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

Search

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

Full Document:  

Regulations are current to 2021-10-07 and last amended on 2021-08-12. Previous Versions

PART XCFinancial Institutions — Prescribed Entities and Properties

Prescribed Person not a Financial Institution

 For the purposes of paragraph (e) of the definition financial institution in subsection 142.2(1) of the Act, the following are prescribed persons:

  • (a) the Business Development Bank of Canada;

  • (b) BDC Capital Inc.; and

  • (c) a trust, at any particular time, if at that particular time

    • (i) the trust is a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a) of the Act),

    • (ii) the trust is deemed, under paragraph 138.1(1)(a) of the Act, to have been created at a time that is not more than two years before that particular time, and

    • (iii) the cost of the trustee’s interest (as determined by paragraph 138.1(1)(c) and (d) of the Act) in the trust does not exceed $5,000,000.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2009, c. 2, s. 118
  • 2014, c. 20, s. 37

Prescribed Property not Mark-to-Market Property

  •  (1) In this section, qualified small business corporation, at any time, means a corporation in respect of which the following conditions are satisfied at that time:

    • (a) the corporation is a Canadian-controlled private corporation;

    • (b) the corporation either is an eligible corporation (as defined in subsection 5100(1)) or would be an eligible corporation if the definition eligible corporation in subsection 5100(1) were read without reference to its paragraph (e);

    • (c) the carrying value of the total assets of the corporation and all corporations related to it (determined in accordance with generally accepted accounting principles on a consolidated or combined basis, where applicable) does not exceed $50,000,000; and

    • (d) the number of employees of the corporation and all corporations related to it does not exceed 500.

  • (2) For the purpose of paragraph (e) of the definition excluded property in subsection 142.2(1) of the Act, a share of the capital stock of a corporation is a prescribed property of a taxpayer if

    • (a) immediately after the time at which the taxpayer acquired the share, the corporation was a qualified small business corporation, and

      • (i) the corporation continued to be a qualified small business corporation for one year after that time, or

      • (ii) the taxpayer could not reasonably expect at that time that the corporation would cease to be a qualified small business corporation within one year after that time; or

    • (b) the share was issued to the taxpayer in exchange for one or more shares of the capital stock of the corporation that were, at the time of the exchange, prescribed property of the taxpayer under this subsection.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2009, c. 2, s. 118

Prescribed Property not Mark-to-Market Property

  •  (1) For the purposes of paragraph (e) of the definition excluded property in subsection 142.2(1) of the Act, and of subparagraph 142.6(4)(a)(ii) of the Act, a debt obligation held by a bank is a prescribed property of the bank if the obligation is

    • (a) an exposure to a designated country (within the meaning assigned by section 8006);

    • (b) a United Mexican States Collateralized Par Bond due 2019; or

    • (c) a United Mexican States Collateralized Discount Bond due 2019.

  • (2) For the purpose of paragraph (e) of the definition excluded property in subsection 142.2(1) of the Act, a share is a prescribed property of a taxpayer for a taxation year if

    • (a) the share is a lending asset of the taxpayer in the year; or

    • (b) the share was, immediately after its issuance, a share described in paragraph (e) of the definition term preferred share in subsection 248(1) of the Act, and the share would, at any time in the year, be a term preferred share if

      • (i) that definition were read without ref- erence to the portion following paragraph (b), and

      • (ii) where the share was issued or acquired on or before June 28, 1982, it were issued or acquired after that day.

  • (3) For the purpose of paragraph (e) of the definition excluded property in subsection 142.2(1) of the Act, a share of the capital stock of a corporation that is held by a credit union is a prescribed property of the credit union for a taxation year if, throughout the period (referred to in this subsection as the “holding period”) in that taxation year during which the credit union holds the share

    • (a) the corporation is a credit union; or

    • (b) the following conditions are satisfied:

      • (i) credit unions hold shares of the corporation that

        • (A) give those credit unions at least 50% of the votes that could be cast under all circumstances at an annual meeting of shareholders of the corporation, and

        • (B) have a fair market value of at least 50% of the fair market value of all the issued shares of the corporation,

      • (ii) the corporation is not controlled, directly or indirectly in any manner whatever, by any person that is not a credit union, and

      • (iii) the corporation would not be controlled by a person that is not a credit union if each share of the corporation that is not owned at any time in the holding period by a credit union were owned, at that time, by the person.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2009, c. 2, s. 118

Prescribed Payment Card Corporation Share not Mark-to-Market Property

 For the purpose of paragraph (b) of the definition excluded property in subsection 142.2(1) of the Act, a prescribed payment card corporation share of a taxpayer at any time means a share of the capital stock of a particular corporation if, at that time,

  • (a) the particular corporation is any one of the following

    • (i) MasterCard International Incorporated,

    • (ii) MasterCard Incorporated, or

    • (iii) Visa Inc.; and

  • (b) the share

    • (i) is of a class of shares that is not listed on a stock exchange,

    • (ii) is not convertible into or exchangeable for a share of the class of the capital stock of a corporation that is listed on a stock exchange, and

    • (iii) was issued by the particular corporation to the taxpayer or to a person related to the taxpayer.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2009, c. 2, s. 118

 [Repealed, 2009, c. 2, s. 118]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2009, c. 2, s. 118

Significant Interest in a Corporation

 For the purpose of paragraph 142.2(3)(c) of the Act, a share described in paragraph 9002(2)(b) is prescribed in respect of all taxpayers.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2009, c. 2, s. 118

Financing Arrangement not a Specified Debt Obligation

 For the purpose of paragraph (c) of the definition specified debt obligation in subsection 142.2(1) of the Act, a property is a prescribed property throughout a taxation year if

  • (a) the property is a direct financing lease, or any other financing arrangement, of a taxpayer that is reported as a loan in the taxpayer’s financial statements for the year prepared in accordance with generally accepted accounting principles; and

  • (b) in computing the taxpayer’s income for the year, an amount is deductible under paragraph 20(1)(a) of the Act in respect of the property that is the subject of the arrangement.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/99-91, s. 8
  • 2009, c. 2, s. 118
 
Date modified: