Economic Action Plan 2013 Act, No. 2 (S.C. 2013, c. 40)
Full Document:
Assented to 2013-12-12
93. (1) The portion of subsection 256(7) of the Act before paragraph (a) is replaced by the following:
Marginal note:Acquiring control
(7) For the purposes of this subsection, of section 55, subsections 66(11), 66.5(3), 66.7(10) and (11), 85(1.2), 88(1.1) and (1.2), 110.1(1.2) and 111(5.4) and paragraph 251.2(2)(a) and of subsection 5905(5.2) of the Income Tax Regulations,
(2) Clause 256(7)(a)(i)(D) of the Act is replaced by the following:
(D) a particular person who acquired the shares from an estate that arose on and as a consequence of the death of an individual, if the estate acquired the shares from the individual as a consequence of the death and the individual was related to the particular person immediately before the death,
(3) Subsection 256(7) of the Act is amended by striking out “and” at the end of paragraph (f) and by adding the following after paragraph (g):
(h) if at any time after September 12, 2013 a trust is subject to a loss restriction event and immediately before that time the trust, or a group of persons a member of which is the trust, controls a corporation, control of the corporation and of each corporation controlled by it immediately before that time is deemed to have been acquired at that time by a person or group of persons; and
(i) if at any time after September 12, 2013 a trust controls a corporation, control of the corporation is deemed not to be acquired solely because of a change in the trustee or legal representative having ownership or control of the trust’s property if
(i) the change is not part of a series of transactions or events that includes a change in the beneficial ownership of the trust’s property, and
(ii) no amount of income or capital of the trust to be distributed, at any time at or after the change, in respect of any interest in the trust depends upon the exercise by any person or partnership, or the failure of any person or partnership, to exercise any discretionary power.
(4) The portion of subsection 256(8) of the French version of the Act before paragraph (a) is replaced by the following:
Marginal note:Présomption d’exercice de droit
(8) Pour ce qui est de déterminer, d’une part, si le contrôle d’une société a été acquis pour l’application des paragraphes 10(10) et 13(24), de l’article 37, des paragraphes 55(2), 66(11), (11.4) et (11.5), 66.5(3) et 66.7(10) et (11), de l’article 80, de l’alinéa 80.04(4)h), du sous-alinéa 88(1)c)(vi), de l’alinéa 88(1)c.3), des paragraphes 88(1.1) et (1.2), des articles 111 et 127, des paragraphes 181.1(7), 190.1(6) et 249(4) et de l’alinéa 251.2(2)a) et, d’autre part, si une société est contrôlée par une personne ou par un groupe de personnes pour l’application de l’article 251.1 et des alinéas 251.2(3)c) et d), le contribuable qui a acquis un droit visé à l’alinéa 251(5)b) afférent à une action est réputé être dans la même position relativement au contrôle de la société que si le droit était immédiat et absolu et que s’il l’avait exercé au moment de l’acquisition, dans le cas où il est raisonnable de conclure que l’un des principaux motifs de l’acquisition du droit consistait :
(5) Paragraph 256(8)(b) of the Act is replaced by the following:
(b) to avoid the application of subsection 10(10) or 13(24), paragraph 37(1)(h) or subsection 55(2) or 66(11.4) or (11.5), paragraph 88(1)(c.3) or subsection 111(4), (5.1), (5.2) or (5.3), 181.1(7), 190.1(6) or 251.2(2),
(6) The portion of subsection 256(8) of the English version of the Act after paragraph (e) is replaced by the following:
the taxpayer is deemed to be in the same position in relation to the control of the corporation as if the right were immediate and absolute and as if the taxpayer had exercised the right at that time for the purpose of determining whether control of a corporation has been acquired for the purposes of subsections 10(10) and 13(24), section 37, subsections 55(2), 66(11), (11.4) and (11.5), 66.5(3), 66.7(10) and (11), section 80, paragraph 80.04(4)(h), subparagraph 88(1)(c)(vi), paragraph 88(1)(c.3), subsections 88(1.1) and (1.2), sections 111 and 127, subsections 181.1(7), 190.1(6) and 249(4) and paragraph 251.2(2)(a) and in determining for the purposes of section 251.1 and paragraphs 251.2(3)(c) and (d) whether a corporation is controlled by any other person or group of persons.
(7) Subsections (1) and (3) to (6) are deemed to have come into force on March 21, 2013.
(8) Subsection (2) is deemed to have come into force on September 13, 2013.
94. (1) The Act is amended by adding the following after section 256:
Marginal note:Definitions
256.1 (1) The following definitions apply in this section.
“attribute trading restriction”
« restriction au commerce d’attributs »
“attribute trading restriction” means a restriction on the use of a tax attribute arising on the application, either alone or in combination with other provisions, of any of this section, subsections 10(10) and 13(24), section 37, subsections 66(11.4) and (11.5), 66.7(10) and (11), 69(11) and 88(1.1) and (1.2), sections 111 and 127 and subsections 181.1(7), 190.1(6), 249(4) and 256(7).
“person”
« personne »
“person” includes a partnership.
“specified provision”
« dispositions déterminées »
“specified provision” means any of subsections 10(10) and 13(24), paragraph 37(1)(h), subsections 66(11.4) and (11.5), 66.7(10) and (11), 69(11) and 111(4), (5), (5.1), (5.2) and (5.3), paragraphs (j) and (k) of the definition “investment tax credit” in subsection 127(9), subsections 181.1(7) and 190.1(6) and any provision of similar effect.
Marginal note:Application of subsection (3)
(2) Subsection (3) applies at a particular time in respect of a corporation if
(a) shares of the capital stock of the corporation held by a person, or the total of all shares of the capital stock of the corporation held by members of a group of persons, as the case may be, have at the particular time a fair market value that exceeds 75% of the fair market value of all the shares of the capital stock of the corporation;
(b) shares, if any, of the capital stock of the corporation held by the person, or the total of all shares, if any, of the capital stock of the corporation held by members of the group, have immediately before the particular time a fair market value that does not exceed 75% of the fair market value of all the shares of the capital stock of the corporation;
(c) the person or group does not control the corporation at the particular time; and
(d) it is reasonable to conclude that one of the main reasons that the person or group does not control the corporation is to avoid the application of one or more specified provisions.
Marginal note:Deemed acquisition of control
(3) If this subsection applies at a particular time in respect of a corporation, then for the purposes of the attribute trading restrictions,
(a) the person or group referred to in subsection (2)
(i) is deemed to acquire control of the corporation, and each corporation controlled by the corporation, at the particular time, and
(ii) is not deemed to have control of the corporation, and each corporation controlled by the corporation, at any time after the particular time solely because this paragraph applied at the particular time; and
(b) during the period that the condition in paragraph (2)(a) is satisfied, each corporation referred to in paragraph (a) — and any corporation incorporated or otherwise formed subsequent to that time and controlled by that corporation — is deemed not to be related to, or affiliated with, any person to which it was related to, or affiliated with, immediately before paragraph (a) applies.
Marginal note:Special rules
(4) For the purpose of applying paragraph (2)(a) in respect of a person or group of persons,
(a) if it is reasonable to conclude that one of the reasons that one or more transactions or events occur is to cause a person or group of persons not to hold shares having a fair market value that exceeds 75% of the fair market value of all the shares of the capital stock of a corporation, the paragraph is to be applied without reference to those transactions or events; and
(b) the person, or each member of the group, is deemed to have exercised each right that is held by the person or a member of the group and that is referred to in paragraph 251(5)(b) in respect of a share of the corporation referred to in paragraph (2)(a).
Marginal note:Deeming rules — if share value nil
(5) For the purposes of subsections (2) to (4), if the fair market value of the shares of the capital stock of a corporation is nil at any time, then for the purpose of determining the fair market value of those shares, the corporation is deemed, at that time, to have assets net of liabilities equal to $100,000 and to have $100,000 of income for the taxation year that includes that time.
Marginal note:Deemed acquisition of control
(6) If, at any time as part of a transaction or event or series of transactions or events, control of a particular corporation is acquired by a person or group of persons and it can reasonably be concluded that one of the main reasons for the acquisition of control is so that a specified provision does not apply to one or more corporations, the attribute trading restrictions are deemed to apply to each of those corporations as if control of each of those corporations were acquired at that time.
(2) Subsection (1) is deemed to have come into force on March 21, 2013, except that it does not apply to an event or transaction that occurs
(a) before March 21, 2013, or
(b) after March 20, 2013 pursuant to an obligation created by the terms of an agreement in writing entered into between parties before March 21, 2013, and for the purposes of this paragraph, parties will be considered not to be obligated if one or more of those parties may be excused from fulfilling the obligation as a result of changes to the Act.
2011, c. 24Keeping Canada’s Economy and Jobs Growing Act
95. (1) Paragraph 64(6)(a) of the Keeping Canada’s Economy and Jobs Growing Act is replaced by the following:
(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 tax would be payable under Part XI.01 of the Act if
(i) that Part were read without reference to subsection 207.05(4) of the Act, and
(ii) the property were retained in the RRIF or RRSP; and
(2) Subsection (1) is deemed to have come into force on December 15, 2011.
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