Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Marginal note:Return and payment of tax

• 204.3 (1) Within 90 days after the end of each year after 1975, a taxpayer to whom this Part applies shall

  • (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor;

  • (b) estimate in the return the amount of tax, if any, payable by the taxpayer under this Part in respect of each month in the year; and

  • (c) pay to the Receiver General the amount of tax, if any, payable by the taxpayer under this Part in respect of each month in the year.

• Marginal note:Provisions applicable to Part

  (2) Subsections 150(2) and 150(3), sections 152 and 158, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require.

PART X.2Tax in Respect of Registered Investments

Definition of registered investment

• 204.4 (1) In this Part, registered investment means a trust or a corporation that has applied in prescribed form as of a particular date in the year of application and has been accepted by the Minister as of that date as a registered investment for one or more of the following:

  • (a) registered retirement savings plans,

  • (c) registered retirement income funds, and

  • (d) deferred profit sharing plans

  and that has not been notified by the Minister that it is no longer registered under this Part.

• Marginal note:Acceptance of applicant for registration

  (2) The Minister may accept for registration for the purposes of this Part any applicant that is

  • (a) a trust that has as its sole trustee a corporation licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee if, on the particular date referred to in subsection 204.4(1),

    • (i) all the property of the applicant is held in trust for the benefit of not fewer than 20 beneficiaries and

      • (A) not fewer than 20 beneficiaries are taxpayers described in any of paragraphs 149(1)(o) to (o.2), (o.4) or (s), or

      • (B) not fewer than 100 beneficiaries are taxpayers described in paragraph 149(1)(r) or (x),

    • (ii) the total of

      • (A) the fair market value at the time of acquisition of its

        • (I) shares, marketable securities and cash, and

        • (II) bonds, debentures, mortgages, hypothecary claims, notes and other similar obligations, and

      • (B) the amount by which the fair market value at the time of acquisition of its real or immovable property that may reasonably be regarded as being held for the purpose of producing income from property exceeds the total of all amounts each of which is owing by it on account of its acquisition of the real or immovable property

      is not less than 80% of the amount by which the fair market value at the time of acquisition of all its property exceeds the total of all amounts each of which is owing by it on account of its acquisition of real or immovable property,

    • (iii) the fair market value at the time of acquisition of its shares, bonds, mortgages, hypothecary claims and other securities of any one corporation or debtor (other than bonds, mortgages, hypothecary claims and other securities of or guaranteed by Her Majesty in right of Canada or a province or Canadian municipality) is not more than 10% of the amount by which the fair market value at the time of acquisition of all its property exceeds the total of all amounts each of which is an amount owing by it on account of its acquisition of real or immovable property,

    • (iv) the amount by which

      • (A) the fair market value at the time of acquisition of any one of its real or immovable properties

      exceeds

      • (B) the total of all amounts each of which is owing by it on account of its acquisition of the real or immovable property

      is not more than 10% of the amount by which the fair market value at the time of acquisition of all its property exceeds the total of all amounts each of which is owing by it on account of its acquisition of real or immovable property,

    • (v) not less than 95% of the income of the applicant for its most recently completed fiscal period, or where no such period exists, that part of its current fiscal period before the particular date, was derived from investments described in subparagraph 204.4(2)(a)(ii),

    • (vi) the total value of all interests in the applicant owned by all trusts or corporations described in any of paragraphs 149(1)(o) to (o.2), (o.4) or (s) to which any one employer, either alone or together with persons with whom the employer was not dealing at arm’s length, has made contributions does not exceed 25% of the value of all its property,

    • (vii) the total value of all interests in the applicant owned by all trusts described in paragraph 149(1)(r) or (x) to which any one taxpayer, either alone or together with persons with whom the taxpayer was not dealing at arm’s length, has made contributions does not exceed 25% of the value of all its property, and

    • (viii) the applicant does not hold property acquired by it after May 26, 1975 that is

      • (A) a mortgage or hypothecary claim (other than a mortgage or hypothecary claim insured under the National Housing Act or by a corporation that offers its services to the public in Canada as an insurer of mortgages or hypothecary claims and that is approved as a private insurer of mortgages or hypothecary claims by the Superintendent of Financial Institutions pursuant to the powers assigned to the Superintendent under subsection 6(1) of the Office of the Superintendent of Financial Institutions Act), or an interest therein, or for civil law a right therein, in respect of which the mortgagor or hypothecary debtor is the annuitant under a registered retirement savings plan or registered retirement income fund, or a person with whom the annuitant is not dealing at arm’s length, if any of the funds of a trust governed by such a plan or fund have been used to acquire an interest in the applicant, or

      • (B) a bond, debenture, note or similar obligation issued by a cooperative corporation (within the meaning assigned by subsection 136(2)) or a credit union that has granted any benefit or privilege to any annuitant or beneficiary under a plan or fund referred to in subsection 204.4(1) that is dependent on or related to

        • (I) ownership by a trust governed by any such plan or fund of shares, bonds, debentures, notes or similar obligations of the cooperative corporation or credit union, or

        • (II) ownership by the applicant of shares, bonds, debentures, notes or similar obligations of the cooperative corporation or credit union if the trust governed by any such plan or fund has used any of its funds to acquire an interest in the applicant;

  • (b) a trust that

    • (i) would be a trust described in paragraph 204.4(2)(a) if that paragraph were read without reference to subparagraphs 204.4(2)(a)(i), 204.4(2)(a)(vi) and 204.4(2)(a)(vii), and

    • (ii) holds only prescribed investments for the type of plan or fund in respect of which it has applied for registration;

  • (c) a mutual fund trust;

  • (d) a trust that

    • (i) would be a mutual fund trust if paragraph 132(6)(c) were not applicable, and

    • (ii) holds only prescribed investments for the type of plan or fund in respect of which it has applied for registration;

  • (e) a mutual fund corporation or investment corporation; or

  • (f) a corporation that

    • (i) would be a mutual fund corporation or investment corporation if it could have elected to be a public corporation under paragraph (b) of the definition public corporation in subsection 89(1) had the conditions prescribed therefor required only that a class of shares of its capital stock be qualified for distribution to the public, and

    • (ii) holds only prescribed investments for the type of plan or fund in respect of which it has applied for registration.

• Marginal note:Revocation of registration

  (3) The Minister shall notify a registered investment that it is no longer registered

  • (a) on being satisfied that, at a date subsequent to its registration date, it no longer satisfies one or more of the conditions necessary for it to be acceptable for registration under this Part, other than a condition the failure of which to satisfy would make it liable for tax under section 204.6; or

  • (b) within 30 days after receipt of a request in prescribed form from the registered investment for termination of its registration.

• Marginal note:Suspension of revocation

  (4) Notwithstanding a notification to a taxpayer under subsection (3), for the purposes of sections 204.6 and 204.7, the taxpayer is deemed to be a registered investment for each month or part of a month after the notification during which an interest in, or a share of the capital stock of, the taxpayer continues, by virtue of having been a registered investment, to be a qualified investment for a plan or fund referred to in subsection (1).

• Marginal note:Cancellation of revocation

  (5) Where a registered investment has been notified pursuant to paragraph 204.4(3)(a) and within 3 months from the date of notification it satisfies the Minister that it is acceptable for registration under this Part, the Minister may declare the notification to be a nullity.

• Marginal note:Successor trust

  (6) Where at any time in a year a particular trust described in paragraph 204.4(2)(a) or 204.4(2)(b) has substantially the same beneficiaries and can reasonably be regarded as being a continuation of another trust that was a registered investment in the year or the immediately preceding year, for the purposes of this Part, the particular trust shall be deemed to be the same trust as the other trust.

• Marginal note:Deemed registration of registered investment

  (7) Where at the end of any month a registered investment could qualify for acceptance at that time under subsection 204.4(2), it shall be deemed for the purposes of section 204.6 to have been registered under the first of the following paragraphs under which it is registrable regardless of the paragraph under which it was accepted for registration by the Minister:

  • (a) paragraph 204.4(2)(c) or 204.4(2)(e), as the case may be;

  • (b) paragraph 204.4(2)(a);

  • (c) paragraph 204.4(2)(d) or 204.4(2)(f), as the case may be; and

  • (d) paragraph 204.4(2)(b).

Marginal note:Publication

204.5 Each year the Minister shall make available to the public, in such a manner as the Minister deems appropriate, the names of all registered investments as of December 31 of the preceding year.

Marginal note:Tax payable

• 204.6 (1) If at the end of any month a taxpayer that is a registered investment described in paragraph 204.4(2)(b), (d) or (f) holds property that is not a prescribed investment for that taxpayer, it shall, in respect of that month, pay a tax under this Part equal to the total of all amounts each of which is an amount determined in respect of such a property by the formula

  0.01(A × B ÷ C)

  where

  A

  is the fair market value of the property at the time of its acquisition by the taxpayer;

  B

  is the total number of units or shares of the capital stock of the registered investment held at the end of the month by one or more

  • (a) trusts that are governed by any of a FHSA, RDSP, RESP, RRIF, RRSP, TFSA or deferred profit sharing plan, or

  • (b) registered investments described in paragraph 204.4(2)(b), (d) or (f); and

  C

  is the total number of issued units or issued and outstanding shares of the capital stock of the registered investment at the end of the month.

• Marginal note:Tax payable

  (2) Where at the end of any month a taxpayer that is a registered investment described in paragraph 204.4(2)(a) or (b) holds property that is a share, bond, mortgage, hypothecary claim or other security of a corporation or debtor (other than bonds, mortgages, hypothecary claims and other securities of or guaranteed by Her Majesty in right of Canada or a province or Canadian municipality), it shall, in respect of that month, pay a tax under this Part equal to 1% of the amount, if any, by which

  • (a) the total of all amounts each of which is the fair market value of such a property at the time of its acquisition

  exceeds

  • (b) 10% of the amount by which

    • (i) the total of all amounts each of which is the fair market value, at the time of acquisition, of one of its properties

    exceeds

    • (ii) the total of all amounts each of which is an amount owing by the trust at the end of the month in respect of the acquisition of real property or immovables.

• Marginal note:Tax payable — real property or immovables

  (3) If at the end of any month a taxpayer that is a registered investment described in paragraph 204.4(2)(a) holds real or immovable property, it shall, in respect of that month, pay a tax under this Part equal to 1% of the total of all amounts each of which is the amount by which the excess of

  • (a) the fair market value at the time of its acquisition of any one real or immovable property of the taxpayer

  over

  • (b) the total of all amounts each of which was an amount owing by it at the end of the month on account of its acquisition of the real or immovable property

  was greater than 10% of the amount by which the total of all amounts each of which is the fair market value at the time of its acquisition of a property held by it at the end of the month exceeds the total of all amounts each of which was an amount owing by it at the end of the month on account of its acquisition of real or immovable property.

Marginal note:Return and payment of tax

• 204.7 (1) Within 90 days from the end of each taxation year commencing after 1980, a registered investment shall

  • (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor;

  • (b) estimate in the return the amount of tax, if any, payable by it under this Part for the year; and

  • (c) pay to the Receiver General the amount of tax, if any, payable by it under this Part for the year.

• Marginal note:Liability of trustee

  (2) Where the trustee of a registered investment that is liable to pay tax under this Part does not remit to the Receiver General the amount of the tax within the time specified in subsection 204.7(1), the trustee is personally liable to pay on behalf of the registered investment the full amount of the tax and is entitled to recover from the registered investment any amount paid by the trustee as tax under this section.

• Marginal note:Provisions applicable to Part

  (3) Subsections 150(2) and 150(3), sections 152 and 158, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require.