Government of Canada / Gouvernement du Canada
Symbol of the Government of Canada

Search

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

Full Document:  

Act current to 2021-09-11 and last amended on 2021-07-01. Previous Versions

PART X.4Tax in Respect of Overpayments to Registered Education Savings Plans (continued)

Marginal note:Tax payable by subscribers

  •  (1) Every subscriber under a registered education savings plan shall pay a tax under this Part in respect of each month equal to 1% of the amount, if any, by which

    • (a) the total of all amounts each of which is the subscriber’s gross cumulative excess at the end of the month in respect of an individual

    exceeds

    • (b) the total of all amounts each of which is the portion of such an excess that has been withdrawn from a registered education savings plan before the end of the month.

  • Marginal note:Waiver of tax

    (2) If a subscriber under a registered education savings plan would, but for this subsection, be required to pay a tax in respect of a month under subsection 204.91(1) in respect of an individual, the Minister may waive or cancel all or part of the tax where it is just and equitable to do so having regard to all the circumstances, including

    • (a) whether the tax arose as a consequence of reasonable error;

    • (b) whether, as a consequence of one or more transactions or events to which subsection 204.9(4) or 204.9(5) applies, the tax is excessive; and

    • (c) the extent to which further contributions could be made into registered education savings plans in respect of the individual before the end of the month without causing additional tax to be payable under this Part if this Part were read without reference to this subsection.

  • Marginal note:Marriage or common-law partnership breakdown

    (3) If at any time an individual (in this subsection referred to as the “former subscriber”) ceases to be a subscriber under a registered education savings plan as a consequence of the settlement of rights arising out of, or on the breakdown of, the marriage or common-law partnership of the former subscriber and another individual (in this subsection referred to as the “current subscriber”) who is a subscriber under the plan immediately after that time, for the purpose of determining tax payable under this Part in respect of a month that ends after that time, each contribution made before that time into the plan by or on behalf of the former subscriber is deemed to have been made into the plan by the current subscriber and not by or on behalf of the former subscriber.

  • Marginal note:Deceased subscribers

    (4) For the purpose of applying this section where a subscriber has died, the subscriber’s estate is deemed to be the same person as, and a continuation of, the subscriber for each month that ends after the death.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1994, c. 7, Sch. II, s. 165
  • 1998, c. 19, s. 58
  • 2000, c. 12, s. 142

Marginal note:Return and payment of tax

 Every person who is liable to pay tax under this Part in respect of a month in a year shall, within 90 days after the end of the year,

  • (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor;

  • (b) estimate in the return the amount of tax, if any, payable under this Part by the person in respect of each month in the year; and

  • (c) pay to the Receiver General the amount of tax, if any, payable by the person under this Part in respect of each month in the year.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1994, c. 7, Sch. II, s. 165

Marginal note:Provisions applicable to Part

 Subsections 150(2) and 150(3), sections 152, 158 and 159, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part, with such modifications as the circumstances require.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1994, c. 7, Sch. II, s. 165

PART X.5Payments Under Registered Education Savings Plans

Marginal note:Definitions

  •  (1) The definitions in subsection 146.1(1) apply for the purposes of this Part, except that the definition subscriber in that subsection shall be read without reference to paragraph (c).

  • Marginal note:Charging provision

    (2) Every person (other than a public primary caregiver that is exempt from tax under Part I) shall pay a tax under this Part for each taxation year equal to the amount determined by the formula

    (A + B - C) × D

    where

    A
    is the total of all amounts each of which is an accumulated income payment made at any time that is
    • (a) either

      • (i) under a registered education savings plan under which the person is a subscriber at that time, or

      • (ii) under a registered education savings plan under which there is no subscriber at that time, where the person has been a spouse or common-law partner of an individual who was a subscriber under the plan, and

    • (b) included in computing the person’s income under Part I for the year;

    B
    is the total of all amounts each of which is an accumulated income payment that is
    • (a) not included in the value of A in respect of the person for the year, and

    • (b) included in computing the person’s income under Part I for the year;

    C
    is the lesser of
    • (a) the lesser of the value of A in respect of the person for the year and the total of all amounts each of which is an amount deducted under subsection 146(5) or 146(5.1) in computing the person’s income under Part I for the year, and

    • (b) the amount, if any, by which $50,000 exceeds the total of all amounts each of which is an amount determined under paragraph (a) in respect of the person for a preceding taxation year; and

    D
    is
    • (a) where a tax, similar to the tax provided under this Part, is payable by the person for the year under a law of the province of Quebec, 12%, and

    • (b) in any other case, 20%.

  • Marginal note:Return and payment of tax

    (3) Every person who is liable to pay tax under this Part for a taxation year shall, on or before the person’s filing-due date for the year,

    • (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor;

    • (b) estimate in the return the amount of tax payable under this Part by the person for the year; and

    • (c) pay to the Receiver General the amount of tax payable under this Part by the person for the year.

  • Marginal note:Administrative rules

    (4) Subsections 150(2) and 150(3), sections 152, 155 to 156.1 and 158 to 167 and Division J of Part I apply with any modifications that the circumstances require.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 1998, c. 19, s. 59
  • 1999, c. 22, s. 72
  • 2000, c. 12, s. 142
  • 2013, c. 34, s. 338

PART XITax in Respect of Advanced Life Deferred Annuity

Marginal note:Definitions

  •  (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.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • R.S., 1985, c. 1 (5th Supp.), s. 205
  • 2005, c. 30, s. 14
  • 2007, c. 35, s. 120
  • 2010, c. 12, s. 20
  • 2017, c. 33, s. 66
  • 2021, c. 23, s. 49
 
Date modified: