Budget Implementation Act, 2017, No. 2 (S.C. 2017, c. 33)
Full Document:
- HTMLFull Document: Budget Implementation Act, 2017, No. 2 (Accessibility Buttons available) |
- PDFFull Document: Budget Implementation Act, 2017, No. 2 [3012 KB]
Assented to 2017-12-14
PART 1Amendments to the Income Tax Act and to Related Legislation (continued)
R.S., c. 1 (5th Supp.)Income Tax Act (continued)
12 (1) Clause 53(2)(c)(i)(C) of the Act is replaced by the following:
(C) subsections 100(4), 112(3.1), (4), (4.2) as it read in its application to dispositions of property that occurred before April 27, 1995 and (5.2),
(2) Subsection (1) is deemed to have come into force on September 16, 2016.
13 (1) Paragraph (c.1) of the definition principal residence in section 54 of the Act is amended by striking out “and” at the end of subparagraph (iii) and by adding the following after that subparagraph:
(iii.1) if the year begins after 2016, the trust is, in the year,
(A) a trust
(I) for which a day is to be determined under paragraph 104(4)(a), (a.1) or (a.4) by reference to the death or later death, as the case may be, that has not occurred before the beginning of the year, of an individual who is resident in Canada during the year, and
(II) a specified beneficiary of which for the year is the individual referred to in subclause (I),
(B) a trust
(I) that is a qualified disability trust (as defined in subsection 122(3)) for the year, and
(II) an electing beneficiary (in this clause, as defined in subsection 122(3)) of which for the year is
1 resident in Canada during the year,
2 a specified beneficiary of the trust for the year, and
3 a spouse, common-law partner, former spouse or common-law partner or child of the settlor (in this subparagraph, as defined in subsection 108(1)) of the trust, or
(C) a trust
(I) a specified beneficiary of which for the year is an individual
1 who is resident in Canada during the year,
2 who has not attained 18 years of age before the end of the year, and
3 a mother or father of whom is a settlor of the trust, and
(II) in respect of which either of the following conditions is met:
1 no mother or father of the individual referred to in subclause (I) is alive at the beginning of the year, or
2 the trust arose before the beginning of the year on and as a consequence of the death of a mother or father of the individual referred to in subclause (I), and
(2) Paragraph (c) of the definition superficial loss in section 54 of the Act is replaced by the following:
(c) a disposition deemed to have been made by subsection 45(1), section 48 as it read in its application before 1993, section 50 or 70, subsection 104(4), section 128.1, paragraph 132.2(3)(a) or (c), subsection 138(11.3) or 138.2(4) or 142.5(2), section 142.6 or any of subsections 144(4.1) and (4.2) and 149(10),
(3) Subsection (2) applies to taxation years that begin after 2017.
14 (1) Paragraph 56(1)(z.3) of the Act is replaced by the following:
Marginal note:Pooled registered pension plan
(z.3) any amount required by section 147.5 to be included in computing the taxpayer’s income for the year other than an amount distributed under a PRPP as a return of all or a portion of a contribution to the plan to the extent that the amount
(i) is a payment described under clause 147.5(3)(d)(ii)(A) or (B), and
(ii) is not deducted in computing the taxpayer’s income for the year or a preceding taxation year; and
(2) Subsection (1) is deemed to have come into force on December 14, 2012.
15 (1) Clause 56.4(7)(b)(ii)(A) of the Act is replaced by the following:
(A) under which the vendor or the vendor’s eligible corporation disposes of property (other than property described in clause (B) or subparagraph (i)) to the purchaser, or the purchaser’s eligible corporation, for consideration that is received or receivable by the vendor, or the vendor’s eligible corporation, as the case may be, or
(2) Subclause 56.4(7)(c)(i)(B)(I) of the Act is replaced by the following:
(I) under which the vendor or the vendor’s eligible corporation disposes of property (other than property described in subclause (II) or clause (A)) to the eligible individual, or the eligible individual’s corporation, for consideration that is received or receivable by the vendor, or the vendor’s eligible corporation, as the case may be, or
(3) Subparagraphs 56.4(7)(g)(i) and (ii) of the Act are replaced by the following:
(i) in the case of subparagraph (b)(i), the vendor, or the vendor’s eligible corporation, if it is required to include the goodwill amount in computing its income, and the purchaser, or the purchaser’s eligible corporation, if it incurs the expenditure that is the goodwill amount to the vendor or the vendor’s eligible corporation, as the case may be, or
(ii) in the case of clause (c)(i)(A), the vendor, or the vendor’s eligible corporation, if it is required to include the goodwill amount in computing its income, and the eligible individual, or the eligible individual’s eligible corporation, if it incurs the expenditure that is the goodwill amount to the vendor or the vendor’s eligible corporation, as the case may be.
(4) Subsections (1) to (3) apply in respect of restrictive covenants granted after September 15, 2016.
16 (1) The definition eligible pension income in subsection 60.03(1) 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) the lesser of
(i) the total of all amounts received by the individual in the year on account of a retirement income security benefit payable to the individual under Part 2 of the Canadian Forces Members and Veterans Re-establishment and Compensation Act, and
(ii) the amount, if any, by which the defined benefit limit (as defined in subsection 8500(1) of the Income Tax Regulations) for the year multiplied by 35 exceeds the total of the amounts determined under paragraphs (a) and (b). (revenu de pension déterminé)
(2) Subsection (1) applies to the 2015 and subsequent taxation years.
17 (1) Subsection 62(2) of the Act is replaced by the following:
Marginal note:Moving expenses of students
(2) There may be deducted in computing a taxpayer’s income for a taxation year the amount, if any, that the taxpayer would be entitled to deduct under subsection (1) if the definition eligible relocation in subsection 248(1) were read without reference to subparagraph (a)(i) of that definition and if the word “both” in paragraph (c) of that definition were read as “either or both”.
(2) Subsection (1) applies to taxation years that end after October 2011.
18 (1) The portion of clause (i)(B) of the description of C in paragraph 63(2)(b) of the Act before subclause (I) is replaced by the following:
(B) a person certified in writing by a medical doctor or a nurse practitioner to be a person who
(2) Subsection (1) applies in respect of certifications made after September 7, 2017.
19 (1) Paragraph 66(12.601)(b) of the Act is replaced by the following:
(b) during the period beginning on the particular day the agreement was entered into and ending on the earlier of December 31, 2018 and the day that is 24 months after the end of the month that included that particular day, the corporation incurred Canadian development expenses (excluding expenses that are deemed by subsection (12.66) to have been incurred on December 31, 2018) described in paragraph (a) or (b) of the definition Canadian development expense in subsection 66.2(5) or that would be described in paragraph (f) of that definition if the words “paragraphs (a) to (e)” in that paragraph were read as “paragraphs (a) and (b)”,
(2) Subsection (1) comes into force on the day on which this Act receives royal assent except that, in its application in respect of agreements entered into after 2016 and before March 22, 2017, paragraph 66(12.601)(b) of the Act, as enacted by subsection (1), is to be read without reference to the phrase “the earlier of December 31, 2018 and”.
20 Subparagraph (d)(i) of the definition Canadian exploration expense in subsection 66.1(6) of the Act is amended by striking out “and” at the end of clause (A), by adding “and” at the end of clause (B) and by adding the following after clause (B):
(C) the expense is incurred
(I) before 2021 (excluding an expense that is deemed by subsection 66(12.66) to have been incurred on December 31, 2020), if the expense is incurred in connection with an obligation that was committed to in writing (including a commitment to a government under the terms of a license or permit) by the taxpayer before March 22, 2017, or
(II) before 2019 (excluding an expense that is deemed by subsection 66(12.66) to have been incurred on December 31, 2018), in any other case,
21 (1) Paragraph 75(3)(d) of the Act is replaced by the following:
(d) by a trust if
(i) the trust acquired the property, or other property for which the property is a substitute, from a particular individual,
(ii) the particular individual acquired the property or the other property, as the case may be, in respect of another individual as a consequence of the operation of subsection 122.61(1) or under section 4 of the Universal Child Care Benefit Act, and
(iii) the trust has no beneficiaries (as defined in subsection 108(1)) who may for any reason receive directly from the trust any of the income or capital of the trust other than individuals in respect of whom the particular individual acquired property as a consequence of the operation of a provision described in subparagraph (ii).
(2) Subsection (1) applies to taxation years that end after September 15, 2016.
22 (1) Section 80.03 of the English version of the Act is amended by adding the following before subsection (2):
Marginal note:Definitions
80.03 (1) In this section, commercial debt obligation, commercial obligation, distress preferred share, forgiven amount and person have the meanings assigned by subsection 80(1).
(2) Subsection (1) applies to taxation years that end after February 21, 1994.
23 (1) Section 85 of the Act is amended by adding the following after subsection (1.11):
Marginal note:Eligible derivatives
(1.12) Notwithstanding subsection (1.1), an eligible derivative (as defined in subsection 10.1(5)) of a taxpayer to which subsection 10.1(6) applies is not an eligible property of the taxpayer in respect of a disposition by the taxpayer to a corporation.
(2) The portion of paragraph 85(2)(a) of the Act before subparagraph (i) is replaced by the following:
(a) a partnership has disposed, to a taxable Canadian corporation for consideration that includes shares of the corporation’s capital stock, of any partnership property (other than an eligible derivative, as defined in subsection 10.1(5), of the partnership if subsection 10.1(6) applies to the partnership) that was
(3) Subsections (1) and (2) apply to taxation years that begin after March 21, 2017.
24 (1) Subsection 87(2) of the Act is amended by adding the following after paragraph (e.4):
(e.41) if subsection 10.1(6) applied to a predecessor corporation in its last taxation year, each eligible derivative (as defined in subsection 10.1(5)) of the predecessor corporation immediately before the end of its last taxation year is deemed to have been reacquired, or reissued or renewed, as the case may be, by the new corporation at its fair market value immediately before the amalgamation;
(e.42) for the purposes of subsection 10.1(7), the new corporation is deemed to be the same corporation as, and a continuation of, each predecessor corporation;
(2) Section 87 of the Act is amended by adding the following after subsection (8.3):
Marginal note:Taxable Canadian property — conditions for rollover
(8.4) Subsection (8.5) applies at any time if
(a) there is at that time a foreign merger of two or more predecessor foreign corporations (within the meaning assigned by subsection (8.1), if that subsection and subsection (8.2) were read without reference to the expression “otherwise than as a result of the distribution of property to one corporation on the winding-up of another corporation”) that were, immediately before that time,
(i) resident in the same country, and
(ii) related to each other (determined without reference to paragraph 251(5)(b));
(b) because of the foreign merger,
(i) a predecessor foreign corporation (referred to in this subsection and subsection (8.5) as the “disposing predecessor foreign corporation”) disposes of a property (referred to in this subsection and subsection (8.5) as the “subject property”) that is, at that time,
(A) a taxable Canadian property (other than treaty-protected property) of the disposing predecessor foreign corporation, and
(B) any of the following:
(I) a share of the capital stock of a corporation,
(II) an interest in a partnership, and
(III) an interest in a trust, and
(ii) the subject property becomes property of a corporation that is a new foreign corporation for the purposes of subsection (8.1);
(c) no shareholder (except any predecessor foreign corporation) that owned shares of the capital stock of a predecessor foreign corporation immediately before the foreign merger received consideration for the disposition of those shares on the foreign merger, other than shares of the capital stock of the new foreign corporation;
(d) if the subject property is a share of the capital stock of a corporation or an interest in a trust, the corporation or trust is not, at any time in the 24-month period beginning at that time, as part of a transaction or event, or series of transactions or events including the foreign merger, subject to a loss restriction event; and
(e) the new foreign corporation and the disposing predecessor foreign corporation jointly elect in writing under this paragraph in respect of the foreign merger and file the election with the Minister on or before the filing-due date of the disposing predecessor foreign corporation (or the date that would be its filing-due date, if subsection (8.5) did not apply in respect of the disposition of the subject property) for the taxation year that includes that time.
Marginal note:Foreign merger — taxable Canadian property rollover
(8.5) If this subsection applies at any time,
(a) if the subject property is an interest in a partnership,
(i) the disposing predecessor foreign corporation is deemed not to dispose of the subject property (other than for the purposes of subsection (8.4)), and
(ii) the new foreign corporation is deemed
(A) to have acquired the subject property at a cost equal to the cost of the subject property to the disposing predecessor foreign corporation, and
(B) to be the same corporation as, and a continuation of, the disposing predecessor foreign corporation in respect of the subject property; and
(b) if the subject property is a share of the capital stock of a corporation or an interest in a trust,
(i) the subject property is deemed to have been disposed of at that time by the disposing predecessor foreign corporation to the new foreign corporation (that is referred to in subparagraph (8.4)(b)(ii)) for proceeds of disposition equal to the adjusted cost base of the subject property to the disposing predecessor foreign corporation immediately before that time, and
(ii) the cost of the subject property to the new foreign corporation is deemed to be the amount that is deemed by subparagraph (i) to be the proceeds of disposition of the subject property.
(3) The portion of subsection 87(10) of the Act after paragraph (f) is replaced by the following:
the new share is deemed, for the purposes of subsection 116(6), the definitions qualified investment in subsections 146(1), 146.1(1), 146.3(1) and 146.4(1), in section 204 and in subsection 207.01(1), and the definition taxable Canadian property in subsection 248(1), to be listed on the exchange until the earliest time at which it is so redeemed, acquired or cancelled.
(4) Subsection (1) applies to taxation years that begin after March 21, 2017.
(5) Subsection (2) applies to foreign mergers that occur after September 15, 2016, except that an election referred to in paragraph 87(8.4)(e) of the Act, as enacted by subsection (2), is deemed to have been filed on a timely basis if it is filed on or before the day that is six months after the day on which this Act receives royal assent.
(6) Subsection (3) is deemed to have come into force on March 23, 2017.
Page Details
- Date modified: