(i) the portion of the amount required by subsection 127(10.1) to be added in computing the taxpayer’s investment tax credit at the end of the year that is in respect of qualified expenditures incurred by the taxpayer in the year, and

Marginal note:Addition to refundable investment tax credit

(2.01) In the case of a taxpayer that is a Canadian-controlled private corporation other than a qualifying corporation or an excluded corporation, the refundable investment tax credit of the taxpayer for a taxation year is the amount, if any, by which

• (a) the total of

  • (i) the portion of the amount required by subsection 127(10.1) to be added in computing the taxpayer’s investment tax credit at the end of the year that is in respect of qualified expenditures incurred by the taxpayer in the year, and

  • (ii) all amounts determined under paragraph (a.1) of the definition “investment tax credit” in subsection 127(9) in respect of expenditures for which an amount is included in subparagraph (i)

exceeds

• (b) the total of

  • (i) the portion of the total of all amounts deducted by the taxpayer under subsection 127(5) for the year or a preceding taxation year (other than an amount deemed by subsection (3) to have been so deducted for the year) that can reasonably be considered to be in respect of the total determined under paragraph (a), and

  • (ii) the portion of the total of all amounts required by subsection 127(6) to be deducted in computing the taxpayer’s investment tax credit at the end of the year that can reasonably be considered to be in respect of the total determined under paragraph (a).

(d.1) where, by reason of paragraph (d), a taxation year of the individual is not a calendar year,

• (i) paragraph 146(5)(b) shall, for the purpose of the application of subsection 146(5) to the taxation year, be read as follows:

  • “(b) the amount, if any, by which

    • (i) the amount, if any, by which the taxpayer’s RRSP deduction limit for the particular calendar year in which the taxation year ends exceeds the total of all contributions made by an employer in the particular calendar year to a pooled registered pension plan in respect of the taxpayer

    exceeds

    • (ii) the total of the amounts deducted under this subsection and subsection (5.1) in computing the taxpayer’s income for any preceding taxation year that ends in the particular calendar year.”,

and

• (ii) paragraph 146(5.1)(b) shall, for the purpose of the application of subsection 146(5.1) to the taxation year, be read as follows:

  • “(b) the amount, if any, by which

    • (i) the amount, if any, by which the taxpayer’s RRSP deduction limit for the particular calendar year in which the taxation year ends exceeds the total of all contributions made by an employer in the particular calendar year to a pooled registered pension plan in respect of the taxpayer

    exceeds

    • (ii) the total of the amount deducted under subsection (5) in computing the taxpayer’s income for the year and the amounts deducted under this subsection and subsection (5) in computing the taxpayer’s income for any preceding taxation year that ends in the particular calendar year.”;

Marginal note:Foreign affiliate dumping — immigrating corporation

(c.3) if the taxpayer is a corporation that was, immediately before the particular time, controlled by a particular non-resident corporation and the taxpayer owned, immediately before the particular time, one or more shares of one or more non-resident corporations (each of which is in this paragraph referred to as a “subject affiliate”) that, immediately after the particular time, were — or that became, as part of a transaction or event or series of transactions or events that includes the taxpayer having become resident in Canada — foreign affiliates of the taxpayer, then

• (i) in computing the paid-up capital, at any time after the time that is immediately after the particular time, of any particular class of shares of the capital stock of the taxpayer there is to be deducted the amount determined by the formula

  A × B/C

  where

  A

  is the lesser of

  • (A) the paid-up capital in respect of all of the shares of the capital stock of the taxpayer at the time that is immediately after the particular time, and

  • (B) the total of all amounts each of which is the fair market value at the particular time of

    • (I) a share of the capital stock of a subject affiliate owned by the taxpayer at the particular time, or

    • (II) an amount owing by the subject affiliate to the taxpayer at the particular time,

  B

  is the paid-up capital in respect of the particular class of shares of the capital stock of the taxpayer at the time that is immediately after the particular time, and

  C

  is the paid-up capital in respect of all the shares of the capital stock of the taxpayer at the time that is immediately after the particular time, and

• (ii) for the purposes of Part XIII, the taxpayer is deemed, immediately after the particular time, to have paid to the particular non-resident corporation, and the particular non-resident corporation is deemed, immediately after the particular time, to have received from the taxpayer, a dividend equal to the amount, if any, by which the amount determined under clause (B) of the description of A in subparagraph (i) exceeds the amount determined under clause (A) of the description of A in subparagraph (i); and

Marginal note:Paid-up capital adjustment

(3) In computing the paid-up capital at any time in respect of a class of shares of the capital stock of a corporation

• (a) there is to be deducted an amount equal to the lesser of A and B, and added an amount equal to the lesser of A and C, where

  A

  is the absolute value of the difference between

  • (i) the total of all amounts deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of the class paid before that time by the corporation, and

  • (ii) the total that would be determined under subparagraph (i) if this Act were read without reference to subsection (2),

  B

  is the total of all amounts required by subsection (2) to be added in computing the paid-up capital in respect of the class before that time, and

  C

  is the total of all amounts required by subsection (2) to be deducted in computing the paid-up capital in respect of the class before that time; and

• (b) there is to be added an amount equal to the lesser of

  • (i) the amount, if any, by which

    • (A) the total of all amounts deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of the class paid after March 28, 2012 and before that time by the corporation

    exceeds

    • (B) the total that would be determined under clause (A) if this Act were read without reference to subparagraph (c.3)(i), and

  • (ii) the total of all amounts required by subparagraph (c.3)(i) to be deducted in computing the paid-up capital in respect of the class before that time.

Marginal note:Non-application of subsections (1) to (6)

(7) Subsections (1) to (6) do not apply to the holder of a segregated fund policy with respect to such a policy that is issued or effected as or under a pooled registered pension plan, registered pension plan, registered retirement income fund, registered retirement savings plan or TFSA.

Marginal note:Restriction — financially dependent

(1.1) For the purposes of paragraph (b) of the definition “refund of premiums” in subsection (1), clause 60(l)(v)(B.01), the definition “eligible individual” in subsection 60.02(1), subparagraph 104(27)(e)(i) and section 147.5, it is assumed, unless the contrary is established, that an individual’s child or grandchild was not financially dependent on the individual for support immediately before the individual’s death if the income of the child or grandchild for the taxation year preceding the taxation year in which the individual died exceeded the amount determined by the formula

(iii.1) that was an exempt-income contribution amount (as defined in subsection 147.5(1)) for any taxation year,

(b) the amount, if any, by which the taxpayer’s RRSP deduction limit for the year exceeds the total of all contributions made by an employer in the year to a pooled registered pension plan in respect of the taxpayer.

(b) the amount, if any, by which the taxpayer’s RRSP deduction limit for the year exceeds the total of all amounts each of which is

• (i) the amount deducted under subsection (5) in computing the taxpayer’s income for the year, or

• (ii) a contribution made by an employer in the year to a pooled registered pension plan in respect of the taxpayer.

(iii) was not paid by way of a transfer of an amount to a registered retirement savings plan from

(A) a pooled registered pension plan in circumstances to which subsection 147.5(21) applied, or

(B) a specified pension plan in circumstances to which subsection (21) applied,

Marginal note:Specified pension plan — account

(21.2) For the purposes of paragraph (8.2)(b), subsection (8.21), paragraphs (16)(a) and (b) and 18(1)(u), subparagraph (a)(i) of the definition “excluded right or interest” in subsection 128.1(10), paragraph (b) of the definition “excluded premium” in subsection 146.01(1), paragraph (c) of the definition “excluded premium” in subsection 146.02(1), subsections 146.3(14) and 147(19), section 147.3 and paragraph 147.5(21)(c), and for the purposes of any regulations made under subsection 147.1(18), an individual’s account under a specified pension plan is deemed to be a registered retirement savings plan under which the individual is the annuitant.

Marginal note:Election

(1.1) A subscriber under an RESP that allows accumulated income payments and a holder of an RDSP may jointly elect in prescribed form to have subsection (1.2) apply in respect of a beneficiary under the RESP if, at the time the election is made, the beneficiary is also the beneficiary under the RDSP and

• (a) the beneficiary has a severe and prolonged mental impairment that prevents, or can reasonably be expected to prevent, the beneficiary from enrolling in a qualifying educational program at a post-secondary educational institution; or

• (b) the RESP meets the conditions described in clause (2)(d.1)(iii)(A) or (B) to make an accumulated income payment.

Marginal note:Effect of election

(1.2) If an election is made under subsection (1.1) and is filed by the promoter of the RESP with the Minister without delay, then notwithstanding paragraph (2)(d.1) and any terms of the RESP required by that paragraph, an accumulated income payment under the RESP may be made to the RDSP.

(i.1) if the plan allows accumulated income payments, the plan provides that it must be terminated before March of the year following the year in which the first such payment is made out of the plan;

(a) each accumulated income payment (other than an accumulated income payment made under subsection (1.2)) received in the year by the taxpayer under a registered education savings plan; and

(viii) a pooled registered pension plan in accordance with subsection 147.5(21);

Marginal note:Transfer to PRPP or RPP

(14.1) An amount is transferred from a registered retirement income fund of an annuitant in accordance with this subsection if the amount

• (a) is transferred at the direction of the annuitant directly to an account of the annuitant under a pooled registered pension plan; or

• (b) is transferred at the direction of the annuitant directly to a registered pension plan of which, at any time before the transfer, the annuitant was a member (within the meaning assigned by subsection 147.1(1)) or to a prescribed registered pension plan and is allocated to the annuitant under a money purchase provision (within the meaning assigned by subsection 147.1(1)) of the plan.

(c) the beneficiary if, at that time, the beneficiary is not an entity described in paragraph (a) or (b) and has rights under the plan to make decisions (either alone or with other holders of the plan) concerning the plan, except where the only such right is a right to direct that disability assistance payments be made as provided for in subparagraph (4)(n)(ii).

(b) the time that is immediately before the earliest time in a calendar year when the total disability assistance payments, other than non-taxable portions, made from the plan in the year and while it was a specified disability savings plan exceeds $10,000 (or such greater amount as is required to satisfy the condition in subparagraph (d)(i));

(c) the time that is immediately before the time that

• (i) a contribution is made to the plan,

• (ii) an amount described in any of paragraphs (a) and (b) and subparagraph (d)(ii) of the definition “contribution” in subsection (1) is paid into the plan,

• (iii) the plan is terminated,

• (iv) the plan ceases to be a registered disability savings plan as a result of the application of paragraph (10)(a), or

• (v) is the beginning of the first calendar year throughout which the beneficiary under the plan has no severe and prolonged impairments with the effects described in paragraph 118.3(1)(a.1); and

(d) the time immediately following the end of a calendar year if

• (i) in the year the total amount of disability assistance payments made from the plan to the beneficiary is less than the amount determined by the formula set out in paragraph (4)(l) in respect of the plan for the year (or such lesser amount as is supported by the property of the plan), and

• (ii) the year is not the calendar year in which the plan became a specified disability savings plan.

Marginal note:Registered status nullified

(3) A disability savings plan is deemed never to have been a registered disability savings plan unless

• (a) the issuer of the plan provides without delay notification of the plan’s establishment in prescribed form containing prescribed information to the specified Minister; and

• (b) if the beneficiary is the beneficiary under another registered disability savings plan at the time the plan is established, that other plan is terminated without delay.

(i) if the calendar year is not a specified year for the plan, the total amount of disability assistance payments made from the plan to the beneficiary in the calendar year shall not exceed the specified maximum amount for the calendar year, except that, in calculating that total amount, any payment made following a transfer in the calendar year from another plan in accordance with subsection (8) is to be disregarded if it is made

• (A) to satisfy an undertaking described in paragraph (8)(d), or

• (B) in lieu of a payment that would otherwise have been permitted to be made from the other plan in the calendar year had the transfer not occurred, and

(ii) if the beneficiary attained the age of 27 years, but not the age of 59 years, before the calendar year, the beneficiary has the right to direct that, within the constraints imposed by subparagraph (i) and paragraph (j), one or more disability assistance payments be made from the plan to the beneficiary in the calendar year;

(n.1) the plan provides that, if the beneficiary attained the age of 59 years before a calendar year, the total amount of disability assistance payments made from the plan to the beneficiary in the calendar year shall not be less than the amount determined by the formula set out in paragraph (l) in respect of the plan for the calendar year (or such lesser amount as is supported by the property of the plan trust);

(o) the plan provides that, at the direction of the holders of the plan, the issuer shall transfer all of the property held by the plan trust (or an amount equal to its value) to another registered disability savings plan of the beneficiary, together with all information in its possession (other than information provided to the issuer of the other plan by the specified Minister) that may reasonably be considered necessary for compliance, in respect of the other plan, with the requirements of this Act and with any conditions and obligations imposed under the Canada Disability Savings Act; and

(ii) the first calendar year

• (A) if an election is made under subsection (4.1), that includes the time that the election ceases because of paragraph (4.2)(b) to be valid, and

• (B) in any other case, throughout which the beneficiary has no severe and prolonged impairments with the effects described in paragraph 118.3(1)(a.1).

Marginal note:Election on cessation of DTC-eligibility

(4.1) A holder of a registered disability savings plan may elect in respect of a beneficiary under the plan who is not a DTC-eligible individual for a particular taxation year if

• (a) a medical doctor licensed to practise under the laws of a province certifies in writing that the nature of the beneficiary’s condition is such that, in the professional opinion of the medical doctor, the beneficiary is likely to become a DTC-eligible individual for a future taxation year;

• (b) the beneficiary was a DTC-eligible individual for the year that immediately precedes the particular taxation year;

• (c) the holder makes the election in a manner and format acceptable to the specified Minister before the end of the year immediately following the particular taxation year and provides the election and the medical certification in respect of the beneficiary to the issuer of the plan; and

• (d) the issuer notifies the specified Minister of the election in a manner and format acceptable to the specified Minister.

Marginal note:Election

(4.2) An election under subsection (4.1) ceases to be valid at the time that is the earlier of

• (a) the beginning of the first taxation year for which the beneficiary is again a DTC-eligible individual; and

• (b) the end of the fourth taxation year following the particular taxation year referred to in subsection (4.1).

Marginal note:Transitional rule

(4.3) Unless an election is made under subsection (4.1), if 2011 or 2012 is the first calendar year throughout which the beneficiary of a registered disability savings plan has no severe and prolonged impairments with the effects described in paragraph 118.3(1)(a.1) and the plan has not been terminated, then notwithstanding subparagraph (4)(p)(ii) as it read on March 28, 2012 and any terms of the plan required by that subparagraph, the plan must be terminated no later than December 31, 2014.

(c) the issuer of the prior plan provides the issuer of the new plan with all information in its possession concerning the prior plan (other than information provided to the issuer of the new plan by the specified Minister) as may reasonably be considered necessary for compliance, in respect of the new plan, with the requirements of this Act and with any conditions and obligations imposed under the Canada Disability Savings Act; and