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Income Tax Regulations (C.R.C., c. 945)

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Regulations are current to 2024-02-06 and last amended on 2024-02-02. Previous Versions

PART XLVIInvestment Tax Credit (continued)

Prescribed Area

 For the purpose of paragraph (c.1) of the definition qualified property in subsection 127(9) of the Act, the area prescribed is the area comprising the Provinces of Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and the Gaspé Peninsula.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/95-244, s. 5

PART XLVIIElection in Respect of Certain Property Owned on December 31, 1971

 Any election by an individual under subsection 26(7) of the Income Tax Application Rules, shall be made by filing with the Minister the form prescribed.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/94-686, s. 48

PART XLVIIIStatus of Corporations and Trusts

[
  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/94-686, s. 79(F)
]
  •  (1) For the purposes of subparagraph (b)(i) of the definition public corporation in subsection 89(1) of the Act, the following conditions are prescribed in respect of a corporation other than a cooperative corporation (within the meaning assigned by section 136 of the Act) or a credit union:

    • (a) a class of shares of the capital stock of the corporation designated by the corporation in its election or by the Minister in his notice to the corporation, as the case may be, shall be qualified for distribution to the public;

    • (b) there shall be no fewer than

      • (i) where the shares of that class are equity shares, 150, and

      • (ii) in any other case, 300

      persons, other than insiders of the corporation, each of whom holds

      • (iii) not less than one block of shares of that class, and

      • (iv) shares of that class having an aggregate fair market value of not less than $500; and

    • (c) insiders of the corporation shall not hold more than 80 per cent of the issued and outstanding shares of that class.

  • (2) For the purposes of subparagraph (c)(i) of the definition public corporation in subsection 89(1) of the Act, the following conditions are prescribed in respect of a corporation:

    • (a) insiders of the corporation shall hold more than 90 per cent of the issued and outstanding shares of each class of shares of the capital stock of the corporation that

      • (i) was, at any time after the corporation last became a public corporation, listed on a designated stock exchange in Canada, or

      • (ii) was a class, designated as described in paragraph (1)(a), by virtue of which the corporation last became a public corporation;

    • (b) in respect of each class of shares described in subparagraph (a)(i) or (ii), there shall be fewer than

      • (i) where the shares of that class are equity shares, 50, and

      • (ii) in any other case, 100

      persons, other than insiders of the corporation, each of whom holds

      • (iii) not less than one block of shares of that class, and

      • (iv) shares of that class having an aggregate fair market value of not less than $500; and

    • (c) there shall be no class of shares of the capital stock of the corporation that is qualified for distribution to the public and complies with the conditions described in paragraphs (1)(b) and (c).

  • (3) Where, by virtue of an amalgamation (within the meaning assigned by section 87 of the Act) of predecessor corporations any one or more of which was, immediately before the amalgamation, a public corporation, shares of any class of the capital stock of any such public corporation that was

    • (a) at any time after the corporation last became a public corporation, listed on a designated stock exchange in Canada, or

    • (b) the class, designated as described in paragraph (1)(a), by virtue of which the corporation last became a public corporation,

    are converted into shares of any class (in this subsection referred to as the “new class”) of the capital stock of the new corporation, the new class shall, for the purposes of subsection (2), be deemed to be a class, designated as described in paragraph (1)(a), by virtue of which the new corporation last became a public corporation.

  • (4) Any election under subparagraphs (b)(i) or (c)(i) of the definition public corporation in subsection 89(1) of the Act shall be made by filing with the Minister the following documents:

    • (a) the form prescribed by the Minister;

    • (b) where the directors of the corporation are legally entitled to administer the affairs of the corporation, a certified copy of their resolution authorizing the election to be made;

    • (c) where the directors of the corporation are not legally entitled to administer the affairs of the corporation, a certified copy of the authorization of the making of the election by the person or persons legally entitled to administer the affairs of the corporation; and

    • (d) a statutory declaration made by a director of the corporation stating that, after reasonable inquiry for the purpose of informing himself in that regard, to the best of his knowledge the corporation complies with all the prescribed conditions that must be complied with at the time the election is made.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/83-268, s. 8
  • SOR/94-686, ss. 74(F), 79(F)
  • SOR/2001-216, s. 3
  • 2007, c. 35, s. 77
  • 2013, c. 34, s. 396(F)

 For the purposes of paragraph 107(1)(a) and subsections 107(1.1), (2) and (4.1) of the Act, the following are prescribed trusts:

  • (a) a trust maintained primarily for the benefit of employees of a corporation or two or more corporations which do not deal at arm’s length with each other, where one of the main purposes of the trust is to hold interests in shares of the capital stock of the corporation or corporations, as the case may be, or any corporation not dealing at arm’s length therewith;

  • (b) a trust established exclusively for the benefit of one or more persons each of whom was, at the time the trust was created, either a person from whom the trust received property or a creditor of that person, where one of the main purposes of the trust is to secure the payments required to be made by or on behalf of that person to such creditor; and

  • (c) a trust all or substantially all of the properties of which consist of shares of the capital stock of a corporation, where the trust was established pursuant to an agreement between two or more shareholders of the corporation and one of the main purposes of the trust is to provide for the exercise of voting rights in respect of those shares pursuant to that agreement.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/90-284, s. 1
  • SOR/92-661, s. 1
  • SOR/94-686, s. 79(F)
  • 2013, c. 34, s. 397

 In applying at any time paragraph 132(6)(c) of the Act, the following are prescribed conditions in respect of a trust:

  • (a) either

    • (i) the following conditions are met:

      • (A) there has been at or before that time a lawful distribution in a province to the public of units of the trust and a prospectus, registration statement or similar document was not, under the laws of the province, required to be filed in respect of the distribution, and

      • (B) the trust

        • (I) was created after 1999 and on or before that time, or

        • (II) satisfies, at that time, the conditions prescribed in section 4801.001, or

    • (ii) a class of the units of the trust is, at that time, qualified for distribution to the public; and

  • (b) in respect of a class of the trust’s units that meets at that time the conditions described in paragraph (a), there are at that time no fewer than 150 beneficiaries of the trust, each of whom holds

    • (i) not less than one block of units of the class, and

    • (ii) units of the class having an aggregate fair market value of not less than $500.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/2001-216, s. 4
  • 2013, c. 34, s. 398

 For the purpose of applying at any particular time subclause 4801(a)(i)(B)(II), the following are the prescribed conditions:

  • (a) the trust was created before 2000;

  • (b) the trust was a unit trust on July 18, 2005;

  • (c) the particular time is after 2003; and

  • (d) the trusts elects by notifying the Minister, in writing before the trust’s filing-due date for its 2012 taxation year, that this section applies to it.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2013, c. 34, s. 399

 For the purpose of subsection 132.11(1) of the Act, a trust that is a money market fund as defined in National Instrument 81-102 Mutual Funds, as amended from time to time, of the Canadian Securities Administrators is a prescribed trust.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/2001-216, s. 5

 For the purposes of the definition eligible business entity in subsection 204.8(1), clause 204.82(2.2)(d)(i)(B) and paragraph 204.82(6)(a) of the Act, a corporation registered under Part III.1 of the Community Small Business Investment Funds Act, chapter 18 of the Statutes of Ontario, 1992, is a prescribed corporation.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/2001-216, s. 5

 For the purpose of paragraph (c) of the definition exempt trust in subsection 233.2(1) of the Act, the following conditions are hereby prescribed in respect of a trust:

  • (a) at least 150 beneficiaries of the trust are beneficiaries in respect of the same class of units of the trust; and

  • (b) at least 150 of the beneficiaries in respect of that class each hold

    • (i) at least one block of units of that class, and

    • (ii) units of that class having a total fair market value of at least $500.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/98-453, s. 1
  •  (1) For the purposes of clause 149(1)(o.2)(iv)(D) of the Act, the following are prescribed persons:

    • (a) a trust all the beneficiaries of which are trusts described in clause 149(1)(o.2)(iv)(B) of the Act;

    • (b) a corporation incorporated before November 17, 1978 solely in connection with, or for the administration of, a registered pension plan;

    • (c) a trust or corporation established by or arising by virtue of an act of a province the principal activities of which are to administer, manage or invest the monies of a pension fund or plan that is established pursuant to an act of the province or an order or regulation made thereunder;

    • (c.1) the Canada Pension Plan Investment Board;

    • (c.2) the Public Sector Pension Investment Board;

    • (c.3) a pooled registered pension plan;

    • (d) a trust or corporation established by or arising by virtue of an act of a province in connection with a scheme or program for the compensation of workers injured in an accident arising out of or in the course of their employment;

    • (e) Her Majesty in right of a province;

    • (f) a trust all of the beneficiaries of which are any combination of

      • (i) registered pension plans,

      • (ii) trusts described in clause 149(1)(o.2)(iv)(B) or (C) of the Act, and

      • (iii) persons described in this subsection;

    • (f.1) the Pension Benefits Guarantee Fund under the Pension Benefits Act, R.S.O. 1990, c. P.8 and any corporation established solely for investing the assets of the Pension Benefits Guarantee Fund; and

    • (g) a corporation all of the shares of the capital stock of which are owned by one or more of the following:

      • (i) registered pension plans,

      • (ii) trusts described in clause 149(1)(o.2)(iv)(B) or (C) of the Act, and

      • (iii) persons described in this subsection.

  • (1.1) For the purposes of subparagraph 127.55(f)(iii) and paragraphs 149(1)(o.4) and 150(1.2)(i) of the Act, a trust is prescribed at any particular time if, at all times after its creation and before the particular time,

    • (a) it was resident in Canada;

    • (b) its only undertaking was the investing of its funds;

    • (c) it never borrowed money except where the borrowing was for a term not exceeding 90 days and it is established that the borrowing was not part of a series of loans or other transactions and repayments;

    • (d) it never accepted deposits; and

    • (e) each of the beneficiaries of the trust was a trust governed by a deferred profit sharing plan, a pooled registered pension plan or a registered pension plan.

  • (1.2) For the purposes of paragraph 8502(i.2), if an amount is borrowed (other than an amount described in paragraph (1.1)(c)) at a particular time by a trust described in subsection (1.1) in relation to defined benefit provisions of one or more registered pension plans that are beneficiaries of the trust, each such defined benefit provision is deemed to have borrowed at the particular time an amount that is equal to the following amount:

    • (a) if paragraph (b) does not apply, the amount determined by the formula

      A × (B ÷ C)

      where

      A
      is the amount borrowed by the trust at the particular time,
      B
      is the fair market value at the particular time of the interest of the defined benefit provision in
      • (i) if the borrowing relates to a particular class of units of the trust, that class of units, and

      • (ii) in any other case, the income and capital of the trust, and

      C
      is the fair market value at the particular time of all interests of defined benefit provisions in
      • (i) if the borrowing relates to a particular class of units of the trust, that class of units, and

      • (ii) in any other case, the income and capital of the trust; and

    • (b) the portion of the amount borrowed by the trust at the particular time that is allocated to the defined benefit provision under an agreement entered into between the trust and the defined benefit provision, provided that the agreement allocates to the beneficiaries the total amount borrowed by the trust.

  • (1.3) If an amount borrowed by a trust is deemed to have been borrowed by a defined benefit provision under subsection (1.2), the amount is deemed not to have been borrowed by the trust for the purposes of paragraph (1.1)(c).

  • (2) [Repealed, 2017, c. 20, s. 33]

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/85-696, s. 14
  • SOR/87-559, s. 1
  • SOR/92-51, s. 8
  • SOR/92-661, s. 2
  • SOR/94-353, s. 1
  • SOR/94-686, s. 79(F)
  • SOR/96-226, s. 1
  • SOR/2003-328, s. 2
  • SOR/2005-264, s. 5
  • SOR/2011-188, s. 18
  • 2012, c. 31, s. 67
  • 2017, c. 20, s. 33
  • 2022, c. 19, s. 87
  • 2023, c. 26, s. 104
 

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