Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

PART XITax in Respect of Advanced Life Deferred Annuity

Marginal note:Definitions

• 205 (1) The following definitions apply in this section.

  ALDA dollar limit

  ALDA dollar limit, for a calendar year, means

  • (a) for 2020, $150,000; and

  • (b) for each year after 2020, the amount (rounded to the nearest multiple of $10,000, or if that amount is equidistant from two such consecutive multiples, to the higher multiple) that is equal to $150,000 adjusted for each year after 2020 in the manner set out in section 117.1. (plafond de la RVDAA)

  cumulative excess amount

  cumulative excess amount, of an individual at any particular time in a calendar year, means the amount determined by the formula

  A − B

  where

  A

  is the greater of

  • (a) the total of all amounts each of which is an excess ALDA transfer of the individual at or before the particular time, and

  • (b) the amount determined by the formula

    C − D

    where

    C

    is the total of all amounts each of which is the amount of a transfer at or before the particular time to acquire an advanced life deferred annuity on behalf of the individual, and

    D

    is the ALDA dollar limit for the calendar year; and

  B

  is the total of all amounts each of which is the amount of a refund described in paragraph (g) of the definition advanced life deferred annuity in subsection 146.5(1) made at or before the particular time on behalf of the individual. (excédent cumulatif)

  excess ALDA transfer

  excess ALDA transfer, of an individual, means the portion of the amount of a transfer, made from a transferor plan under any of subsections 146(16) and 146.3(14.1) and paragraphs 147(19)(d), 147.3(1)(c) and 147.5(21)(c) to acquire an advanced life deferred annuity on behalf of the individual, determined by the formula

  A − B

  where

  A

  is the amount of the transfer; and

  B

  is the amount determined by the formula

  0.25(C + D) − E

  where

  C

  is the total value of the property held for the benefit of the individual under the transferor plan at the end of the calendar year preceding the calendar year in which the transfer is made, other than

  • (a) if the transferor plan is a registered pension plan, property held in connection with

    • (i) a defined benefit provision (as defined in subsection 147.1(1)) of the transferor plan, or

    • (ii) a VPLA fund, as described in subsection 8506(13) of the Income Tax Regulations,

  • (b) if the transferor plan is a pooled registered pension plan, property held in connection with benefits that would be described in paragraph 147.5(5)(a) if the reference in that paragraph to “8506(1)(e.1) or (e.2)” were read as a reference to “8506(1)(e.2)”,

  • (c) if the transferor plan is a registered retirement income fund, contracts for annuities held in connection with the fund other than annuities described in paragraph (b.1) of the definition qualified investment in subsection 146.3(1), and

  • (d) if the transferor plan is a registered retirement savings plan, contracts for annuities held in connection with the plan other than annuities described in paragraph (c.1) of the definition qualified investment in subsection 146(1),

  D

  is the total of all amounts each of which is the amount transferred from the transferor plan, in a calendar year preceding the calendar year in which the transfer is made, to acquire an advanced life deferred annuity on behalf of the individual, and

  E

  is the total of all amounts each of which is the amount of a previous transfer from the transferor plan to acquire an advanced life deferred annuity on behalf of the individual. (excédent de transfert au titre de la RVDAA)

• Marginal note:Tax payable by individuals

  (2) If at the end of any month an individual has a cumulative excess amount, the individual shall, in respect of that month, pay a tax under this Part equal to 1% of that cumulative excess amount.

• Marginal note:Waiver of tax

  (3) If an individual would, but for this subsection, be required to pay a tax under subsection (2) in respect of a month, the Minister may waive or cancel all or part of the tax if the individual establishes to the satisfaction of the Minister that

  • (a) the cumulative excess amount on which the tax is based arose as a consequence of reasonable error; and

  • (b) reasonable steps are being taken to eliminate the cumulative excess amount.

Marginal note:Return and payment of tax

• 206 (1) Every person who is liable to pay tax under this Part for all or part of a calendar year shall,

  • (a) on or before the person’s filing-due date for the year, file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand; and

  • (b) on or before the person’s balance-due day for the year, pay to the Receiver General the amount of tax payable under this Part by the person for the year.

• Marginal note:Provisions applicable to Part

  (2) Subsections 150(2) and (3), sections 152 and 158 to 167 and Division J of Part I apply with any modifications that the circumstances require.

206.1 [Repealed, 2017, c. 33, s. 66]

206.2 [Repealed, 2017, c. 33, s. 66]

206.3 [Repealed, 2017, c. 33, s. 66]

206.4 [Repealed, 2017, c. 33, s. 66]

207 [Repealed, 2017, c. 33, s. 66]

PART XI.01Taxes in Respect of Registered Plans

Marginal note:Definitions

• 207.01 (1) The following definitions and the definitions in subsections 146(1) (other than the definition benefit), 146.1(1), 146.2(1), 146.3(1), 146.4(1) and 146.6(1) apply in this Part and Part XLIX of the Income Tax Regulations.

  advantage

  advantage, in relation to a registered plan, means

  • (a) any benefit, loan or indebtedness that is conditional in any way on the existence of the registered plan, other than

    • (i) a benefit derived from the provision of administrative or investment services in respect of the registered plan,

    • (ii) a loan or an indebtedness (including, in the case of a TFSA, a loan or an indebtedness in respect of which the conditions in subsection 146.2(4) or (4.1) are met) the terms and conditions of which are terms and conditions that persons dealing at arm’s length with each other would have entered into,

    • (iii) a payment out of or under the registered plan in satisfaction of all or part of a beneficiary’s or controlling individual’s interest in the registered plan,

    • (iv) the payment or allocation of any amount to the registered plan by the issuer, carrier or promoter,

    • (iv.1) an amount paid under or because of the Canada Disability Savings Act, the Canada Education Savings Act or under a designated provincial program, and

    • (v) a benefit provided under an incentive program that is — in a normal commercial or investment context in which parties deal with each other at arm’s length and act prudently, knowledgeably and willingly — offered to a broad class of persons, if it is reasonable to conclude that none of the main purposes of the program is to enable a person or partnership to benefit from the exemption from tax under Part I of any amount in respect of the plan;

  • (b) a benefit that is an increase in the total fair market value of the property held in connection with the registered plan if it is reasonable to consider, having regard to all the circumstances, that the increase is attributable, directly or indirectly, to

    • (i) a transaction or event or a series of transactions or events (other than a payment, not exceeding a reasonable amount, by the controlling individual of the registered plan where the payment would be described by paragraph 20(1)(bb) if the reference to “the taxpayer” in subparagraph (i) of that paragraph were read as a reference to “a controlling individual of a registered plan” and if the references to “the taxpayer” in subparagraph (ii) of that paragraph were read as references to “the registered plan”) that

      • (A) would not have occurred in a normal commercial or investment context in which parties deal with each other at arm’s length and act prudently, knowledgeably and willingly, and

      • (B) had as one of its main purposes to enable a person or a partnership to benefit from the exemption from tax under Part I of any amount in respect of the registered plan,

    • (ii) a payment received as, on account or in lieu of, or in satisfaction of, a payment

      • (A) for services provided by a person who is, or who does not deal at arm’s length with, the controlling individual of the registered plan, or

      • (B) of interest, of a dividend, of rent, of a royalty or of any other return on investment, or of proceeds of disposition, in respect of property (other than property held in connection with the registered plan) held by a person who is, or who does not deal at arm’s length with, the controlling individual of the registered plan,

    • (iii) a swap transaction, or

    • (iv) specified non-qualified investment income that has not been paid from the registered plan to its controlling individual within 90 days of receipt by the controlling individual of a notice issued by the Minister under subsection 207.06(4);

  • (c) a benefit that is income (determined without reference to paragraph 82(1)(b)), or a capital gain, that is reasonably attributable, directly or indirectly, to

    • (i) a prohibited investment in respect of the registered plan or any other registered plan of the controlling individual,

    • (ii) in the case of a registered plan that is not a TFSA, an amount received by the controlling individual of the registered plan, or by a person who does not deal at arm’s length with the controlling individual (if it is reasonable to consider, having regard to all the circumstances, that the amount was paid in relation to, or would not have been paid but for, property held in connection with the registered plan) and the amount was paid as, on account or in lieu of, or in satisfaction of, a payment

      • (A) for services provided by a person who is, or who does not deal at arm’s length with, the controlling individual of the registered plan, or

      • (B) of interest, of a dividend, of rent, of a royalty or of any other return on investment, or of proceeds of disposition, or

    • (iii) a deliberate over-contribution;

  • (d) a registered plan strip in respect of the registered plan; and

  • (e) a prescribed benefit. (avantage)

  allowable refund

  allowable refund of a person for a calendar year means the total of all amounts each of which is a refund, for the year, to which the person is entitled under subsection 207.04(4). (remboursement admissible)

  controlling individual

  controlling individual, of a registered plan, means

  • (a) the holder of a TFSA;

  • (b) a holder of a RDSP;

  • (c) a subscriber of a RESP;

  • (d) the annuitant of a RRIF or RRSP; or

  • (e) the holder of a FHSA. (particulier contrôlant)

  deliberate over-contribution

  deliberate over-contribution of an individual means a contribution made under a TFSA by the individual that results in, or increases, an excess TFSA amount, unless it is reasonable to conclude that the individual neither knew nor ought to have known that the contribution could result in liability for a penalty, tax or similar consequence under this Act. (cotisation excédentaire intentionnelle)

  designated amount

  designated amount of an individual means an amount, not exceeding the excess FHSA amount of the individual, designated by the individual in the prescribed form and manner that is

  • (a) a transfer in accordance with subparagraph 146.‍6(7)‍(b)‍(ii), to the extent that it does not exceed the total of all amounts transferred under paragraph 146(16)‍(a.‍2) to a FHSA under which the individual is the holder on or before the date of the designation less the total of all amounts previously designated under this paragraph; or

  • (b) a withdrawal from a FHSA under which the individual is the holder, to the extent that it does not exceed the total of all amounts contributed to a FHSA under which the individual is the holder on or before the date of the designation less the total of all amounts previously designated under this paragraph. (montant désigné)

  equity

  equity, of a corporation, trust or partnership, means

  • (a) in the case of a corporation, a share of the capital stock of the corporation;

  • (b) in the case of a trust, an income or capital interest in the trust; and

  • (c) in the case of a partnership, an interest as a member of the partnership. (droit sur l’actif)

  excess FHSA amount

  excess FHSA amount of an individual at a particular time in a taxation year means

  • (a) the amount determined by the formula

    A + B + C − D − E − F

    where

    A

    is

    • (i) nil, if the individual had not started their maximum participation period in the preceding taxation year, and

    • (ii) the individual’s excess FHSA amount determined at the end of the immediately preceding taxation year, in any other case;

    B

    is the total of all amounts each of which is a contribution made to a FHSA by the individual in the taxation year at or before the particular time;

    C

    is the total of all amounts transferred in the taxation year under paragraph 146(16)(a.2), at or before the particular time, to a FHSA under which the individual is the holder;

    D

    is the lesser of

    • (i) $8,000 plus an amount that would have been the individual’s FHSA carryforward for the taxation year if each amount that was included in that individual’s income under subsection 146.6(6) and could have been, immediately prior to the time it was received, a designated amount, had been designated by the individual as a designated amount, and

    • (ii) the amount determined by the formula

      $40,000 − G

      where

      G

      is the total of all amounts that were deducted, could have been deducted or would have been deductible by the individual under subsection 146.6(5) in respect of all preceding taxation years if

      • (A) no amounts were transferred under paragraph 146(16)(a.2) to a FHSA of the individual, and

      • (B) notwithstanding clause (A), an amount had been contributed by the individual to a FHSA in each preceding taxation year that is the amount by which the individual’s net RRSP-to-FHSA transfer amount at the end of that year exceeds the individual’s net RRSP-to-FHSA transfer amount at the start of that year;

    E

    is the total of all amounts each of which is a designated amount in respect of a transfer or withdrawal made by the individual in the taxation year before the particular time or an amount required to be included in computing the income of the individual under subsection 146.6(6) in the taxation year before the particular time; and

    F

    is the total of all amounts, each of which is the portion of an amount required to be included in computing the income of the individual under subsection 146.6(6) in any preceding taxation year, to the extent that it did not reduce what otherwise would have been the individual’s excess FHSA amount in any preceding taxation year; or

  • (b) where the Minister determines that the formula in paragraph (a) does not yield an appropriate result having regard to the circumstances of the individual, a lower amount that, in the Minister’s opinion, is appropriate in the circumstances. (excédent de CELIAPP)

  excess TFSA amount

  excess TFSA amount of an individual at a particular time in a calendar year means the amount, if any, determined by the formula

  A - B - C - D - E

  where

  A

  is the total of all amounts each of which is a contribution made under a TFSA by the individual in the calendar year and at or before the particular time, other than a contribution that is

  • (a) a qualifying transfer, or

  • (b) an exempt contribution;

  B

  is the individual’s unused TFSA contribution room at the end of the preceding calendar year;

  C

  is the total of all amounts each of which was a distribution made in the preceding calendar year under a TFSA of which the individual was the holder at the time of the distribution, other than a distribution that is

  • (a) a qualifying transfer, or

  • (b) a specified distribution;

  D

  is

  • (a) the TFSA dollar limit for the calendar year if, at any time in the calendar year, the individual is resident in Canada, and

  • (b) nil, in any other case; and

  E

  is the total of all amounts each of which is the qualifying portion of a distribution made in the calendar year and at or before the particular time under a TFSA of which the individual was the holder at the time of the distribution and, for this purpose, the qualifying portion of a distribution is

  • (a) nil, if the distribution is a qualifying transfer or a specified distribution, and

  • (b) in any other case, the lesser of

    • (i) the amount of the distribution, and

    • (ii) the amount that would be the individual’s excess TFSA amount at the time of the distribution if the amount of the distribution were nil. (excédent CÉLI)

  excluded property

  excluded property, at any time for a trust governed by a registered plan, means

  • (a) property described in paragraph 4900(1)(j.1) of the Income Tax Regulations;

  • (b) an equity of a mutual fund corporation, mutual fund trust or registered investment if

    • (i) either

      • (A) the equity is equity of a mutual fund corporation or mutual fund trust that derives all or substantially all its value from one or more mutual funds that are subject to, and substantially comply with, the requirements of National Instrument 81–102 Mutual Funds, as amended from time to time, of the Canadian Securities Administrators, or

      • (B) the corporation, trust or registered investment follows a reasonable policy of investment diversification,

    • (ii) the time is

      • (A) during the 24-month period that begins on the day on which the first taxation year of the corporation, trust or registered investment begins,

      • (B) during the 24-month period that ends on the day on which the last taxation year of the corporation, trust or registered investment ends, or

      • (C) where the equity is a share of the capital stock of a mutual fund corporation and the share derives all or substantially all its value from a particular mutual fund,

        • (I) during the 24-month period that begins on the day on which the particular mutual fund is established, or

        • (II) during the 24-month period that ends on the day on which the particular mutual fund is terminated,

    • (iii) it is reasonable to conclude that none of the main purposes of the structure of the corporation, trust or registered investment, or of the terms and conditions of the equity, is to accommodate transactions or events that could affect the fair market value of the property held by the trust governed by the registered plan in a manner that would not occur in a normal commercial or investment context in which parties deal with each other at arm’s length and act prudently, knowledgeably and willingly, and

    • (iv) it is reasonable to conclude that none of the main purposes of the incorporation, establishment or operation of the corporation, trust or registered investment, or of the particular mutual fund, is to benefit from this paragraph; or

  • (c) equity of a corporation, partnership or trust (in this paragraph referred to as the “investment entity”) if at that time

    • (i) the fair market value of the equity (in this paragraph referred to as the “arm’s length equity”) of the investment entity that is owned by persons who deal at arm’s length with the controlling individual of the registered plan is at least 90% of the fair market value of all the equity of the investment entity,

    • (ii) the total fair market value of the arm’s length equity and the debt of the investment entity that is owned by persons who deal at arm’s length with the controlling individual is at least 90% of the total fair market value of all the equity and debt of the investment entity,

    • (iii) the controlling individual, either alone or together with persons with whom the controlling individual does not deal at arm’s length, does not have the right to cast at least 10% of the votes, if any, that could be cast regarding the governance of the investment entity,

    • (iv) the specific terms and conditions of each share or unit of equity of the investment entity held by the trust governed by the registered plan are the same as, or substantially similar to, the terms and conditions of particular equity that is included in the arm’s length equity,

    • (v) the fair market value of the particular equity referred to in subparagraph (iv) is equal to at least 10% of the total fair market value of all equity of the investment entity having the specific terms and conditions referred to in subparagraph (iv) or terms and conditions that are substantially similar to those terms and conditions,

    • (vi) the controlling individual deals at arm’s length with the investment entity, and

    • (vii) it is reasonable to conclude that none of the main purposes of the structure of the investment entity, or of the terms and conditions of the equity, is to accommodate transactions or events that could affect the fair market value of the property held by the trust governed by the registered plan in a manner that would not occur in a normal commercial or investment context in which parties deal with each other at arm’s length and act prudently, knowledgeably and willingly. (bien exclu)

  exempt contribution

  exempt contribution means a contribution made in a calendar year under a TFSA by the survivor of an individual if

  • (a) the contribution is made during the period (in this definition referred to as the “rollover period”) that begins when the individual dies and that ends at the end of the first calendar year that begins after the individual dies (or at any later time that is acceptable to the Minister);

  • (b) a payment (in this definition referred to as the “survivor payment”) was made to the survivor during the rollover period, as a consequence of the individual’s death, directly or indirectly out of or under an arrangement that ceased, because of the individual’s death, to be a TFSA;

  • (c) the survivor designates, in prescribed form filed in prescribed manner within 30 days after the day on which the contribution is made (or at any later time that is acceptable to the Minister), the contribution in relation to the survivor payment; and

  • (d) the amount of the contribution does not exceed the least of

    • (i) the amount, if any, by which

      • (A) the amount of the survivor payment

      exceeds

      • (B) the total of all other contributions designated by the survivor in relation to the survivor payment,

    • (ii) the amount, if any, by which

      • (A) the total proceeds of disposition that would, if section 146.2 were read without reference to subsection 146.2(9), be determined in respect of the arrangement under paragraph 146.2(8)(a), (10)(a) or (11)(a), as the case may be,

      exceeds

      • (B) the total of all other exempt contributions in respect of the arrangement made by the survivor at or before the time of the contribution, and

    • (iii) if the individual had, immediately before the individual’s death, an excess TFSA amount or if payments described in paragraph (b) are made to more than one survivor of the individual, nil or the greater amount, if any, allowed by the Minister in respect of the contribution. (cotisation exclue)

  non-qualified investment

  non-qualified investment for a trust governed by a registered plan means property that is not a qualified investment for the trust. (placement non admissible)

  prohibited investment

  prohibited investment, at any time for a trust governed by a registered plan, means property (other than excluded property for the trust) that is at that time

  • (a) a debt of the controlling individual of the registered plan;

  • (b) a share of the capital stock of, an interest in, or a debt of

    • (i) a corporation, partnership or trust in which the controlling individual has a significant interest, or

    • (ii) a person or partnership that does not deal at arm’s length with the controlling individual;

  • (c) an interest (or, for civil law, a right) in, or a right to acquire, a share, interest or debt described in paragraph (a) or (b); or

  • (d) prescribed property. (placement interdit)

  qualified investment

  qualified investment for a trust governed by a FHSA or TFSA means

  • (a) an investment that would be described by any of paragraphs (a) to (d), (f) and (g) of the definition qualified investment in section 204 if the reference in that definition to “a trust governed by a deferred profit sharing plan or revoked plan” were read as a reference to “a trust governed by a FHSA or TFSA” and if that definition were read without reference to the words “with the exception of excluded property in relation to the trust”;

  • (b) a contract for an annuity issued by a licensed annuities provider if

    • (i) the trust is the only person who, disregarding any subsequent transfer of the contract by the trust, is or may become entitled to any annuity payments under the contract, and

    • (ii) the holder of the contract has a right to surrender the contract at any time for an amount that would, if reasonable sales and administration charges were ignored, approximate the value of funds that could otherwise be applied to fund future periodic payments under the contract; and

  • (c) a prescribed investment. (placement admissible)

  qualifying transfer

  qualifying transfer means the transfer of an amount from a TFSA of which a particular individual is the holder if

  • (a) the amount is transferred directly to another TFSA, the holder of which is the particular individual; or

  • (b) the amount is transferred directly to another TFSA, the holder of which is a spouse or common-law partner or former spouse or common-law partner of the particular individual, and the following conditions are satisfied:

    • (i) the individuals are living separate and apart at the time of the transfer, and

    • (ii) the transfer is made under a decree, order or judgment of a competent tribunal, or under a written separation agreement, relating to a division of property between the individuals in settlement of rights arising out of, or on the breakdown of, their marriage or common-law partnership. (transfert admissible)

  registered plan

  registered plan means a FHSA, RDSP, RESP, RRIF, RRSP or TFSA. (régime enregistré)

  registered plan strip

  registered plan strip, in respect of a registered plan that is not a TFSA, means the amount of a reduction in the fair market value of property held in connection with the registered plan, if the value is reduced as part of a transaction or event or a series of transactions or events one of the main purposes of which is to enable the controlling individual of the registered plan, or a person who does not deal at arm’s length with the controlling individual, to obtain a benefit in respect of property held in connection with the registered plan or to obtain a benefit as a result of the reduction, but does not include an amount that is

  • (a) included in the income of a person under section 146, 146.1, 146.3, 146.4 or 146.6;

  • (b) an excluded withdrawal under section 146.01 or 146.02;

  • (b.1) a qualifying withdrawal under section 146.6;

  • (b.2) a designated amount;

  • (c) described in subsection 146(16), 146.3(14.2) or 146.4(8);

  • (d) a distribution to a trust governed by a RESP under circumstances to which subparagraph 204.9(5)(c)(i) or (ii) applies;

  • (e) an accumulated income payment made to a RDSP under circumstances to which subsection 146.1(1.2) applies;

  • (f) a refund of payments under a RESP; or

  • (g) the non-taxable portion of a disability assistance payment made from a RDSP. (somme découlant d’un dépouillement de régime enregistré)

  restricted property

  restricted property[Repealed, 2009, c. 2, s. 68]

  RRSP strip

  RRSP strip[Repealed, 2017, c. 33, s. 68]

  specified distribution

  specified distribution means

  • (a) a distribution made under a TFSA to the extent that it is, or is reasonably attributable to, an amount that is

    • (i) an advantage in respect of the TFSA or any other TFSA of the holder,

    • (ii) specified non-qualified investment income,

    • (iii) an amount in respect of which tax was payable under Part I by a trust governed by the TFSA or any other TFSA of the holder, or

    • (iv) an amount described in subparagraph 207.06(1)(b)(ii); or

  • (b) a prescribed distribution. (distribution déterminée)

  specified non-qualified investment income

  specified non-qualified investment income, in respect of a registered plan and its controlling individual, means income (determined without reference to paragraph 82(1)(b)), or a capital gain, that is reasonably attributable, directly or indirectly, to an amount in respect of which tax was payable under Part I by a trust governed by the registered plan or by any other registered plan of the controlling individual. (revenu de placement non admissible déterminé)

  swap transaction

  swap transaction, in respect of a registered plan, means a transfer of property between the registered plan and its controlling individual or a person with whom the controlling individual does not deal at arm’s length, but does not include

  • (a) a payment out of or under the registered plan in satisfaction of all or part of the controlling individual’s interest in the registered plan;

  • (b) a payment into the registered plan that is

    • (i) a contribution, a premium or an amount transferred in accordance with paragraph 146.3(2)(f),

    • (ii) described in paragraph (a) or (b) of the definition contribution in subsection 146.1(1),

    • (iii) described in any of paragraphs (a) to (d) of the definition contribution in subsection 146.4(1), or

    • (iv) an amount transferred in accordance with paragraph 146(16)(a.2) or to which subsection 146.6(7) applies;

  • (c) a transfer of a prohibited investment or a non-qualified investment from the registered plan for consideration, in circumstances where the controlling individual is entitled to a refund under subsection 207.04(4) on the transfer;

  • (d) a transfer of property from one registered plan of a controlling individual to another registered plan of the controlling individual if

    • (i) both registered plans are RRIFs or RRSPs,

    • (ii) both registered plans are TFSAs,

    • (iii) both registered plans are RDSPs,

    • (iv) both registered plans are RESPs, or

    • (v) both registered plans are FHSAs;

  • (e) a transfer of a prohibited investment from the registered plan for consideration, if subsection (13) applies in respect of all or part of the consideration received by the registered plan;

  • (f) a transfer of property from the registered plan in consideration for the issuance of a debt obligation that is an excluded property for the trust governed by the registered plan; or

  • (g) a payment into the registered plan that is a payment of, or in satisfaction of, the principal amount of, or interest on, a debt obligation that is an excluded property for the trust governed by the registered plan. (opération de swap)

  TFSA dollar limit

  TFSA dollar limit for a calendar year means,

  • (a) for 2009 to 2012, $5,000;

  • (b) for 2013 and 2014, $5,500;

  • (c) for 2015, $10,000; and

  • (d) for each year after 2015, the amount (rounded to the nearest multiple of $500, or if that amount is equidistant from two such consecutive multiples, to the higher multiple) that is equal to $5,000 adjusted for each year after 2009 in the manner set out in section 117.1. (plafond CÉLI)

  transitional prohibited investment benefit

  transitional prohibited investment benefit, of a controlling individual for a taxation year, means the amount determined by the formula

  A – B

  where

  A

  is the total of all amounts each of which is income (determined without reference to paragraph 82(1)(b)) earned, or a capital gain realized, in the taxation year by a trust governed by a RRIF or RRSP of the controlling individual that

  • (a) is reasonably attributable, directly or indirectly, to a property that is a prohibited investment, and a transitional prohibited property, for the trust, and

  • (b) in the case of income, is earned after March 22, 2011 and, in the case of a capital gain, accrues after March 22, 2011; and

  B

  is the total of all amounts each of which is a capital loss (determined without reference to subparagraph 40(2)(g)(i) and subsection 40(3.4)) realized in the taxation year by a trust governed by a RRIF or RRSP of the controlling individual that

  • (a) is reasonably attributable, directly or indirectly, to a property that is a prohibited investment, and a transitional prohibited property, for the trust, and

  • (b) accrues after March 22, 2011. (bénéfice transitoire provenant d’un placement interdit)

  transitional prohibited property

  transitional prohibited property, at any time for a particular trust governed by a registered plan (other than a TFSA) of a controlling individual, means a property that is held by the particular trust at that time, that was held

  • (a) on March 22, 2011 by a trust governed by a RRIF or RRSP of the controlling individual and that was a prohibited investment for that trust on March 23, 2011; or

  • (b) on March 22, 2017 by a trust governed by a RDSP or RESP of the controlling individual and that was a prohibited investment for that trust on March 23, 2017. (bien interdit transitoire)

  unused TFSA contribution room

  unused TFSA contribution room of an individual at the end of a calendar year means,

  • (a) if the year is before 2009, nil;

  • (a.1) in circumstances where the Minister has, in accordance with section 207.06, waived or cancelled all or part of the liability imposed on the individual, the amount determined by the Minister; and

  • (b) in any other case, the positive or negative amount determined by the formula

    A + B + C - D

    where

    A

    is the individual’s unused TFSA contribution room at the end of the preceding calendar year,

    B

    is the total of all amounts each of which was a distribution made in the preceding calendar year under a TFSA of which the individual was the holder at the time of the distribution, other than a distribution that is

    • (i) a qualifying transfer, or

    • (ii) a specified distribution,

    C

    is

    • (i) the TFSA dollar limit for the calendar year, if at any time in the calendar year the individual is 18 years of age or older and resident in Canada, and

    • (ii) nil, in any other case, and

    D

    is the total of all amounts each of which is a contribution made under a TFSA by the individual in the calendar year, other than a contribution that is

    • (i) a qualifying transfer, or

    • (ii) an exempt contribution. (droits inutilisés de cotisation à un CÉLI)

• Marginal note:Interpretation

  (2) For the purposes of this section, income includes dividends described in section 83.

• Marginal note:Survivor as successor holder

  (3) If an individual’s survivor becomes the holder of a TFSA as a consequence of the individual’s death and, immediately before the individual’s death, the individual had an excess TFSA amount, the survivor is deemed (other than for the purposes of the definition exempt contribution) to have made, at the beginning of the month following the individual’s death, a contribution under a TFSA equal to the amount, if any, by which

  • (a) that excess TFSA amount

  exceeds

  • (b) the total fair market value immediately before the individual’s death of all property held in connection with arrangements that ceased, because of the individual’s death, to be TFSAs.

• Marginal note:Significant interest

  (4) An individual has a significant interest in a corporation, partnership or trust at any time if

  • (a) in the case of a corporation, the individual would, at that time, be a specified shareholder of the corporation if the references in the portion of the definition specified shareholder in subsection 248(1) before paragraph (a) to “in a taxation year” and “at any time in the year” were read as “at any time” and “at that time”, respectively;

  • (b) in the case of a partnership, the individual, or the individual together with persons and partnerships with which the individual does not deal at arm’s length, holds at that time interests as a member of the partnership that have a fair market value of 10% or more of the fair market value of the interests of all members in the partnership; and

  • (c) in the case of a trust, the individual, or the individual together with persons and partnerships with which the individual does not deal at arm’s length, holds at that time interests as a beneficiary (in this paragraph, as defined in subsection 108(1)) under the trust that have a fair market value of 10% or more of the fair market value of the interests of all beneficiaries under the trust.

• Marginal note:Obligation of issuer

  (5) The issuer, carrier or promoter of a registered plan shall exercise the care, diligence and skill of a reasonably prudent person to minimize the possibility that a trust governed by the registered plan holds a non-qualified investment.

• Marginal note:Deemed disposition and reacquisition of investments

  (6) If, at any time, a property held by a trust governed by a registered plan becomes, or ceases to be, a prohibited investment or non-qualified investment for the trust, the trust is deemed to have disposed of the property immediately before that time for proceeds of disposition equal to the fair market value of the property at that time and to have reacquired the property at that time at a cost equal to that fair market value.

• Marginal note:Adjusted cost base

  (7) For the purpose of computing the adjusted cost base to a trust governed by a registered plan (other than a TFSA) of a property that is a transitional prohibited property for the trust, the cost to the trust of the property until the property is disposed of by the trust is deemed to be equal to the fair market value of the property,

  • (a) in the case of a RRIF or RRSP, at the end of March 22, 2011; and

  • (b) in the case of a RDSP or RESP, at the end of March 22, 2017.

• Marginal note:Prohibited investment status

  (8) Subsection (9) applies in respect of a property if

  • (a) the property would, in the absence of subsection (9), have ceased at any time (in this subsection and subsection (9) referred to as the “relevant time”) to be a prohibited investment for a trust governed by a registered plan (other than a TFSA) of a controlling individual;

  • (b) the property is a transitional prohibited property for the trust immediately before the relevant time;

  • (c) in the case of a property held under a RRIF or RRSP, the controlling individual elected under subsection 207.05(4); and

  • (d) the controlling individual elects in prescribed form that subsection (9) apply in respect of the property and the election is filed with the Minister on or before the day that is 90 days after the end of the taxation year of the controlling individual that includes the relevant time.

• Marginal note:Prohibited investment status

  (9) If this subsection applies in respect of a property, the property is deemed to be a prohibited investment at and after the relevant time for every trust governed by a registered plan (other than a TFSA) of the controlling individual referred to in paragraph (8)(a).

• Marginal note:Breakdown of marriage or common-law partnership

  (10) Subsection (11) applies in respect of a property if

  • (a) the property is transferred at any time (in this subsection and subsection (11) referred to as the “transfer time”) by a trust (in this subsection and subsection (11) referred to as the “transferor trust”) governed by a RRIF or RRSP of a controlling individual (in this subsection and subsection (11) referred to as the “transferor”) under paragraph 146(16)(b) or subsection 146.3(14) to a trust (in subsection (11) referred to as the “recipient trust”) governed by a RRIF or RRSP of which the spouse or common-law partner or former spouse or common-law partner (in this subsection and subsection (11) referred to as the “recipient”) of the transferor is the controlling individual;

  • (b) the property is a prohibited investment, and a transitional prohibited property, for the transferor trust immediately before the transfer time;

  • (c) the transferor elected under subsection 207.05(4);

  • (d) the transferor and the recipient — or, if the property is transferred as a consequence of the death of the transferor, the transferor’s legal representative and the recipient — jointly elect in prescribed form that subsection (11) apply in respect of the property and the election is filed with the Minister on or before the day that is 90 days after the end of the

    • (i) recipient’s taxation year that includes the transfer time, if the property is transferred as a consequence of the death of the transferor, or

    • (ii) transferor’s taxation year that includes the transfer time, in any other case; and

  • (e) an amount (in subsection (11) referred to as the “designated amount”) is designated on the prescribed form described in paragraph (d) in respect of the property that

    • (i) is not less than the adjusted cost base to the transferor trust of the property immediately before the transfer time, and

    • (ii) does not exceed the greater of the amount determined under subparagraph (i) and the fair market value of the property at the transfer time.

• Marginal note:Breakdown of marriage or common-law partnership

  (11) If this subsection applies in respect of a property,

  • (a) the property is deemed to be, at and after the transfer time, a property that was held on March 22, 2011 by a trust governed by a RRIF or RRSP of the recipient and that was a prohibited investment for the trust on March 23, 2011;

  • (b) where the property would, in the absence of this paragraph, not be a prohibited investment for the recipient trust immediately after the transfer time, the property is deemed to be a prohibited investment at and after the transfer time for every trust governed by a RRIF or RRSP of the recipient;

  • (c) the recipient is deemed to have elected under subsection 207.05(4); and

  • (d) notwithstanding any other provision of this Act, the designated amount is deemed to be

    • (i) the proceeds of disposition to the transferor trust from the transfer described in paragraph (10)(a), and

    • (ii) the cost of the property to a trust governed by a RRIF or RRSP of the recipient until the property is disposed of by the trust.

• Marginal note:Exchange of property

  (12) Subsection (13) applies in respect of a property other than money if

  • (a) the property is acquired at any time (in this subsection and subsection (13) referred to as the “exchange time”) by a trust (in this section and subsection (13) referred to as the “exchanging trust”) governed by a registered plan (other than a TFSA) of a controlling individual in exchange for another property (in this subsection referred to as the “exchanged property”) in a transaction to which any of section 51, subsection 85(1) and sections 85.1, 86 and 87 apply;

  • (b) the exchanged property is a prohibited investment, and a transitional prohibited property, for the exchanging trust immediately before the exchange time;

  • (c) the property is, or would be, if subsection 4900(14) of the Income Tax Regulations were read without reference to its paragraph (b), a qualified investment for the exchanging trust immediately after the exchange time; and

  • (d) in the case of a property held under a RRIF or RRSP, the controlling individual elected under subsection 207.05(4).

• Marginal note:Exchange of property

  (13) If this subsection applies in respect of a property,

  • (a) other than for the purposes of subsection (7), the property is deemed to be, at and after the exchange time, a property,

    • (i) in the case of a trust governed by a RRIF or RRSP, that was

      • (A) held on March 22, 2011 by a trust governed by a RRIF or RRSP of the controlling individual referred to in subsection (12), and

      • (B) a prohibited investment for the trust on March 23, 2011, and

    • (ii) in the case of a trust governed by a RDSP or RESP, that was

      • (A) held on March 22, 2017 by a trust governed by a RDSP or RESP of the controlling individual referred to in subsection (12), and

      • (B) a prohibited investment for the trust on March 23, 2017; and

  • (b) if the property would, in the absence of this paragraph, not be a prohibited investment for the exchanging trust immediately after the exchange time, the property is deemed to be a prohibited investment at and after the exchange time for every trust governed by a registered plan (other than a TFSA) of the controlling individual.