Technical Tax Amendments Act, 2012 (S.C. 2013, c. 34)
Full Document:
Assented to 2013-06-26
224. (1) Paragraph 88(1)(c.1) of the Act is replaced by the following:
(c.1) for the purpose of determining after the winding-up the amount to be included under subsection 14(1) in computing the parent’s income in respect of the business carried on by the subsidiary immediately before the winding-up
(i) there shall be added to the amount otherwise determined for each of the descriptions of A and F in the definition “cumulative eligible capital” in subsection 14(5), the total of all amounts, each of which is the amount, if any,
(A) determined for the description of F in that definition in respect of that business immediately before the winding up,
(B) determined under this subparagraph as it applied to the subsidiary in respect of a winding-up before that time, or
(C) determined under paragraph 85(1)(d.11) as it applied to the subsidiary in respect of a disposition to the subsidiary before that time, and
(ii) there shall be added to the amount determined for the description of C in the formula in paragraph 14(1)(b), the total of all amounts, each of which is an amount that is
(A) one-half of the amount, if any, determined for the description of Q in that definition in respect of that business immediately before the winding up,
(B) determined under this subparagraph as it applied to the subsidiary in respect of a winding-up before that time, or
(C) determined under paragraph 85(1)(d.1) as it applied to the subsidiary in respect of a disposition to the subsidiary before that time;
(2) Paragraph 88(1)(c.3) of the Act is amended by striking out “or” at the end of subparagraph (iv) and by adding the following after subparagraph (v):
(vi) a share of the capital stock of the subsidiary or a debt owing by it, if the share or debt, as the case may be, was owned by the parent immediately before the winding-up, or
(vii) a share of the capital stock of a corporation or a debt owing by a corporation, if the fair market value of the share or debt, as the case may be, was not, at any time after the beginning of the winding-up, wholly or partly attributable to property distributed to the parent on the winding-up;
(3) Subparagraph 88(1)(c.4)(i) of the Act is replaced by the following:
(i) a share of the capital stock of the parent that was
(A) received as consideration for the acquisition of a share of the capital stock of the subsidiary by the parent or by a corporation that was a specified subsidiary corporation of the parent immediately before the acquisition, or
(B) issued for consideration that consists solely of money,
(4) Paragraph 88(1)(e.6) of the Act is replaced by the following:
(e.6) if a subsidiary has made a gift in a taxation year (in this section referred to as the “gift year”), for the purposes of computing the amount deductible under section 110.1 by the parent for its taxation years that end after the subsidiary was wound up, the parent is deemed to have made a gift, in each of its taxation years in which a gift year of the subsidiary ended, equal to the amount, if any, by which the total of all amounts, each of which is the amount of a gift or, in the case of a gift made after December 20, 2002, the eligible amount of the gift, made by the subsidiary in the gift year exceeds the total of all amounts deducted under section 110.1 by the subsidiary in respect of those gifts;
(5) The portion of paragraph 88(1.1)(e) of the Act before subparagraph (i) is replaced by the following:
(e) if control of the parent has been acquired by a person or group of persons at any time after the commencement of the winding-up, or control of the subsidiary has been acquired by a person or group of persons at any time whatever, no amount in respect of the subsidiary’s non-capital loss or farm loss for a taxation year ending before that time is deductible in computing the taxable income of the parent for a particular taxation year ending after that time, except that such portion of the subsidiary’s non-capital loss or farm loss as may reasonably be regarded as its loss from carrying on a business and, where a business was carried on by the subsidiary in that year, such portion of the non-capital loss as may reasonably be regarded as being in respect of an amount deductible under paragraph 110(1)(k) in computing its taxable income for the year is deductible only
(6) Subsection (1) applies in respect of the disposition of an eligible capital property by a subsidiary to a parent unless
(a) the disposition by the subsidiary occurred before December 21, 2002; and
(b) the parent disposed of the eligible capital property, before November 9, 2006, and in a taxation year of the parent ending after February 27, 2000, to a person with whom the parent did not deal at arm’s length at the time of that disposition by the parent.
(7) Subsections (2) and (3) apply to windings-up that begin, and amalgamations that occur, after 1997.
(8) Subsection (4) applies to windings-up that begin, and amalgamations that occur, after December 20, 2002.
(9) Subsection (5) applies to windings-up that begin after May 1996.
225. (1) Clause (a)(i)(A) of the definition “capital dividend account” in subsection 89(1) of the Act is replaced by the following:
(A) the amount of the corporation’s capital gain — computed without reference to subparagraphs 52(3)(a)(ii) and 53(1)(b)(ii) — from the disposition (other than a disposition that is the making of a gift after December 8, 1997 that is not a gift described in subsection 110.1(1)) of a property in the period beginning at the beginning of its first taxation year that began after the corporation last became a private corporation and that ended after 1971 and ending immediately before the particular time (in this definition referred to as “the period”)
(2) Clause (a)(i)(A) of the definition “capital dividend account” in subsection 89(1) of the Act, as enacted by subsection (1), is replaced by the following:
(A) the amount of the corporation’s capital gain — computed without reference to subparagraphs 52(3)(a)(ii) and 53(1)(b)(ii) — from the disposition (other than a disposition under subsection 40(12) or that is the making of a gift after December 8, 1997 that is not a gift described in subsection 110.1(1)) of a property in the period beginning at the beginning of its first taxation year (that began after the corporation last became a private corporation and that ended after 1971) and ending immediately before the particular time (in this definition referred to as “the period”)
(3) Clause (a)(i)(A) of the definition “capital dividend account” in subsection 89(1) of the Act, as enacted by subsection (2), is replaced by the following:
(A) the amount of the corporation’s capital gain — computed without reference to subparagraphs 52(3)(a)(ii) and 53(1)(b)(ii) — from the disposition (other than a disposition under paragraph 40(3.1)(a) or subsection 40(12) or a disposition that is the making of a gift after December 8, 1997 that is not a gift described in subsection 110.1(1)) of a property in the period beginning at the beginning of its first taxation year that began after the corporation last became a private corporation and that ended after 1971 and ending immediately before the particular time (in this definition referred to as “the period”)
(4) Clause (a)(ii)(A) of the definition “capital dividend account” in subsection 89(1) of the Act is replaced by the following:
(A) the amount of the corporation’s capital loss — computed without reference to subparagraphs 52(3)(a)(ii) and 53(1)(b)(ii) — from the disposition (other than a disposition that is the making of a gift after December 8, 1997 that is not a gift described in subsection 110.1(1)) of a property in the period
(5) Clause (a)(ii)(A) of the definition “capital dividend account” in subsection 89(1) of the Act, as enacted by subsection (4), is replaced by the following:
(A) the amount of the corporation’s capital loss — computed without reference to subparagraphs 52(3)(a)(ii) and 53(1)(b)(ii) — from the disposition (other than a disposition under subsection 40(3.12) or a disposition that is the making of a gift after December 8, 1997 that is not a gift described in subsection 110.1(1)) of a property in the period
(6) The portion of paragraph (f) of the definition compte de dividendes en capital in subsection 89(1) of the French version of the Act before clause (i)(B) is replaced by the following:
f) le total des montants représentant chacun un montant relatif à une distribution qu’une fiducie a effectuée sur ses gains en capital en faveur de la société au cours de la période et dont le montant est égal au moins élevé des montants suivants :
(i) l’excédent du montant visé à la division (A) sur le montant visé à la division (B) :
(A) le montant de la distribution,
(7) Clause (f)(i)(B) of the definition “capital dividend account” in subsection 89(1) of the Act is replaced by the following:
(B) the amount designated under subsection 104(21) by the trust (other than a designation to which subsection 104(21.4), as it read in its application to the corporation’s last taxation year that began before November 2011, applied) in respect of the net taxable capital gains of the trust attributable to those capital gains, and
(8) The portion of paragraph (g) of the definition compte de dividendes en capital in subsection 89(1) of the French version of the Act before subparagraph (ii) is replaced by the following:
g) le total des montants représentant chacun un montant relatif à une distribution qu’une fiducie a effectuée en faveur de la société au cours de la période au titre d’un dividende (sauf un dividende imposable) qui a été versé à la fiducie au cours d’une année d’imposition de celle-ci tout au long de laquelle elle a résidé au Canada, sur une action du capital-actions d’une autre société résidant au Canada, et dont le montant est égal au moins élevé des montants suivants :
(i) le montant de la distribution,
(9) Paragraph (b) of the definition “taxable Canadian corporation” in subsection 89(1) of the Act is replaced by the following:
(b) was not, by reason of a statutory provision other than paragraph 149(1)(t), exempt from tax under this Part;
(10) Subsections (1) and (4) apply in respect of dispositions that occur on or after November 9, 2006.
(11) Subsection (2) applies to dispositions that occur on or after March 22, 2011.
(12) Subsection (3) applies to dispositions under paragraph 40(3.1)(a) of the Act that occur after October 31, 2011.
(13) Subsection (5) applies to dispositions under subsection 40(3.12) of the Act that occur after October 31, 2011, other than dispositions that relate to amounts deemed under subsection 40(3.1) of the Act to have been a gain from a disposition that occurred before November 1, 2011.
(14) Subsections (6) and (8) apply to elections in respect of capital dividends that become payable after 1997.
(15) Subsection (7) applies to taxation years that begin after October 31, 2011.
(16) Subsection (9) applies in respect of taxation years that end after 1999.
- Date modified: