Technical Tax Amendments Act, 2012 (S.C. 2013, c. 34)
Full Document:
- HTMLFull Document: Technical Tax Amendments Act, 2012 (Accessibility Buttons available) |
- PDFFull Document: Technical Tax Amendments Act, 2012 [3313 KB]
Assented to 2013-06-26
PART 5OTHER AMENDMENTS TO THE INCOME TAX ACT AND RELATED LEGISLATION
R.S., c. 1 (5th Supp.)Income Tax Act
180. (1) Paragraph 20(1)(bb) of the Act is replaced by the following:
Marginal note:Fees paid to investment counsel
(bb) an amount, other than a commission, that
(i) is paid by the taxpayer in the year to a person or partnership the principal business of which
(A) is advising others as to the advisability of purchasing or selling specific shares or securities, or
(B) includes the provision of services in respect of the administration or management of shares or securities, and
(ii) is paid for
(A) advice as to the advisability of purchasing or selling a specific share or security of the taxpayer, or
(B) services in respect of the administration or management of shares or securities of the taxpayer;
(2) Paragraph 20(1)(jj) of the Act is repealed.
(3) Subsection 20(8) of the Act is amended by striking out “or” at the end of paragraph (a) and by adding the following after paragraph (b):
(c) the purchaser of the property sold was a corporation that, immediately after the sale,
(i) was controlled, directly or indirectly, in any manner whatever, by the taxpayer,
(ii) was controlled, directly or indirectly, in any manner whatever, by a person or group of persons that controlled the taxpayer, directly or indirectly, in any manner whatever, or
(iii) controlled the taxpayer, directly or indirectly, in any manner whatever; or
(d) the purchaser of the property sold was a partnership in which the taxpayer was, immediately after the sale, a majority interest partner.
(4) Subsection 20(12) of the Act is replaced by the following:
Marginal note:Foreign non-business income tax
(12) In computing the income of a taxpayer who is resident in Canada at any time in a taxation year from a business or property for the year, there may be deducted any amount that the taxpayer claims that does not exceed the non-business income tax paid by the taxpayer for the year to the government of a country other than Canada (within the meaning assigned by subsection 126(7) read without reference to paragraphs (c) and (e) of the definition “non-business income tax” in that subsection) in respect of that income, other than any of those taxes paid that can, in whole or in part, reasonably be regarded as having been paid by a corporation in respect of income from a share of the capital stock of a foreign affiliate of the corporation.
(5) Paragraph 20(16)(a) of the Act is replaced by the following:
(a) the total of all amounts used to determine A to D.1 in the definition “undepreciated capital cost” in subsection 13(21) in respect of a taxpayer’s depreciable property of a particular class exceeds the total of all amounts used to determine E to K in that definition in respect of that property, and
(6) Subsection 20(16.1) of the Act is replaced by the following:
Marginal note:Non-application of subsection (16)
(16.1) Subsection (16) does not apply
(a) in respect of a passenger vehicle of a taxpayer that has a cost to the taxpayer in excess of $20,000 or any other amount that is prescribed; and
(b) in respect of a taxation year in respect of a property that was a former property deemed by paragraph 13(4.3)(a) or (b) to be owned by the taxpayer, if
(i) within 24 months after the taxpayer last owned the former property, the taxpayer or a person not dealing at arm’s length with the taxpayer acquires a similar property in respect of the same fixed place to which the former property applied, and
(ii) at the end of the taxation year, the taxpayer or the person owns the similar property or another similar property in respect of the same fixed place to which the former property applied.
(7) Subsections 20(17) and (18) of the Act are repealed.
(8) Subsection 20(26) of the Act is repealed.
(9) Subsection (1) applies to amounts paid after June 2005.
(10) Subsection (2) applies to reinsurance commissions paid after 1999.
(11) Subsection (3) applies in respect of property sold by a taxpayer after December 20, 2002. However, if a property so sold pursuant to an agreement in writing made before December 21, 2002 is transferred to the purchaser before 2004
(a) subsection 20(8) of the Act, as it read immediately before the enactment of subsection (3), applies in respect of the property; and
(b) for the purpose of applying paragraph 20(1)(n) of the Act to the taxpayer for a taxation year in respect of the property, a reasonable amount as a reserve in respect of an amount not due in respect of the sale may not exceed the amount that would be reasonable if the proceeds from any subsequent disposition of the property that the purchaser receives before the end of the taxation year were received by the taxpayer.
(12) Subsection (4) applies after December 20, 2002 in respect of taxes paid at any time.
(13) Subsection (5) applies to taxation years that end after February 23, 1998.
(14) Subsection (6) applies in respect of taxation years that end after December 20, 2002.
(15) Subsection (8) applies to taxation years that begin after October 31, 2011.
181. (1) Subclause 37(8)(a)(ii)(B)(V) of the Act is replaced by the following:
(V) the cost of materials consumed or transformed in the prosecution of scientific research and experimental development in Canada, or
(2) Subsection (1) applies to costs incurred after February 23, 1998.
182. (1) The Act is amended by adding the following before section 39:
Marginal note:Allocation of gain re certain gifts
38.2 If a taxpayer is entitled to an amount of an advantage in respect of a gift of property described in paragraph 38(a.1) or (a.2),
(a) those paragraphs apply only to that proportion of the taxpayer’s capital gain in respect of the gift that the eligible amount of the gift is of the taxpayer’s proceeds of disposition in respect of the gift; and
(b) paragraph 38(a) applies to the extent that the taxpayer’s capital gain in respect of the gift exceeds the amount of the capital gain to which paragraph 38(a.1) or (a.2) applies.
(2) Subsection (1) applies to gifts made after December 20, 2002.
183. (1) Paragraph 40(1.01)(c) of the Act is replaced by the following:
(c) the amount that the taxpayer claims in prescribed form filed with the taxpayer’s return of income for the particular year, not exceeding the eligible amount of the gift, where the taxpayer is not deemed by subsection 118.1(13) to have made a gift of property before the end of the particular year as a consequence of a disposition of the security by the donee or as a consequence of the security ceasing to be a non-qualifying security of the taxpayer before the end of the particular year.
(2) Paragraph 40(2)(a) of the Act is amended by striking out “or” at the end of subparagraph (i), by adding “or” at the end of subparagraph (ii) and by adding the following after subparagraph (ii):
(iii) the purchaser of the property sold is a partnership in which the taxpayer was, immediately after the sale, a majority interest partner;
(3) The descriptions of A and B in subsection 40(3.11) of the Act are replaced by the following:
- A
- is the total of
(a) all amounts required by subsection 53(2) to be deducted in computing the adjusted cost base to the member of the interest in the partnership at that time, and
(b) if the member is a member of a professional partnership, and that time is the end of the fiscal period of the partnership, the amount referred to in subparagraph 53(2)(c)(i) in respect of the taxpayer for that fiscal period; and
- B
- is the total of
(a) the cost to the member of the interest determined for the purpose of computing the adjusted cost base to the member of the interest at that time,
(b) all amounts required by subsection 53(1) to be added to the cost to the member of the interest in computing the adjusted cost base to the member of the interest at that time, and
(c) if the member is a member of a professional partnership, and that time is the end of the fiscal period of the partnership, the amount referred to in subparagraph 53(1)(e)(i) in respect of the taxpayer for that fiscal period.
(4) Section 40 of the Act is amended by adding the following after subsection (3.11):
Meaning of “professional partnership”
(3.111) In this section, “professional partnership” means a partnership through which one or more persons carry on the practice of a profession that is governed or regulated under a law of Canada or a province.
(5) Paragraph 40(3.14)(a) of the English version of the Act is replaced by the following:
(a) by operation of any law governing the partnership arrangement, the liability of the member as a member of the partnership is limited (except by operation of a provision of a statute of Canada or a province that limits the member’s liability only for debts, obligations and liabilities of the partnership, or any member of the partnership, arising from negligent acts or omissions, from misconduct or from fault of another member of the partnership or an employee, an agent or a representative of the partnership in the course of the partnership business while the partnership is a limited liability partnership);
(6) Paragraph 40(3.5)(b) of the Act is replaced by the following:
(b) a share of the capital stock of a corporation that is acquired in exchange for another share in a transaction is deemed to be a property that is identical to the other share if
(i) section 51, 86 or 87 applies to the transaction, or
(ii) the following conditions are met, namely,
(A) section 85.1 applies to the transaction,
(B) subsection (3.4) applied to a prior disposition of the other share, and
(C) none of the times described in any of subparagraphs (3.4)(b)(i) to (v) has occurred in respect of the prior disposition;
(7) Subsection (1) applies to gifts made after December 20, 2002.
(8) Subsection (2) applies to sales that occur after December 20, 2002.
(9) Subsections (3) and (4) apply to fiscal periods that end after November 2001.
(10) Subsection (5) is deemed to have come into force on June 21, 2001.
(11) Subsection (6) applies to dispositions of property that occur after April 26, 1995, except that it does not apply to any of those dispositions by a person or partnership that occurred before 1996 and that is described in subsection 247(1) of the Income Tax Amendments Act, 1997 unless the person or partnership, as the case may be, made an election under subsection 247(2) of that Act.
184. (1) Section 42 of the Act is replaced by the following:
Marginal note:Dispositions subject to warranty
42. (1) For the purposes of this subdivision,
(a) an amount received or receivable by a person or partnership (referred to in this subsection as the “vendor”), as the case may be, as consideration for a warranty, covenant or other conditional or contingent obligation given or incurred by the vendor in respect of a property (referred to in this section as the “subject property”) disposed of by the vendor,
(i) if it is received or receivable on or before the specified date, is deemed to be received as consideration for the disposition by the vendor of the subject property (and not to be an amount received or receivable by the vendor as consideration for the obligation) and is to be included in computing the vendor’s proceeds of disposition of the subject property for the taxation year or fiscal period in which the disposition occurred, and
(ii) in any other case, is deemed to be a capital gain of the vendor from the disposition of a property by the vendor that occurs at the earlier of the time when the amount is received or becomes receivable; and
(b) an outlay or expense paid or payable by the vendor under a warranty, covenant or other conditional or contingent obligation given or incurred by the vendor in respect of the subject property disposed of by the vendor,
(i) if it is paid or payable on or before the specified date, is deemed to reduce the consideration for the disposition by the vendor of the subject property (and not to be an outlay or expense paid or payable by the vendor under the obligation) and is to be deducted in computing the vendor’s proceeds of disposition of the subject property for the taxation year or fiscal period in which the disposition occurred, and
(ii) in any other case, is deemed to be a capital loss of the vendor from the disposition of a property by the vendor that occurs at the earlier of the time when the outlay or expense is paid or becomes payable.
Meaning of “specified date”
(2) In subsection (1), “specified date” means,
(a) if the vendor is a partnership, the last day of the vendor’s fiscal period in which the vendor disposed of the subject property; and
(b) in any other case, the vendor’s filing-due date for the vendor’s taxation year in which the vendor disposed of the subject property.
(2) Subsection (1) applies to taxation years and fiscal periods that end after February 27, 2004 except that, in its application to taxation years and fiscal periods that end before November 5, 2010, section 42 of the Act, as enacted by subsection (1), is to be read as follows:
42. For the purposes of this subdivision,
(a) an amount received or receivable by a taxpayer in a taxation year as consideration for a warranty, a covenant or another conditional or contingent obligation given or incurred by the taxpayer in respect of a property disposed of, at any time, by the taxpayer
(i) is, if the amount is received or becomes receivable on or before the taxpayer’s filing-due date for the taxpayer’s taxation year in which the taxpayer disposed of the property, to be included in computing the taxpayer’s proceeds of disposition of the property, and
(ii) is, if the amount is received or becomes receivable after that filing-due date, deemed to be a capital gain of the taxpayer from the disposition, by the taxpayer of the property, that occurs at the time when the amount is received or becomes receivable; and
(b) an outlay or expense paid or payable by the taxpayer in a taxation year under a warranty, covenant or another conditional or contingent obligation given or incurred by the taxpayer in respect of property disposed of, at any time, by the taxpayer
(i) is, if the amount is paid or becomes payable on or before the taxpayer’s filing-due date for the taxpayer’s taxation year in which the taxpayer disposed of the property, to be deducted in computing the taxpayer’s proceeds of disposition of the property, and
(ii) is, if the amount is paid or becomes payable after that filing-due date, deemed to be a capital loss of the taxpayer from the disposition, by the taxpayer of the property, that occurs at the time when the amount is paid or becomes payable.
185. (1) The portion of subsection 43(2) of the Act before the formula in paragraph (a) is replaced by the following:
Marginal note:Ecological gifts
(2) For the purposes of subsection (1) and section 53, if at any time a taxpayer disposes of a covenant or an easement to which land is subject or, in the case of land in the Province of Quebec, a real servitude, in circumstances where subsection 110.1(5) or 118.1(12) applies,
(a) the portion of the adjusted cost base to the taxpayer of the land immediately before the disposition that can reasonably be regarded as attributable to the covenant, easement or real servitude, as the case may be, is deemed to be equal to the amount determined by the formula
(2) Subsection (1) applies to gifts made after December 20, 2002.
186. (1) Paragraphs 44(1)(c) and (d) of the Act are replaced by the following:
(c) if the former property is described in paragraph (a), before the later of the end of the second taxation year following the initial year and 24 months after the end of the initial year, and
(d) in any other case, before the later of the end of the first taxation year following the initial year and 12 months after the end of the initial year,
(2) Subsection 44(7) of the Act is amended by striking out “or” at the end of paragraph (a), by adding “or” at the end of paragraph (b) and by adding the following after paragraph (b):
(c) the former property of the taxpayer was disposed of to a partnership in which the taxpayer was, immediately after the disposition, a majority interest partner.
(3) Paragraph 44(1)(c) of the Act, as enacted by subsection (1), applies in respect of dispositions that occur in taxation years that end on or after December 20, 2000.
(4) Paragraph 44(1)(d) of the Act, as enacted by subsection (1), applies in respect of dispositions that occur in taxation years that end on or after December 20, 2001.
(5) Subsection (2) applies to dispositions of property by a taxpayer that occur after December 20, 2002. However, if a property so disposed of pursuant to an agreement in writing made before December 21, 2002 is transferred to the purchaser before 2004
(a) subsection 44(7) of the Act, as it read immediately before the enactment of subsection (2), applies in respect of the disposition of property; and
(b) for the purpose of applying subparagraph 44(1)(e)(iii) of the Act to the taxpayer for a taxation year in respect of the property, a reasonable amount as a reserve in respect of the proceeds of disposition may not exceed the amount that would be reasonable if the proceeds from any subsequent disposition of the property that the purchaser receives before the end of the taxation year were received by the taxpayer.
Page Details
- Date modified: