investment benefit
(a) is paid to the individual, from a RRIF or RRSP of the individual, within 90 days after the end of the taxation year; and
(b) is not paid by way of transfer to another RRIF or RRSP of the individual.
(4) Subsections (1) to (3) are deemed to have come into force on March 23, 2011.
67. (1) Paragraph 207.06(2)(b) of the Act is replaced by the following:
(b) the extent to which the transaction or series of transactions that gave rise to the tax also gave rise to another tax under this Act.
(2) Subsections 207.06(3) and (4) of the Act are replaced by the following:
Marginal note:Waiver of tax payable — advantage
(3) The Minister shall not waive or cancel a liability imposed under subsection 207.05(3) on an individual in respect of a registered plan unless one or more payments are made without delay from the registered plan to the individual, the total amount of which is not less than the amount of the liability waived or cancelled.
Marginal note:Other powers of Minister
(4) The Minister may notify the controlling individual of a registered plan that the controlling individual must cause a payment to be made from the registered plan to the controlling individual within 90 days of receipt of the notice, the amount of which is not less than the amount of specified non-qualified investment income in respect of the registered plan.
(3) Subsections (1) and (2) are deemed to have come into force on March 23, 2011.
68. (1) Subsection 207.1(1) of the Act is repealed.
(2) Subsection 207.1(4) of the Act is repealed.
(3) Subsections (1) and (2) apply in respect of
(a) any investment acquired after March 22, 2011; and
(b) any investment acquired before March 23, 2011 that first becomes a non-qualified investment after March 22, 2011.
69. (1) Subsection 211.6(1) of the Act is replaced by the following:
Marginal note:Charging provision
211.6 (1) Every trust that is a qualifying environmental trust at the end of a taxation year (other than a trust that is at that time described in paragraph 149(1)(z.1) or (z.2)) shall pay a tax under this Part for the year equal to 28% of its income under Part I for the year.
(2) Subsection 211.6(1) of the Act, as enacted by subsection (1), is replaced by the following:
Marginal note:Definitions
211.6 (1) The definitions in this section apply for the purposes of this Part.
“excluded trust”
« fiducie exclue »
“excluded trust”, at any time, means a trust that
(a) relates at that time to the reclamation of a well;
(b) is not maintained at that time to secure the reclamation obligations of one or more persons or partnerships that are beneficiaries under the trust;
(c) borrows money at that time;
(d) if the trust is not a trust to which paragraph (e) applies, acquires at that time any property that is not described by any of paragraphs (a), (b) and (f) of the definition “qualified investment” in section 204;
(e) if the trust is created after 2011 (or if the trust was created before 2012, it elects in writing filed with the Minister on or before its filing-due date for a particular taxation year to have subparagraphs (i) and (ii) apply to it for the particular taxation year and all subsequent taxation years, and that election is made jointly with Her Majesty in right of Canada or a particular province, depending upon the qualifying law or qualifying contract in respect of the trust),
(i) acquires at that time any property that is not described by any of paragraphs (a), (b), (c), (c.1), (d) and (f) of the definition “qualified investment” in section 204, or
(ii) holds at that time a prohibited investment;
(f) elected in writing filed with the Minister, before 1998 or before April of the year following the year in which the first contribution to the trust was made, never to have been a qualifying environmental trust; or
(g) was at any previous time during its existence not a qualifying environmental trust (as determined under the definition “qualifying environmental trust” in subsection 248(1) as it applied at that previous time).
“prohibited investment”
« placement interdit »
“prohibited investment”, of a trust at any time, means a property that
(a) at the time it was acquired by the trust, was described by any of paragraphs (c), (c.1) or (d) of the definition “qualified investment” in section 204; and
(b) was issued by
(i) a person or partnership that has contributed property to, or that is a beneficiary under, the trust,
(ii) a person that is related to, or a partnership that is affiliated with, a person or partnership that has contributed property to, or that is a beneficiary under, the trust, or
(iii) a particular person or partnership if
(A) another person or partnership holds a significant interest (within the meaning assigned by subsection 207.01(4) with any modifications that the circumstances require) in the particular person or partnership, and
(B) the holder of that significant interest has contributed property to, or is a beneficiary under, the trust.
“QET income tax rate”
« taux d’impôt sur le revenu des FEA »
“QET income tax rate”, for a trust’s taxation year, means the amount, expressed as a decimal fraction, by which
(a) the percentage rate of tax provided under paragraph 123(1)(a) for the taxation year
exceeds
(b) the total of
(i) the percentage that would, if the trust were a corporation, be its general rate reduction percentage, within the meaning assigned by subsection 123.4(1), for the taxation year, and
(ii) the percentage deduction from tax provided under subsection 124(1) for the taxation year.
“qualifying contract”
« contrat admissible »
“qualifying contract”, in respect of a trust, means a contract entered into with Her Majesty in right of Canada or a province on or before the later of January 1, 1996 and the day that is one year after the day on which the trust was created.
“qualifying environmental trust”
« fiducie pour l’environnement admissible »
“qualifying environmental trust” means a trust
(a) each trustee of which is
(i) Her Majesty in right of Canada or a province, or
(ii) a corporation resident in Canada 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 trustee;
(b) that is maintained for the sole purpose of funding the reclamation of a qualifying site;
(c) that is, or may become, required to be maintained under
(i) the terms of a qualifying contract, or
(ii) a qualifying law; and
(d) that is not an excluded trust.
“qualifying law”
« loi admissible »
“qualifying law”, in respect of a trust, means
(a) a law of Canada or a province that was enacted on or before the later of January 1, 1996 and the day that is one year after the day on which the trust was created; and
(b) if the trust was created after 2011, an order made
(i) by a tribunal constituted under a law described by paragraph (a), and
(ii) on or before the day that is one year after the day on which the trust was created.
“qualifying site”
« site admissible »
“qualifying site”, in respect of a trust, means a site in Canada that is or has been used primarily for, or for any combination of,
(a) the operation of a mine,
(b) the extraction of clay, peat, sand, shale or aggregates (including dimension stone and gravel),
(c) the deposit of waste, or
(d) if the trust was created after 2011, the operation of a pipeline.
(3) Subsection 211.6(2) of the Act is replaced by the following:
Marginal note:Charging provision
(2) Every trust that is a qualifying environmental trust at the end of a taxation year (other than a trust that is at that time described by paragraph 149(1)(z.1) or (z.2)) shall pay a tax under this Part for the year equal to the amount determined by the formula
A × B
where
- A
- is the trust’s income (computed as if this Act were read without reference to subsections 104(4) to (31) and sections 105 to 107) under Part I for the year; and
- B
- is the QET income tax rate for the year.
(4) Subsection (1) applies to the 1997 to 2011 taxation years.
(5) Subsections (2) and (3) apply to the 2012 and subsequent taxation years.
- Date modified: