Income Tax Regulations (C.R.C., c. 945)

Farm Support Payments

• 234 (1) Every government, municipality or municipal or other public body (in sections 235 and 236 referred to as the “government payer”) or producer organization or association that makes a payment of an amount that is a farm support payment (other than an amount paid out of a net income stabilization account) to a person or partnership shall make an information return in prescribed form in respect of the amount.

• (2) For the purposes of subsection (1) farm support payment includes

  • (a) a payment that is computed with respect to an area of farm land;

  • (b) a payment that is made in respect of a unit of farm commodity grown or disposed of or a farm animal raised or disposed of; and

  • (c) a rebate of, or compensation for, all or a portion of

    • (i) a cost or capital cost incurred in respect of farming, or

    • (ii) unsowed or unplanted land or crops, or destroyed crops, farm animals or other farm output.

Identifier Information

235 Every corporation or trust for which an information return is required to be made under these Regulations by a government payer or by a producer organization or association shall provide its legal name, address and income tax identification number to the government payer or the producer organization or association, as the case may be.

236 Every person who is a member of a partnership for which an information return is required to be made under these Regulations by a government payer or by a producer organization or association shall provide the government payer or the producer organization or association, as the case may be, with the following information:

• (a) the person’s legal name, address and Social Insurance Number, or, where the person is a trust or is not an individual, the person’s income tax identification number; and

• (b) the partnership’s name and business address.

Contract for Goods and Services

• 237 (1) The definitions in this subsection apply in this section.

  federal body

  federal body means a department or a Crown corporation, within the meaning of section 2 of the Financial Administration Act. (organisme fédéral)

  payee

  payee means a person or partnership to whom an amount is paid or credited in respect of goods for sale or lease, or services rendered, by or on behalf of the person or the partnership. (bénéficiaire)

• (2) A federal body that pays or credits an amount to a payee shall file an information return in prescribed form in respect of the amount on or before March 31 in each year in respect of the preceding calendar year.

• (3) Subsection (2) does not apply in respect of an amount

  • (a) all or substantially all of which is paid or credited in the year in respect of goods for sale or lease by the payee;

  • (b) to which section 212 of the Act applies;

  • (c) that is not required to be included in computing the income of the payee, if the payee is an employee of the federal body;

  • (d) that is paid or credited in respect of services rendered outside Canada by a payee who was not resident in Canada during the period in which the services were rendered; or

  • (e) that is paid or credited in respect of a program administered under the Witness Protection Program Act or any other similar program.

Reporting of Payments in Respect of Construction Activities

• 238 (1) In this section, construction activities includes the erection, excavation, installation, alteration, modification, repair, improvement, demolition, destruction, dismantling or removal of all or any part of a building, structure, surface or sub-surface construction, or any similar property.

• (2) Every person or partnership that pays or credits, in a reporting period, an amount in respect of goods or services rendered on their behalf in the course of construction activities shall make an information return in the prescribed form in respect of that amount, if the person’s or partnership’s business income for that reporting period is derived primarily from those activities.

• (3) The reporting period may be either on a calendar year basis or a fiscal period basis. Once a period is chosen, it cannot be changed for subsequent years, unless the Minister authorizes it.

• (4) The return shall be filed within six months after the end of the reporting period to which it pertains.

• (5) Subsection (2) does not apply in respect of an amount

  • (a) all of which is paid or credited in the reporting period in respect of goods for sale or lease by the person or partnership;

  • (b) to which section 212 of the Act applies; or

  • (c) that is paid or credited in respect of services rendered outside Canada by a person or partnership who was not resident in Canada during the period in which the services were rendered.

PART IIIAnnuities and Life Insurance Policies

Capital Element of Annuity Payments

• 300 (1) For the purposes of paragraphs 32.1(3)(b) and 60(a) of the Act, where an annuity is paid under a contract (other than an income-averaging annuity contract or an annuity contract purchased pursuant to a deferred profit sharing plan or pursuant to a plan referred to in subsection 147(15) of the Act as a “revoked plan”) at a particular time, that part of the annuity payment determined in prescribed manner to be a return of capital is that proportion of a taxpayer’s interest in the annuity payment that the adjusted purchase price of the taxpayer’s interest in the contract at that particular time is of his interest, immediately before the commencement under the contract of payments to which paragraph 56(1)(d) of the Act applies, in the total of the payments

  • (a) to be made under the contract, in the case of a contract for a term of years certain; or

  • (b) expected to be made under the contract, in the case of a contract under which the continuation of the payments depends in whole or in part on the survival of an individual.

• (1.1) For the purposes of subsections (1) and (2), “annuity payment” does not include any portion of a payment under a contract the amount of which cannot be reasonably determined immediately before the commencement of payments under the contract except where the payment of such portion cannot be so determined because the continuation of the annuity payments under the contract depends in whole or in part on the survival of an individual.

• (2) For the purposes of this section, if the continuance of the annuity payments under a contract depends in whole or in part on the survival of an individual,

  • (a) the total of the payments expected to be made under the contract is

    • (i) in the case of a contract that provides for equal payments and does not provide for a guaranteed period of payment, to be equal to the product obtained by multiplying the total of the annuity payments expected to be received throughout a year under the contract by the complete expectations of life determined

      • (A) using the table of mortality known as the 1971 Individual Annuity Mortality Table as published in Volume XXIII of the Transactions of the Society of Actuaries, if the annuity rates in respect of the contract were fixed and determined before 2017, and

        • (I) annuity payments under the contract commenced before 2017, or

        • (II) on December 31, 2016, the contract would be a prescribed annuity contract if paragraph 304(1)(c) were read without reference to its subparagraph (i) and the contract cannot be terminated other than on the death of an individual on whose life payments under the contract are contingent, and

      • (B) in any other case, using the table of mortality known as the Annuity 2000 Basic Table as published in the Transactions of Society of Actuaries, 1995–96 Reports, and

    • (ii) in any other case, to be calculated in accordance with subparagraph (i) with such modifications as the circumstances may require;

  • (b) the age of the individual on any particular date as of which a calculation is being made is

    • (i) if the life insured was determined by the insurer that issued the contract to be a substandard life at the time the contract was issued and the Annuity 2000 Basic Table as published in the Transactions of Society of Actuaries, 1995–96 Reports applies to determine the total of the payments expected to be made under the contract, the age that is equal to the total of the age used for the purpose of determining the annuity rate under the policy at the date of issue of the contract and the number determined by subtracting the calendar year in which the contract was issued from the calendar year in which the particular date occurs, and

    • (ii) in any other case, determined by subtracting the calendar year of the individual’s birth from the calendar year in which the particular date occurs; and

  • (c) if, in the event of the death of the individual before the annual payments total a stated sum, the contract provides that the unpaid balance of the stated sum is to be paid in a lump sum or instalments, then for the purpose of determining the expected term of the contract, the contract is deemed to provide for the continuance of the payments under the contract for a minimum term certain equal to the nearest whole number of years required to complete the payment of the stated sum.

• (3) Where

  • (a) an annuity contract is a life annuity contract entered into before November 17, 1978 under which the annuity payments commence on the death of an individual,

  • (a.1) [Repealed, SOR/83-865, s. 1]

  • (b) an annuity contract (other than an annuity contract described in paragraph (a)) is

    • (i) a life annuity contract entered into before October 23, 1968, or

    • (ii) any other annuity contract entered into before January 4, 1968,

    under which the annuity payments commence

    • (iii) on the expiration of a term of years, and

    • (iv) before the later of January 1, 1970 and the tax anniversary date of the annuity contract,

  the adjusted purchase price of a taxpayer’s interest in the annuity contract shall be

  • (c) the lump sum, if any, that the person entitled to the annuity payments might have accepted in lieu thereof, at the date the annuity payments commence;

  • (d) if no lump sum described in paragraph (c) is provided for in the contract, the sum ascertainable from the contract as the present value of the annuity at the date the annuity payments commence; and

  • (e) if no lump sum described in paragraph (c) is provided for in the contract and no sum is ascertainable under paragraph (d),

    • (i) in the case of a contract issued under the Government Annuities Act, the premiums paid, accumulated with interest at the rate of four per cent per annum to the date the annuity payments commence, and

    • (ii) in the case of any other contract, the present value of the annuity payments at the date on which payments under the contract commence, computed by applying

      • (A) a rate of interest of four per cent per annum where the payments commence before 1972 and 5 1/2 per cent per annum where the payments commence after 1971, and

      • (B) the provisions of subsection (2) where the payments depend on the survival of a person.

• (4) Where an annuity contract would be described in paragraph (3)(b) if the reference in subparagraph (iv) thereof to “before the later of” were read as a reference to “on or after the later of”, the adjusted purchase price of a taxpayer’s interest in the annuity contract at a particular time shall be the greater of

  • (a) the aggregate of

    • (i) the amount that would be determined in respect of that interest under paragraph (3)(c), (d) or (e), as the case may be, if the date referred to therein was the tax anniversary date of the contract and not the date the annuity payments commence, and

    • (ii) the adjusted purchase price that would be determined in respect of that interest if the expression “before that time” in the descriptions of A, B, C, D and H in the definition adjusted cost basis in subsection 148(9) of the Act were read as “before that time and after the tax anniversary date”; and

  • (b) the amount determined under paragraph (2)(b) in respect of that interest.

Life Annuity Contracts

• 301 (1) For the purposes of this Part and section 148 of the Act, life annuity contract means a contract under which a person authorized under the laws of Canada or of a province to carry on in Canada an annuities business agrees to make annuity payments to one person or partnership (in this section referred to as “the annuitant”) or jointly to two or more annuitants, which annuity payments are, under the terms of the contract,

  • (a) to be paid annually or at more frequent periodic intervals;

  • (b) to commence on a specified day; and

  • (c) to continue throughout the lifetime of one or more individuals (each of whom is referred to in this section as “the identified individual”).

• (2) For the purposes of subsection (1), a contract shall not fail to be a life annuity contract by reason that

  • (a) the contract provides that the annuity payments may be assigned by the annuitant or owner;

  • (b) the contract provides for annuity payments to be made for a period ending on the death of the identified individual or for a specified period of not less than 10 years, whichever is the lesser;

  • (c) the contract provides for annuity payments to be made for a specified period or throughout the lifetime of the identified individual, whichever is longer, to the annuitant and, if the specified period is longer, to a specified person after that period;

  • (d) the contract provides, in addition to the annuity payments to be made throughout the lifetime of the identified individual, for a payment to be made on the death of the identified individual;

  • (e) the contract provides that the date

    • (i) on which the annuity payments commence, or

    • (ii) on which the contract holder becomes entitled to proceeds of the disposition,

    may be changed with respect to the whole contract or any portion thereof at the option of the annuitant or owner; or

  • (f) the contract provides that all or a portion of the proceeds payable at any particular time under the contract may be received in the form of an annuity contract other than a life annuity contract.