Fall Economic Statement Implementation Act, 2023 (S.C. 2024, c. 15)
Full Document:
- HTMLFull Document: Fall Economic Statement Implementation Act, 2023 (Accessibility Buttons available) |
- PDFFull Document: Fall Economic Statement Implementation Act, 2023 [4401 KB]
Assented to 2024-06-20
PART 1Amendments to the Income Tax Act and to Other Legislation (continued)
R.S., c. 1 (5th Supp.)Income Tax Act (continued)
46 (1) The definition survivor in subsection 146.6(1) of the Act is replaced by the following:
- survivor
survivor of a holder means another individual who is, immediately before the holder’s death, a spouse or common-law partner of the holder. (survivant)
(2) The definition bénéficiaire in subsection 146.6(1) of the French version of the Act is replaced by the following:
- beneficiary
bénéficiaire Relativement à un CELIAPP, s’entend d’un particulier (y compris une succession) ou d’un donataire reconnu qui a droit à une distribution du CELIAPP après le décès du titulaire du CELIAPP. (beneficiary)
(3) Paragraph (b) of the definition annual FHSA limit in subsection 146.6(1) of the Act is replaced by the following:
(b) the amount determined by the formula
$8,000 + D − (E − F)
where
- D
- is the amount of the FHSA carryforward for the taxation year,
- E
- is the taxpayer’s net RRSP-to-FHSA transfer amount at the end of the taxation year, and
- F
- is the total of all amounts, each of which is an amount determined in respect of each preceding taxation year that is
(i) if the taxpayer had not started their maximum participation period in the year, nil, or
(ii) in any other case, the lesser of
(A) the amount determined by the formula
G − H
where
- G
- is the amount determined for E in the year, and
- H
- is the amount determined for F in the year, and
(B) $8,000 plus the amount of the FHSA carryforward for the year, and
(4) The description of B in paragraph (b) of the definition FHSA carryforward in subsection 146.6(1) of the Act is replaced by the following:
- B
- is the amount determined in paragraph (a) of the definition annual FHSA limit for the preceding taxation year plus the total of all contributions made to a FHSA in the preceding taxation year by the taxpayer after the taxpayer’s first qualifying withdrawal from a FHSA, and
(5) Subsection 146.6(1) of the Act is amended by adding the following in alphabetical order:
- net RRSP-to-FHSA transfer amount
net RRSP-to-FHSA transfer amount of a holder at a particular time means the amount by which
(a) the total of all amounts transferred under paragraph 146(16)(a.2), at or before that time, to a FHSA of the holder
exceeds
(b) the total of all amounts designated by the holder under paragraph (a) of the definition designated amount in subsection 207.01(1) at or before that time. (montant net de transfert de REER à CELIAPP)
(6) Section 146.6 of the Act is amended by adding the following after subsection (3):
Marginal note:Amount credited to a deposit
(3.1) An amount that is credited or added to a deposit that is a FHSA as interest or other income in respect of the FHSA is deemed not to be received by the holder of the FHSA or any other person solely because of that crediting or adding.
(7) Subparagraph 146.6(5)(b)(ii) of the Act is replaced by the following:
(ii) the taxpayer’s net RRSP-to-FHSA transfer amount as at the end of the year.
(8) The descriptions of A and B in paragraph 146.6(7)(c) of the Act are replaced by the following:
- A
- is the amount that is the total fair market value, immediately before the particular time, of all property held by a FHSA under which the last holder of the transferor FHSA is the last holder, and
- B
- is the excess FHSA amount (as defined in subsection 207.01(1)) of the last holder of the transferor FHSA immediately before the particular time.
(9) Paragraphs 146.6(13)(a) and (b) of the Act are replaced by the following:
(a) the survivor is a qualifying individual at that time and
(i) no contributions or transfers are made to the FHSA by the survivor after that time,
(ii) no qualifying withdrawals are made from the FHSA after that time, and
(iii) the balance of the FHSA is transferred to a RRSP or RRIF of the survivor or distributed to the survivor in accordance with subsection (14), by the end of the year following the year of death; or
(b) the survivor is not a qualifying individual at that time, in which case the balance of the FHSA is to be transferred to a FHSA, RRSP or RRIF of the survivor, or distributed to the survivor in accordance with subsection (14), by the end of the year following the year of death.
(10) Paragraph 146.6(15)(a) of the Act is replaced by the following:
(a) if a payment is made from the estate to a FHSA, RRSP or RRIF of the survivor, the payment is deemed to be a transfer from the FHSA to the extent that it is so designated jointly by the legal representative and the survivor in prescribed form filed with the Minister;
(11) Paragraphs 146.6(17)(a) to (c) of the Act are replaced by the following:
(a) subsections (3) and (3.1) do not apply in respect of that arrangement after the particular time;
(b) if the taxpayer who was the last holder under the arrangement is not deceased at the particular time, an amount equal to the fair market value of all the property of the arrangement, determined at that time, is deemed for the purposes of subsection 146.6(6) to be received at that time by the taxpayer out of or under the FHSA;
(c) if the last holder is deceased at the particular time, the proportion of the fair market value of all the property of the arrangement that a beneficiary is entitled to, determined at that time, is deemed for the purposes of subsection 146.6(14) to be distributed at that time from the FHSA to the beneficiary;
(d) if the arrangement governs a trust,
(i) the trust is deemed to have disposed, immediately before the particular time, of each property held by the trust for proceeds equal to the property’s fair market value immediately before the particular time,
(ii) the trust is deemed to have acquired, at the particular time, each such property at a cost equal to that fair market value,
(iii) the trust’s last taxation year that began before the particular time is deemed to have ended immediately before the particular time, and
(iv) a taxation year of the trust is deemed to begin at the particular time; and
(e) if the arrangement is a deposit or contract,
(i) the arrangement is deemed to have been disposed of immediately before the particular time for proceeds equal to its fair market value immediately before the particular time,
(ii) if the arrangement is an annuity contract, the contract is deemed to be a separate annuity contract issued and effected at the particular time otherwise than pursuant to or as a FHSA, and
(iii) each person who has an interest or, for civil law, a right in the separate annuity contract or deposit, as the case may be, at the particular time is deemed to acquire the interest at the particular time at a cost equal to its fair market value at the particular time.
(12) Subsections (1) to (11) are deemed to have come into force on April 1, 2023.
47 (1) Paragraph 152(1)(b) of the Act is replaced by the following:
(b) the amount of tax, if any, deemed by any of subsections 120(2) or (2.2), 122.5(3) to (3.003), 122.51(2), 122.7(2) or (3), 122.72(1), 122.8(4), 122.9(2), 122.91(1), 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1), 127.41(3), 127.44(2) or 210.2(3) or (4) to be paid on account of the taxpayer’s tax payable under this Part for the year.
(2) Paragraph 152(1)(b) of the Act, as enacted by subsection (1), is replaced by the following:
(b) the amount of tax, if any, deemed by any of subsections 120(2) or (2.2), 122.5(3) to (3.003), 122.51(2), 122.7(2) or (3), 122.72(1), 122.8(4), 122.9(2), 122.91(1), 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1), 127.41(3), 127.44(2), 127.45(2) or 210.2(3) or (4) to be paid on account of the taxpayer’s tax payable under this Part for the year.
(3) The portion of subsection 152(3.1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Definition of normal reassessment period
(3.1) For the purposes of subsections (4), (4.01), (4.2), (4.3), (4.31), (5) and (9), the normal reassessment period for a taxpayer in respect of a taxation year is
(4) Paragraph 152(4)(b) of the Act is amended by striking out “or” at the end of subparagraph (vi), by adding “or” at the end of subparagraph (vii) and by adding the following after subparagraph (vii):
(viii) is made to give effect to the application of section 245 in respect of a transaction, unless the transaction was disclosed by the taxpayer to the Minister in accordance with section 237.3 or 237.4;
(5) Subsection 152(4) of the Act is amended by adding the following after paragraph (b.7):
(b.8) a prescribed form that is required to be filed under subsection 18.2(18) is not filed as and when required, and the assessment, reassessment or additional assessment is
(i) made before the day that is
(A) in the case of a taxpayer described in paragraph (3.1)(a), four years after the day on which the prescribed form containing the prescribed information is filed, and
(B) in any other case, three years after the day on which the prescribed form containing the prescribed information is filed, and
(ii) in respect of the application of paragraph 12(1)(l.2), subsection 18.2(2), clause 95(2)(f.11)(ii)(D) or (E) or paragraph 111(1)(a.1);
(6) Subsection 152(4) of the Act is amended by adding the following after paragraph (b.8), as enacted by subsection (5):
(b.9) the assessment, reassessment or additional assessment
(i) is made before the day that is three years after the end of the normal reassessment period for the taxpayer in respect of the year and made in respect of a disposition, in the year, of shares of the capital stock of a corporation resident in Canada in respect of which the taxpayer filed an election under paragraph 84.1(2.31)(h), or
(ii) is made before the day that is 10 years after the end of the normal reassessment period for the taxpayer in respect of the year and made in respect of a disposition, in the year, of shares of the capital stock of a corporation resident in Canada in respect of which the taxpayer filed an election under paragraph 84.1(2.32)(i);
(7) Subsection 152(4) of the Act is amended by adding the following after paragraph (b.9), as enacted by subsection (6):
(b.10) a prescribed form that is required to be filed by the taxpayer, or a partnership of which the taxpayer is a member, under subsection 127.45(15) or (18) is not filed as and when required, and the assessment, reassessment or additional assessment is made in relation to transactions or events described in subsections 127.45(11) to (14) or (16) and (17) before the day that is
(i) in the case of a taxpayer described in paragraph (3.1)(a), four years after the day on which the form is filed, and
(ii) in any other case, three years after the day on which the form is filed;
(8) Paragraph 152(4.01)(b) of the Act is amended by striking out “or” at the end of subparagraph (ix) and by adding the following after subparagraph (x):
(xi) the transaction referred to in subparagraph (4)(b)(viii), or
(xii) the transactions or events referred to in paragraph (4)(b.10);
(9) Section 152 of the Act is amended by adding the following after subsection (4.3):
Marginal note:Consequential assessment of Part IV tax
(4.31) Notwithstanding subsections (4), (4.1) and (5), if a taxpayer in a taxation year receives a taxable dividend from a corporation that, as a result of having paid the dividend, is entitled to a dividend refund, the Minister may, within one year after the expiration of the normal reassessment period for the taxpayer in respect of the year, assess or reassess the tax, interest or penalties payable under Part IV by the taxpayer in respect of the taxable dividend.
(10) Subsection (1) is deemed to have come into force on January 1, 2022.
(11) Subsection (2) is deemed to have come into force on March 28, 2023.
(12) Subsections (3) and (9) apply to assessments or reassessments of taxpayers for taxation years that end on or after April 7, 2022.
(13) Subsection (4) applies to transactions that occur on or after January 1, 2024.
(14) Subsection (5) applies in respect of taxation years that begin on or after October 1, 2023.
(15) Subsection (6) comes into force or is deemed to have come into force on January 1, 2024.
(16) Subparagraph 152(4.01)(b)(xi) of the Act, as enacted by subsection (8), applies to transactions that occur on or after January 1, 2024.
48 (1) Paragraph 153(1)(v) of the Act is replaced by the following:
(v) a payment out of or under a FHSA, if the amount is required by section 146.6 to be included in computing a taxpayer’s income
(2) Subsection (1) is deemed to have come into force on April 1, 2023.
49 (1) Paragraph 157(3)(e) of the Act is replaced by the following:
(e) 1/12 of the total of the amounts each of which is deemed by subsection 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1), 127.41(3) or 127.44(2) to have been paid on account of the corporation’s tax payable under this Part for the year.
(2) Paragraph 157(3)(e) of the Act, as enacted by subsection (1), is replaced by the following:
(e) 1/12 of the total of the amounts each of which is deemed by subsection 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1), 127.41(3), 127.44(2) or 127.45(2) to have been paid on account of the corporation’s tax payable under this Part for the year.
(3) Paragraph 157(3.1)(c) of the Act is replaced by the following:
(c) 1/4 of the total of the amounts each of which is deemed by subsection 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1), 127.41(3) or 127.44(2) to have been paid on account of the corporation’s tax payable under this Part for the taxation year.
(4) Paragraph 157(3.1)(c) of the Act, as enacted by subsection (3), is replaced by the following:
(c) 1/4 of the total of the amounts each of which is deemed by subsection 125.4(3), 125.5(3), 125.6(2) or (2.1), 127.1(1), 127.41(3), 127.44(2) or 127.45(2) to have been paid on account of the corporation’s tax payable under this Part for the taxation year.
(5) Subsections (1) and (3) are deemed to have come into force on January 1, 2022.
(6) Subsections (2) and (4) are deemed to have come into force on March 28, 2023.
50 (1) Section 160 of the Act is amended by adding the following after subsection (1.4):
Marginal note:Joint liability — intergenerational business transfer
(1.5) If a taxpayer and one or more other taxpayers have jointly elected under
(a) paragraph 84.1(2.31)(h) in respect of a disposition of shares of the capital stock of a corporation resident in Canada, they are jointly and severally, or solidarily, liable for the tax payable by the taxpayer under this Part to the extent that the tax payable by the taxpayer is greater than it would have been if the disposition had satisfied the conditions of subsection 84.1(2.31); or
(b) paragraph 84.1(2.32)(i) in respect of a disposition of shares of the capital stock of a corporation resident in Canada, they are jointly and severally, or solidarily, liable for the tax payable by the taxpayer under this Part to the extent that the tax payable by the taxpayer is greater than it would have been if the disposition had satisfied the conditions of subsection 84.1(2.32).
(2) Subsection (1) comes into force or is deemed to have come into force on January 1, 2024.
- Date modified: