Technical Tax Amendments Act, 2012 (S.C. 2013, c. 34)
Full Document:
Assented to 2013-06-26
189. (1) Subsection 52(1) of the Act is replaced by the following:
Marginal note:Cost of certain property the value of which is included in income
52. (1) In applying this subdivision, an amount equal to the particular amount described by paragraph (d) shall be added in computing the cost at any time to a taxpayer of a property if
(a) the taxpayer acquired the property after 1971;
(b) the amount was not at or before that time otherwise added to the cost, or included in computing the adjusted cost base, to the taxpayer of the property;
(c) the property is not an annuity contract, a right as a beneficiary under a trust to enforce payment of an amount by the trust to the taxpayer, property acquired in circumstances to which subsection (2) or (3) applies, or property acquired from a trust in satisfaction of all or part of the taxpayer’s capital interest in the trust; and
(d) a particular amount in respect of the property’s value was
(i) included, otherwise than under section 7, in computing
(A) the taxpayer’s taxable income or taxable income earned in Canada, as the case may be, for a taxation year during which the taxpayer was non-resident, or
(B) the taxpayer’s income for a taxation year throughout which the taxpayer was resident in Canada, or
(ii) for the purpose of computing the tax payable under Part XIII by the taxpayer, included in an amount that was paid or credited to the taxpayer.
(2) Paragraph 52(3)(a) of the Act is replaced by the following:
(a) where the stock dividend is a dividend, the amount, if any, by which
(i) the amount of the stock dividend
exceeds
(ii) the amount of the dividend that the shareholder may deduct under subsection 112(1) in computing the shareholder’s taxable income, except any portion of the dividend that, if paid as a separate dividend, would not be subject to subsection 55(2) because the capital gain referred to in that subsection could reasonably be considered not to be attributable to anything other than income earned or realized by any corporation after 1971 and before the safe-income determination time for the transaction or event or series of transactions or events as part of which the dividend was received,
(3) Subsection (1) applies to taxation years that begin after 2006.
(4) Subsection (2) applies in respect of amounts received on or after November 9, 2006.
190. (1) Paragraph 53(1)(b) of the Act is replaced by the following:
(b) where the property is a share of the capital stock of a corporation resident in Canada, the amount, if any, by which
(i) the total of all amounts each of which is the amount of a dividend on the share deemed by subsection 84(1) to have been received by the taxpayer before that time
exceeds
(ii) the portion of the total determined under subparagraph (i) that relates to dividends in respect of which the taxpayer was permitted a deduction under subsection 112(1) in computing the taxpayer’s taxable income, except any portion of the dividend that, if paid as a separate dividend, would not be subject to subsection 55(2) because the capital gain referred to in that subsection could reasonably be considered not to be attributable to anything other than income earned or realized by any corporation after 1971 and before the safe-income determination time for the transaction or event or series of transactions or events as part of which the dividend was received;
(2) Clause 53(1)(e)(i)(A.1) of the Act is repealed.
(3) Subparagraph 53(1)(e)(i) of the Act, as amended by subsection (2), is amended by adding the following after clause (A):
(A.1) subparagraph 39(1)(a)(i.1) in respect of an object referred to in that subparagraph that is not the subject of a gifting arrangement, as defined in subsection 237.1(1), nor a property that is a tax shelter,
(4) Paragraph 53(1)(e) of the Act is amended by adding the following after subparagraph (iv):
(iv.1) each amount that is in respect of a specified amount described in subsection 80.2(1) and that is paid by the taxpayer to the partnership, to the extent that the amount paid is not deductible in computing the income of the taxpayer,
(5) Paragraph 53(1)(e) of the Act is amended by adding the following after subparagraph (viii):
(viii.1) an amount deemed, before that time, by subsection 59(1.1) to be proceeds of disposition receivable by the taxpayer in respect of the disposition of a foreign resource property,
(6) Clause 53(2)(c)(i)(A.1) of the Act is repealed.
(7) Subparagraph 53(2)(c)(iii) of the Act is replaced by the following:
(iii) any amount deemed by subsection 110.1(4) or 118.1(8) to have been the eligible amount of a gift made by the taxpayer by reason of the taxpayer’s membership in the partnership at the end of a fiscal period of the partnership ending before that time,
(8) The portion of subsection 53(4) of the Act before paragraph (a) is replaced by the following:
Marginal note:Recomputation of adjusted cost base on transfers and deemed dispositions
(4) If at any time in a taxation year a person or partnership (in this subsection referred to as the “vendor”) disposes of a specified property and the proceeds of disposition of the property are determined under paragraph 48.1(1)(c), section 70 or 73, subsection 85(1), paragraph 87(4)(a) or (c) or 88(1)(a), subsection 97(2) or 98(2), paragraph 98(3)(f) or (5)(f), subsection 104(4), paragraph 107(2)(a) or (2.1)(a), 107.4(3)(a) or 111(4)(e) or section 128.1,
(9) Subsection (1) applies in respect of a dividend received by a taxpayer on or after November 9, 2006. However, if the taxpayer elects, no later than 180 days after the day on which this Act receives royal assent, by filing with the Minister of National Revenue an election in writing, in respect of the dividend received by the taxpayer before July 16, 2010, paragraph 53(1)(b) of the Act, as enacted by subsection (1), is to be read as follows:
(b) where the property is a share of the capital stock of a corporation resident in Canada, the amount, if any, by which
(i) the total of all amounts each of which is the amount of a dividend on the share deemed by subsection 84(1) to have been received by the taxpayer before that time
exceeds
(ii) the portion of the total determined under subparagraph (i) that relates to dividends
(A) in respect of which the taxpayer was permitted a deduction under subsection 112(1) in computing the taxpayer’s taxable income, and
(B) that arose directly or indirectly as a result of a conversion of contributed surplus into paid-up capital;
(10) Subsections (2) and (6) apply in respect of amounts that became payable after December 20, 2002.
(11) Subsection (3) applies in respect of the disposition of an object made after 2003.
(12) Subsection (4) applies to payments made in taxation years that end after 2002.
(13) Subsection (5) applies for fiscal periods of a partnership that begin after 2000.
(14) Subsection (7) applies in respect of gifts and contributions made after December 20, 2002, except that in its application before 2007, subparagraph 53(2)(c)(iii) of the Act, as enacted by subsection (7), is to be read as follows:
(iii) any amount deemed by subsection 110.1(4) or 118.1(8) to have been the eligible amount of a gift made, or by subsection 127(4.2) to have been an amount contributed, by the taxpayer by reason of the taxpayer’s membership in the partnership at the end of a fiscal period of the partnership ending before that time,
(15) Subsection (8) is deemed to have come into force on February 28, 2004.
191. (1) Paragraph (c) of the definition “superficial loss” in section 54 of the Act is replaced by the following:
(c) a disposition deemed to have been made by paragraph 33.1(11)(a), subsection 45(1), section 48 as it read in its application before 1993, section 50 or 70, subsection 104(4), section 128.1, paragraph 132.2(3)(a) or (c), subsection 138(11.3) or 142.5(2), section 142.6 or any of subsections 144(4.1) and (4.2) and 149(10),
(2) Subsection (1) applies to dispositions that occur after 1998, except that, in its application to taxation years that begin before October 2006, paragraph (c) of the definition “superficial loss” in section 54 of the Act, as enacted by subsection (1), is to be read as follows:
(c) a disposition deemed by paragraph 33.1(11)(a), subsection 45(1), section 48 as it read in its application before 1993, section 50 or 70, subsection 104(4), section 128.1, paragraph 132.2(3)(a) or (c), subsection 138(11.3) or 142.5(2), paragraph 142.6(1)(b) or subsection 144(4.1) or (4.2) or 149(10) to have been made,
192. (1) The portion of subsection 54.1(1) of the English version of the Act before paragraph (a) is replaced by the following:
Marginal note:Exception to principal residence rules
54.1 (1) A taxation year in which a taxpayer does not ordinarily inhabit the taxpayer’s property as a consequence of the relocation of the place of employment of the taxpayer or the taxpayer’s spouse or common-law partner while the taxpayer or the taxpayer’s spouse or common-law partner, as the case may be, is employed by an employer who is not a person to whom the taxpayer or the taxpayer’s spouse or common-law partner is related is deemed not to be a previous taxation year referred to in paragraph (d) of the definition “principal residence” in section 54 if
(2) Subsection (1) applies to the 2001 and subsequent taxation years, except that, if a taxpayer and a person have jointly elected under section 144 of the Modernization of Benefits and Obligations Act, in respect of the 1998, 1999 or 2000 taxation years, subsection (1) applies to the taxpayer and the person in respect of the applicable taxation year and subsequent taxation years.
193. (1) The definition “specified class” in subsection 55(1) of the Act is amended by striking out “and” at the end of paragraph (b) and by replacing paragraph (c) with the following:
(c) no holder of the shares is entitled to receive on the redemption, cancellation or acquisition of the shares by the corporation or by any person with whom the corporation does not deal at arm’s length an amount (other than a premium for early redemption) that is greater than the total of the fair market value of the consideration for which the shares were issued and the amount of any unpaid dividends on the shares, and
(d) the shares are non-voting in respect of the election of the board of directors except in the event of a failure or default under the terms or conditions of the shares;
(2) Subsection 55(1) of the Act is amended by adding the following in alphabetical order:
“qualified person”
« personne admissible »
“qualified person”, in relation to a distribution, means a person or partnership with whom the distributing corporation deals at arm’s length at all times during the course of the series of transactions or events that includes the distribution if
(a) at any time before the distribution,
(i) all of the shares of each class of the capital stock of the distributing corporation that includes shares that cause that person or partnership to be a specified shareholder of the distributing corporation (in this definition all of those shares in all of those classes are referred to as the “exchanged shares”) are, in the circumstances described in paragraph (a) of the definition “permitted exchange”, exchanged for consideration that consists solely of shares of a specified class of the capital stock of the distributing corporation (in this definition referred to as the “new shares”), or
(ii) the terms or conditions of all of the exchanged shares are amended (which shares are in this definition referred to after the amendment as the “amended shares”) and the amended shares are shares of a specified class of the capital stock of the distributing corporation,
(b) immediately before the exchange or amendment, the exchanged shares are listed on a designated stock exchange,
(c) immediately after the exchange or amendment, the new shares or the amended shares, as the case may be, are listed on a designated stock exchange,
(d) the exchanged shares would be shares of a specified class if they were not convertible into, or exchangeable for, other shares,
(e) the new shares or the amended shares, as the case may be, and the exchanged shares are non-voting in respect of the election of the board of directors of the distributing corporation except in the event of a failure or default under the terms or conditions of the shares, and
(f) no holder of the new shares or the amended shares, as the case may be, is entitled to receive on the redemption, cancellation or acquisition of the new shares or the amended shares, as the case may be, by the distributing corporation or by any person with whom the distributing corporation does not deal at arm’s length an amount (other than a premium for early redemption) that is greater than the total of the fair market value of the consideration for which the exchanged shares were issued and the amount of any unpaid dividends on the new shares or on the amended shares, as the case may be;
(3) Clause 55(3)(a)(iii)(B) of the Act is replaced by the following:
(B) property (other than shares of the capital stock of the dividend recipient) more than 10% of the fair market value of which was, at any time during the course of the series, derived from shares of the capital stock of the dividend payer,
(4) Paragraph 55(3.01)(d) of the Act is replaced by the following:
(d) proceeds of disposition are to be determined without reference to
(i) the expression “paragraph 55(2)(a) or” in paragraph (j) of the definition “proceeds of disposition” in section 54, and
(ii) section 93; and
(5) Clause 55(3.1)(b)(i)(B) of the Act is replaced by the following:
(B) the vendor (other than a qualified person in relation to the distribution) was, at any time during the course of the series, a specified shareholder of the distributing corporation or of the transferee corporation, and
(6) Paragraph 55(3.2)(h) of the Act is replaced by the following:
(h) in relation to a distribution each corporation (other than a qualified person in relation to the distribution) that is a shareholder and a specified shareholder of the distributing corporation at any time during the course of a series of transactions or events, a part of which includes the distribution made by the distributing corporation, is deemed to be a transferee corporation in relation to the distributing corporation.
(7) Section 55 of the Act is amended by adding the following after subsection (3.3):
Marginal note:Specified shareholder exclusion
(3.4) In determining whether a person is a specified shareholder of a corporation for the purposes of the definition “qualified person” in subsection (1), subparagraph (3.1)(b)(i) and paragraph (3.2)(h) as it applies for the purpose of subparagraph (3.1)(b)(iii), the reference to “not less than 10% of the issued shares of any class of the capital stock of the corporation” in the definition “specified shareholder” in subsection 248(1) is to be read as “not less than 10% of the issued shares of any class of the capital stock of the corporation, other than shares of a specified class (within the meaning of subsection 55(1))”.
Marginal note:Amalgamation of related corporations
(3.5) For the purposes of paragraphs (3.1)(c) and (d), a corporation formed by an amalgamation of two or more corporations (each of which is referred to in this subsection as a “predecessor corporation”) that were related to each other immediately before the amalgamation, is deemed to be the same corporation as, and a continuation of, each of the predecessor corporations.
(8) Section 55 of the Act is amended by adding the following after subsection (5):
Marginal note:Unlisted shares deemed listed
(6) A share (in this subsection referred to as the “reorganization share”) is deemed, for the purposes of subsection 116(6) and the definition “taxable Canadian property” in subsection 248(1), to be listed on a designated stock exchange if
(a) a dividend, to which subsection (2) does not apply because of paragraph (3)(b), is received in the course of a reorganization;
(b) in contemplation of the reorganization
(i) the reorganization share is issued to a taxpayer by a public corporation in exchange for another share of that corporation (in this subsection referred to as the “old share”) owned by the taxpayer, and
(ii) the reorganization share is exchanged by the taxpayer for a share of another public corporation (in this subsection referred to as the “new share”) in an exchange that would be a permitted exchange if the definition “permitted exchange” were read without reference to paragraph (a) and subparagraph (b)(ii) of that definition;
(c) immediately before the exchange, the old share
(i) is listed on a designated stock exchange, and
(ii) is not taxable Canadian property of the taxpayer; and
(d) the new share is listed on a designated stock exchange.
(9) Subsection (1) applies in respect of shares issued after December 20, 2002.
(10) Subsections (2), (5) and (6) and subsection 55(3.4) of the Act, as enacted by subsection (7), apply in respect of dividends received after 1999, except that for the period before December 14, 2007, the references to “designated stock exchange” in the definition “qualified person” in subsection 55(1) of the Act, as enacted by subsection (2), are to be read as references to “prescribed stock exchange”.
(11) Subsections (3) and (4) apply to dividends received after February 21, 1994.
(12) Subsection 55(3.5) of the Act, as enacted by subsection (7), applies in respect of dividends received after April 26, 1995.
(13) Subsection (8) applies to shares that are issued after April 26, 1995, except that for the period before December 14, 2007, the references to “designated stock exchange” in subsection 55(6) of the Act, as enacted by subsection (8), are to be read as references to “prescribed stock exchange”.
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