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

Marginal note:Return and payment of tax for federally-registered LSVCCs

• 204.86 (1) Every registered labour-sponsored venture capital corporation and every revoked corporation shall

  • (a) on or before its filing-due date for a taxation year, 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 and penalties, if any, payable under this Part by it for the year; and

  • (c) on or before its balance-due day for the year, pay to the Receiver General the amount of tax and penalties, if any, payable under this Part by it for the year.

• Marginal note:Return and payment of tax for other LSVCCs

  (2) Where tax is payable under this Part for a taxation year by a corporation because of subsection 204.82(5) or 204.85(2), the corporation shall

  • (a) on or before its filing-due date for the year, 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 payable under this Part by it for the year; and

  • (c) on or before its balance-due day for the year, pay to the Receiver General the amount of tax payable under this Part by it for the year.

Marginal note:Provisions applicable to Part

204.87 Subsection 150(3), sections 152 and 158, subsections 161(1) and 161(11), sections 162 to 164 and 165 to 167, Division J of Part I and section 227.1 apply to this Part, with such modifications as the circumstances require.

PART X.4Tax in Respect of Overpayments to Registered Education Savings Plans

Marginal note:Definitions

• 204.9 (1) The definitions in this subsection apply in this Part.

  excess amount

  excess amount for a year at any time in respect of an individual means

  • (a) for years before 2007, the amount, if any, by which the total of all contributions made after February 20, 1990 in the year and before that time into all registered education savings plans by or on behalf of all subscribers in respect of the individual exceeds the lesser of

    • (i) the RESP annual limit for the year, and

    • (ii) the amount, if any, by which the RESP lifetime limit for the year exceeds the total of all contributions made into registered education savings plans by or on behalf of all subscribers in respect of the individual in all preceding years; and

  • (b) for years after 2006, the amount, if any, by which the total of all contributions made in the year and before that time into all registered education savings plans by or on behalf of all subscribers in respect of the individual exceeds the amount, if any, by which

    • (i) the RESP lifetime limit for the year

    exceeds

    • (ii) the total of all contributions made into registered education savings plans by or on behalf of all subscribers in respect of the individual in all preceding years. (excédent)

  RESP lifetime limit

  RESP lifetime limit for a year means

  • (a) for 1990 to 1995, $31,500;

  • (b) for 1996 to 2006, $42,000; and

  • (c) for 2007 and subsequent years, $50,000. (plafond cumulatif de REEE)

  subscriber’s gross cumulative excess

  subscriber’s gross cumulative excess at any time in respect of an individual means the total of all amounts each of which is the subscriber’s share of the excess amount for a relevant year at that time in respect of the individual and, for the purpose of this definition, a relevant year at any time is a year that began before that time. (excédent cumulatif brut du souscripteur)

  subscriber’s share of the excess amount

  subscriber’s share of the excess amount for a year at any time in respect of an individual means the amount determined by the formula

  (A/B) × C

  where

  A

  is the total of all contributions made after February 20, 1990, in the year and before that time into all registered education savings plans by or on behalf of the subscriber in respect of the individual;

  B

  is the total of all contributions made after February 20, 1990, in the year and before that time into all registered education savings plans by or on behalf of all subscribers in respect of the individual; and

  C

  is the excess amount for the year at that time in respect of the individual. (part du souscripteur sur l’excédent)

• Marginal note:Application of s. 146.1(1)

  (1.1) The definitions in subsection 146.1(1) apply to this Part.

• Marginal note:Agreements before February 21, 1990

  (2) Where a subscriber is required, pursuant to an agreement in writing entered into before February 21, 1990, to make payments of specified amounts on a periodic basis into a registered education savings plan in respect of a beneficiary, and the subscriber makes at least one payment under the agreement before that day,

  • (a) the excess amount for a year in respect of the beneficiary shall be deemed not to exceed the excess amount for the year that would be determined under subsection 204.9(1) if the total of all such payments made in the year and, where the agreement so provides, amounts paid in the year in satisfaction of the requirement to make such payments under all such agreements by all such subscribers in respect of the beneficiary were equal to the lesser of the amounts described in paragraphs (a) and (b) of the definition excess amount in subsection 204.9(1); and

  • (b) in determining a subscriber’s share of an excess amount for a year, any payment included in the total described in paragraph 204.9(2)(a) in respect of the year shall be excluded in determining the values for A and B in the definition subscriber’s share of the excess amount in subsection 204.9(1).

• Marginal note:Refunds from unregistered plans

  (3) For the purposes of subsection 204.9(1) and section 146.1, where an individual entered into an education savings plan before February 21, 1990, pursuant to a preliminary prospectus issued by a promoter, and the promoter refunds all payments made into the plan and all income accrued thereon to the individual, each payment made by the individual into a registered education savings plan before December 31, 1990 shall be deemed to be a payment made before February 21, 1990, to the extent that the total of all such payments does not exceed the amount so refunded to the individual.

• Marginal note:New beneficiary

  (4) For the purposes of this Part, if at any particular time an individual (in this subsection referred to as the “new beneficiary”) becomes a beneficiary under a registered education savings plan in place of another individual (in this subsection referred to as the “former beneficiary”) who ceased at or before the particular time to be a beneficiary under the plan,

  • (a) except as provided by paragraph 204.9(4)(b), each contribution made at an earlier time by or on behalf of a subscriber into the plan in respect of the former beneficiary is deemed also to have been made at that earlier time in respect of the new beneficiary;

  • (b) except for the purpose of applying this subsection to a replacement of a beneficiary after the particular time, applying subsection (5) to a distribution after the particular time and applying subsection 204.91(3) to events after the particular time, paragraph (a) does not apply as a consequence of the replacement at the particular time of the former beneficiary if

    • (i) the new beneficiary had not attained 21 years of age before the particular time and a parent of the new beneficiary was a parent of the former beneficiary, or

    • (ii) both beneficiaries were connected by blood relationship or adoption to an original subscriber under the plan and neither had attained 21 years of age before the particular time; and

  • (c) except where paragraph 204.9(4)(b) applies, each contribution made by or on behalf of a subscriber under the plan in respect of the former beneficiary under the plan is, without affecting the determination of the amount withdrawn from the plan in respect of the new beneficiary, deemed to have been withdrawn at the particular time from the plan to the extent that it was not withdrawn before the particular time.

• Marginal note:Transfers between plans

  (5) For the purposes of this Part, if property held by a trust governed by a registered education savings plan (in this subsection referred to as the “transferor plan”) is distributed at a particular time to a trust governed by another registered education savings plan (in this subsection referred to as the “transferee plan”),

  • (a) except as provided by paragraphs 204.9(5)(b) and 204.9(5)(c), the amount of the distribution is deemed not to have been contributed into the transferee plan;

  • (b) subject to paragraph 204.9(5)(c), each contribution made at any earlier time by or on behalf of a subscriber into the transferor plan in respect of a beneficiary under the transferor plan is deemed also to have been made at that earlier time by the subscriber in respect of each beneficiary under the transferee plan;

  • (c) except for the purpose of applying this subsection to a distribution after the particular time, applying subsection 204.9(4) to a replacement of a beneficiary after the particular time and applying subsection 204.91(3) to events after the particular time, paragraph 204.9(5)(b) does not apply as a consequence of the distribution where

    • (i) any beneficiary under the transferee plan was, immediately before the particular time, a beneficiary under the transferor plan, or

    • (ii) a parent of a beneficiary under the transferee plan was a parent of an individual who was, immediately before the particular time, a beneficiary under the transferor plan and

      • (A) the transferee plan is a plan that allows more than one beneficiary under the plan at any one time, or

      • (B) in any other case, the beneficiary under the transferee plan had not attained 21 years of age at the time the transferee plan was entered into;

  • (d) where subparagraph 204.9(5)(c)(i) or 204.9(5)(c)(ii) applies in respect of the distribution, the amount of the distribution is deemed not to have been withdrawn from the transferor plan; and

  • (e) each subscriber under the transferor plan is deemed to be a subscriber under the transferee plan.

Marginal note:Tax payable by subscribers

• 204.91 (1) Every subscriber under a registered education savings plan shall pay a tax under this Part in respect of each month equal to 1% of the amount, if any, by which

  • (a) the total of all amounts each of which is the subscriber’s gross cumulative excess at the end of the month in respect of an individual

  exceeds

  • (b) the total of all amounts each of which is the portion of such an excess that has been withdrawn from a registered education savings plan before the end of the month.

• Marginal note:Waiver of tax

  (2) If a subscriber under a registered education savings plan would, but for this subsection, be required to pay a tax in respect of a month under subsection 204.91(1) in respect of an individual, the Minister may waive or cancel all or part of the tax where it is just and equitable to do so having regard to all the circumstances, including

  • (a) whether the tax arose as a consequence of reasonable error;

  • (b) whether, as a consequence of one or more transactions or events to which subsection 204.9(4) or 204.9(5) applies, the tax is excessive; and

  • (c) the extent to which further contributions could be made into registered education savings plans in respect of the individual before the end of the month without causing additional tax to be payable under this Part if this Part were read without reference to this subsection.

• Marginal note:Marriage or common-law partnership breakdown

  (3) If at any time an individual (in this subsection referred to as the “former subscriber”) ceases to be a subscriber under a registered education savings plan as a consequence of the settlement of rights arising out of, or on the breakdown of, the marriage or common-law partnership of the former subscriber and another individual (in this subsection referred to as the “current subscriber”) who is a subscriber under the plan immediately after that time, for the purpose of determining tax payable under this Part in respect of a month that ends after that time, each contribution made before that time into the plan by or on behalf of the former subscriber is deemed to have been made into the plan by the current subscriber and not by or on behalf of the former subscriber.

• Marginal note:Deceased subscribers

  (4) For the purpose of applying this section where a subscriber has died, the subscriber’s estate is deemed to be the same person as, and a continuation of, the subscriber for each month that ends after the death.

Marginal note:Return and payment of tax

204.92 Every person who is liable to pay tax under this Part in respect of a month in a year shall, within 90 days after the end of the year,

• (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 under this Part by the person in respect of each month in the year; and

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

Marginal note:Provisions applicable to Part

204.93 Subsections 150(2) and 150(3), sections 152, 158 and 159, 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.5Payments Under Registered Education Savings Plans

Marginal note:Definitions

• 204.94 (1) The definitions in subsection 146.1(1) apply for the purposes of this Part, except that the definition subscriber in that subsection shall be read without reference to paragraph (c).

• Marginal note:Charging provision

  (2) Every person (other than a public primary caregiver that is exempt from tax under Part I) shall pay a tax under this Part for each taxation year equal to the amount determined by the formula

  (A + B - C) × D

  where

  A

  is the total of all amounts each of which is an accumulated income payment made at any time that is

  • (a) either

    • (i) under a registered education savings plan under which the person is a subscriber at that time, or

    • (ii) under a registered education savings plan under which there is no subscriber at that time, where the person has been a spouse or common-law partner of an individual who was a subscriber under the plan, and

  • (b) included in computing the person’s income under Part I for the year;

  B

  is the total of all amounts each of which is an accumulated income payment that is

  • (a) not included in the value of A in respect of the person for the year, and

  • (b) included in computing the person’s income under Part I for the year;

  C

  is the lesser of

  • (a) the lesser of the value of A in respect of the person for the year and the total of all amounts each of which is an amount deducted under subsection 146(5) or 146(5.1) in computing the person’s income under Part I for the year, and

  • (b) the amount, if any, by which $50,000 exceeds the total of all amounts each of which is an amount determined under paragraph (a) in respect of the person for a preceding taxation year; and

  D

  is

  • (a) where a tax, similar to the tax provided under this Part, is payable by the person for the year under a law of the province of Quebec, 12%, and

  • (b) in any other case, 20%.

• Marginal note:Return and payment of tax

  (3) Every person who is liable to pay tax under this Part for a taxation year shall, on or before the person’s filing-due date for the year,

  • (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 payable under this Part by the person for the year; and

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

• Marginal note:Administrative rules

  (4) Subsections 150(2) and 150(3), sections 152, 155 to 156.1 and 158 to 167 and Division J of Part I apply with any modifications that the circumstances require.