Technical Tax Amendments Act, 2012 (S.C. 2013, c. 34)
Full Document:
Assented to 2013-06-26
92. (1) The portion of subsection 13(5.2) of the Act before paragraph (a) is replaced by the following:
Marginal note:Deemed cost and depreciation
(5.2) If, at any time, a taxpayer has acquired a capital property that is depreciable property or real or immovable property in respect of which, before that time, the taxpayer or any person with whom the taxpayer was not dealing at arm’s length was entitled to a deduction in computing income in respect of any amount paid or payable for the use of, or the right to use, the property and the cost or the capital cost (determined without reference to this subsection) at that time of the property to the taxpayer is less than the fair market value thereof at that time determined without reference to any option with respect to that property, for the purposes of this section, section 20 and any regulations made under paragraph 20(1)(a), the following rules apply:
(2) Subsection 13(5.3) of the Act is replaced by the following:
Marginal note:Deemed recapture
(5.3) If, at any time in a taxation year, a taxpayer has disposed of a capital property that is an option with respect to depreciable property or real or immovable property in respect of which the taxpayer or any person with whom the taxpayer was not dealing at arm’s length was entitled to a deduction in computing income in respect of any amount paid for the use of, or the right to use, the property, for the purposes of this section, the amount, if any, by which the proceeds of disposition to the taxpayer of the option exceed the taxpayer’s cost in respect thereof is deemed to be an excess referred to in subsection (1) in respect of the taxpayer for the year.
(3) Paragraph 13(7.5)(c) of the Act is replaced by the following:
(c) if a taxpayer acquires an intangible property, or for civil law an incorporeal property, as a consequence of making a payment to which paragraph (a) applies or incurring a cost to which paragraph (b) applies,
(i) the property referred to in paragraph (a) or (b) is deemed to include the intangible or incorporeal property, and
(ii) the portion of the capital cost referred to in paragraph (a) or (b) that applies to the intangible or incorporeal property is deemed to be the amount determined by the formula
A × B/C
where
- A
- is the lesser of the amount of the payment made or cost incurred and the amount determined for C,
- B
- is the fair market value of the intangible or incorporeal property at the time the payment was made or the cost was incurred, and
- C
- is the fair market value at the time the payment was made or the cost was incurred of all intangible or incorporeal properties acquired as a consequence of making the payment or incurring the cost; and
93. (1) Paragraph (c) of the definition “eligible capital expenditure” in subsection 14(5) of the Act is replaced by the following:
(c) that is the cost of, or any part of the cost of,
(i) tangible property, or for civil law corporeal property, of the taxpayer,
(ii) intangible property, or for civil law incorporeal property, that is depreciable property of the taxpayer,
(iii) property in respect of which any deduction (otherwise than under paragraph 20(1)(b)) is permitted in computing the taxpayer’s income from the business or would be so permitted if the taxpayer’s income from the business were sufficient for the purpose, or
(iv) an interest in, or for civil law a right in, or a right to acquire any property described in any of subparagraphs (i) to (iii)
(2) Subparagraph (f)(iv) of the definition “eligible capital expenditure” in subsection 14(5) of the Act is replaced by the following:
(iv) an interest in, or for civil law a right in, or a right to acquire any property described in any of subparagraphs (i) to (iii).
94. The portion of subsection 16.1(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Leasing properties
16.1 (1) Where a taxpayer (in this section referred to as the “lessee”) leases tangible property, or for civil law corporeal property, that is not prescribed property and that would, if the lessee acquired the property, be depreciable property of the lessee, from a person resident in Canada other than a person whose taxable income is exempt from tax under this Part, or from a non-resident person who holds the lease in the course of carrying on a business through a permanent establishment in Canada, as defined by regulation, any income from which is subject to tax under this Part, who owns the property and with whom the lessee was dealing at arm’s length (in this section referred to as the “lessor”) for a term of more than one year, if the lessee and the lessor jointly elect in prescribed form filed with their returns of income for their respective taxation years that include the particular time when the lease began, the following rules apply for the purpose of computing the income of the lessee for the taxation year that includes the particular time and for all subsequent taxation years:
95. (1) Paragraph 18(2)(f) of the Act is replaced by the following:
(f) in the case of a corporation whose principal business is the leasing, rental or sale, or the development for lease, rental or sale, or any combination thereof, of real or immovable property owned by it, to or for a person with whom the corporation is dealing at arm’s length, the corporation’s base level deduction for the particular year.
(2) Paragraphs 18(3.4)(a) and (b) of the Act are replaced by the following:
(a) a corporation whose principal business is throughout the year the leasing, rental or sale, or the development for lease, rental or sale, or any combination thereof, of real or immovable property owned by it, to or for a person with whom the corporation is dealing at arm’s length, or
(b) a partnership
(i) each member of which is a corporation described in paragraph (a), and
(ii) the principal business of which is throughout the year the leasing, rental or sale, or the development for lease, rental or sale, or any combination thereof, of real or immovable property held by it, to or for a person with whom each member of the partnership is dealing at arm’s length,
96. (1) Paragraph 18.1(9)(b) of the French version of the Act is replaced by the following:
b) au cours de la période commençant au moment de la disposition ou de l’extinction et se terminant 30 jours après ce moment, un contribuable — qui avait une part directe ou indirecte dans le droit — a une autre semblable part dans un autre droit aux produits, laquelle autre part est un abri fiscal ou un abri fiscal déterminé au sens de l’article 143.2.
(2) Subparagraph 18.1(10)(b)(v) of the French version of the Act is replaced by the following:
(v) en cas d’application du paragraphe (9), le début d’une période de 30 jours tout au long de laquelle aucun contribuable ayant eu une part directe ou indirecte dans le droit n’a une autre semblable part dans un autre droit aux produits, laquelle autre part est un abri fiscal ou un abri fiscal déterminé au sens de l’article 143.2.
97. (1) Subparagraph 20(1)(m)(iii) of the Act is replaced by the following:
(iii) periods for which rent or other amounts for the possession or use of land or of chattels or movables have been paid in advance, or
(2) Paragraph 20(1)(n) of the Act is replaced by the following:
Marginal note:Reserve for unpaid amounts
(n) if an amount included in computing the taxpayer’s income from the business for the year or for a preceding taxation year in respect of property sold in the course of the business is payable to the taxpayer after the end of the year and, except where the property is real or immovable property, all or part of the amount was, at the time of the sale, not due until at least two years after that time, a reasonable amount as a reserve in respect of any part of the amount that can reasonably be regarded as a portion of the profit from the sale;
(3) The portion of subsection 20(11) of the Act before paragraph (a) is replaced by the following:
Marginal note:Foreign taxes on income from property exceeding 15%
(11) In computing the income of an individual from a property other than real or immovable property for a taxation year after 1975 that is income from a source outside Canada, there may be deducted the amount, if any, by which,
(4) The portion of subsection 20(21) of the Act before paragraph (a) is replaced by the following:
Marginal note:Debt obligation
(21) If a taxpayer has in a particular taxation year disposed of a property that is an interest in, or for civil law a right in, a debt obligation for consideration equal to its fair market value at the time of disposition, there may be deducted in computing the taxpayer’s income for the particular year the amount, if any, by which
98. (1) The portion of subsection 20.1(1) of the French version of the Act before paragraph (a) is replaced by the following:
Marginal note:Argent emprunté pour tirer un revenu d’un bien
20.1 (1) Le contribuable qui, à un moment donné, cesse d’utiliser de l’argent emprunté en vue de tirer un revenu d’une immobilisation (sauf un bien immeuble ou réel ou un bien amortissable) est réputé continuer à ainsi utiliser la fraction de l’argent emprunté qui correspond à l’excédent visé à l’alinéa b), dans la mesure où cette fraction reste à rembourser après ce moment, si les conditions ci-après sont réunies :
(2) Paragraph 20.1(1)(a) of the English version of the Act is replaced by the following:
(a) at any time after 1993 borrowed money ceases to be used by a taxpayer for the purpose of earning income from a capital property (other than real or immovable property or depreciable property), and
99. (1) Paragraph 35(1)(a) of the Act is replaced by the following:
(a) is received in a taxation year by an individual as consideration for the disposition by the individual to the corporation of a mining property or an interest, or for civil law a right, therein acquired by the individual as a result of the individual’s efforts as a prospector, either alone or with others, or
(2) Subparagraph 35(1)(b)(ii) of the Act is replaced by the following:
(ii) as consideration for the disposition by the person referred to in subparagraph (i) to the corporation of a mining property or an interest, or for civil law a right, therein acquired under the arrangement under which that person made the advance or paid the expenses, or if the prospector’s employee, acquired by the person through the employee’s efforts,
(3) Paragraphs 35(1)(e) and (f) of the Act are replaced by the following:
(e) notwithstanding subdivision c, in computing the cost to the individual, person or partnership, as the case may be, of the share, no amount shall be included in respect of the disposition of the mining property or the interest, or for civil law the right, therein, as the case may be,
(f) notwithstanding sections 66 and 66.2, in computing the cost to the corporation of the mining property or the interest, or for civil law the right, therein, as the case may be, no amount shall be included in respect of the share, and
- Date modified: