Economic Action Plan 2013 Act, No. 2 (S.C. 2013, c. 40)
Full Document:
Assented to 2013-12-12
48. (1) Section 112 of the Act is amended by adding the following after subsection (7):
Marginal note:Synthetic disposition — holding period
(8) If a synthetic disposition arrangement is entered into in respect of a property owned by a taxpayer and the synthetic disposition period of the arrangement is 30 days or more, for the purposes of paragraphs (3.01)(b) and (3.11)(b), subclauses (3.2)(a)(ii)(C)(I) and (3.3)(a)(ii)(C)(I) and paragraphs (3.31)(b), (3.32)(b), (4.01)(b), (4.11)(b), (4.21)(b), (4.22)(b), (5.1)(b) and (5.21)(b) and subsection (9), the taxpayer is deemed not to own the property during the synthetic disposition period.
Marginal note:Exception
(9) Subsection (8) does not apply in respect of a property owned by a taxpayer in respect of a synthetic disposition arrangement if the taxpayer owned the property throughout the 365-day period (determined without reference to this subsection) that ended immediately before the synthetic disposition period of the arrangement.
(2) Subject to subsection (3), subsection (1) applies to:
(a) an agreement or arrangement entered into after March 20, 2013; and
(b) an agreement or arrangement entered into before March 21, 2013, the term of which is extended after March 20, 2013, as if the agreement or arrangement were entered into at the time of the extension.
(3) In respect of an agreement or arrangement referred to in subsection (2), that is entered into before September 13, 2013 and the term of which is not extended after September 12, 2013, subsection 112(9) of the Act, as enacted by subsection (1), is to be read as follows:
(9) Subsection (8) does not apply in respect of a property owned by a taxpayer in respect of a synthetic disposition arrangement if the taxpayer owned the property throughout the 365-day period that ended immediately before the synthetic disposition period of the arrangement.
49. (1) The portion of subsection 117.1(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Annual adjustment
117.1 (1) The amount of $1,000 referred to in the formula in paragraph 8(1)(s), each of the amounts expressed in dollars in subparagraph 6(1)(b)(v.1), subsection 117(2), the description of B in subsection 118(1), subsection 118(2), paragraph (a) of the description of B in subsection 118(10), subsection 118.01(2), the descriptions of C and F in subsection 118.2(1) and subsections 118.3(1), 122.5(3) and 122.51(1) and (2), the amount of $400,000 referred to in the formula in paragraph 110.6(2)(a), the amounts of $925 and $1,680 referred to in the description of A, and the amounts of $10,500 and $14,500 referred to in the description of B, in the formula in subsection 122.7(2), the amount of $462.50 referred to in the description of C, and the amounts of $16,667 and $25,700 referred to in the description of D, in the formula in subsection 122.7(3), and each of the amounts expressed in dollars in Part I.2 in relation to tax payable under this Part or Part I.2 for a taxation year shall be adjusted so that the amount to be used under those provisions for the year is the total of
(2) Subsection (1) applies to the 2015 and subsequent taxation years.
50. (1) Subparagraph 118.5(3)(c)(iv) of the Act is replaced by the following:
(iv) the provision of financial assistance to students, except to the extent that, if this Act were read without reference to subsection 56(3), the amount of the assistance would be required to be included in computing the income, and not be deductible in computing the taxable income, of the students to whom the assistance is provided, or
(2) Subsection (1) applies to the 2012 and subsequent taxation years.
51. (1) The definition “non-portfolio property” in subsection 122.1(1) of the Act is replaced by the following:
“non-portfolio property”
« bien hors portefeuille »
“non-portfolio property”, of a particular entity for a taxation year, means a property, held by the particular entity at any time in the taxation year, that is
(a) a security of a subject entity (other than a portfolio investment entity), if at that time the particular entity holds
(i) securities of the subject entity that have a total fair market value that is greater than 10% of the equity value of the subject entity, or
(ii) securities of the subject entity that, together with all the securities that the particular entity holds of entities affiliated with the subject entity, have a total fair market value that is greater than 50% of the equity value of the particular entity;
(b) a Canadian real, immovable or resource property, if at any time in the taxation year the total fair market value of all properties held by the particular entity that are Canadian real, immovable or resource properties is greater than 50% of the equity value of the particular entity; or
(c) a property that the particular entity, or a person or partnership with whom the particular entity does not deal at arm’s length, uses at that time in the course of carrying on a business in Canada.
(2) Paragraph (b) of the definition “excluded subsidiary entity” in subsection 122.1(1) of the Act is amended by striking out “or” at the end of subparagraph (iv) and by replacing subparagraph (v) with the following:
(v) a person or partnership that does not have, in connection with the holding of a security of the entity, property the value of which is determined, all or in part, by reference to a security that is listed or traded on a stock exchange or other public market, or
(vi) an excluded subsidiary entity for the taxation year.
(3) Subsection (1) applies to taxation years that end after July 20, 2011.
(4) Subsection (2) is deemed to have come into force on October 31, 2006, except that it does not apply for the purpose of determining if an entity is an excluded subsidiary entity for taxation years of the entity that began before July 21, 2011 if the entity so elects in writing filed with the Minister of National Revenue within 365 days after the day on which this Act receives royal assent.
52. Subsection 122.61(3) of the Act is replaced by the following:
Marginal note:Non-residents and part-year residents
(3) For the purposes of this section, if a person was non-resident at any time in a taxation year, the person’s income for the year is, for greater certainty, deemed to be the amount that would have been the person’s income for the year had the person been resident in Canada throughout the year.
53. Section 122.64 of the Act is repealed.
54. (1) Subparagraph (a)(iv) of the definition “full rate taxable income” in subsection 123.4(1) of the Act is replaced by the following:
(iv) if the corporation is a credit union throughout the year and the corporation deducted an amount for the year under subsection 125(1) (because of the application of subsections 137(3) and (4)), the amount, if any, that is the product of the amount, if any, determined for B in subsection 137(3) multiplied by the amount determined for C in subsection 137(3) in respect of the corporation for the year;
(2) Subsection (1) applies to taxation years that end after March 20, 2013.
55. (1) The descriptions of G and H in the definition “specified partnership income” in subsection 125(7) of the Act are replaced by the following:
- G
- is the total of all amounts each of which is the corporation’s share of the income (determined in accordance with subdivision j of Division B) of the partnership for a fiscal period of the business that ends in the year, or an amount included in the corporation’s income for the year in respect of the business under any of subsections 34.2(2), (3) and (12), and
- H
- is the total of all amounts deducted in computing the corporation’s income for the year from the business (other than amounts that were deducted in computing the income of the partnership from the business) or in respect of the business under subsection 34.2(4) or (11), and
(2) Subsection (1) applies to taxation years that end after March 22, 2011.
56. (1) Section 126 of the Act is amended by adding the following after subsection (4.4):
Marginal note:Synthetic disposition — holding period
(4.5) If a synthetic disposition arrangement is entered into in respect of a property owned by a taxpayer and the synthetic disposition period of the arrangement is 30 days or more,
(a) for the purpose of determining whether the period referred to in subsection (4.2) is one year or less, the period is deemed to begin at the earlier of
(i) the time that is immediately before the particular time referred to in subsection (4.2), and
(ii) the end, if any, of the synthetic disposition period; and
(b) for the purposes of subsection (4.6), the taxpayer is deemed not to own the property during the synthetic disposition period.
Marginal note:Exception
(4.6) Subsection (4.5) does not apply in respect of a property owned by a taxpayer in respect of a synthetic disposition arrangement if the taxpayer owned the property throughout the one-year period (determined without reference to this subsection) that ended immediately before the synthetic disposition period of the arrangement.
(2) Subject to subsection (3), subsection (1) applies to:
(a) an agreement or arrangement entered into after March 20, 2013; and
(b) an agreement or arrangement entered into before March 21, 2013, the term of which is extended after March 20, 2013, as if the agreement or arrangement were entered into at the time of the extension.
(3) In respect of an agreement or arrangement referred to in subsection (2), that is entered into before September 13, 2013 and the term of which is not extended after September 12, 2013, subsection 126(4.6) of the Act, as enacted by subsection (1), is to be read as follows:
(4.6) Subsection (4.5) does not apply in respect of a property owned by a taxpayer in respect of a synthetic disposition arrangement if the taxpayer owned the property throughout the one-year period that ended immediately before the synthetic disposition period of the arrangement.
- Date modified: