VII, s. 1]
Marginal note:CPP/QPP and UCCB amounts for previous years
(8)Notwithstanding subsections (1) and (6), if
(a)one or more amounts
(i)are received by an individual (other than a trust) in a taxation year as, on account of, in lieu of payment of or in satisfaction of, any benefit under theCanada Pension Planor a provincial pension plan as defined in section 3 of that Act, or
(ii)would be, but for this subsection, included in computing the income of an individual for a taxation year under subsection (6), and
(b)a portion, not less than $300, of the total of those amounts relates to one or more preceding taxation years,
that portion shall, at the option of the individual, not be included in the individual’s income.
Meaning ofincome for the year
(9)For the purposes of paragraphs 56(1)(s) and 56(1)(u),income for the yearof a person means the amount that would, but for those paragraphs, paragraphs 60(v.1) and 60(w) and section 63, be the income of that person for the year.
Meaning ofincome
(9.1)For the purposes of subsection (6),incomeof a person for a taxation year means the amount that would, in the absence of that subsection, paragraphs (1)(s) and (u) and 60(v.1), (w) and (y) and section 63, be the income of the person for the taxation year.
Marginal note:Severability of retirement compensation arrangement
(10)Where a retirement compensation arrangement is part of a plan or arrangement (in this subsection referred to as the “plan”) under which amounts not related to the retirement compensation arrangement are payable or provided, for the purposes of this Act, other than this subsection,
(a)the retirement compensation arrangement shall be deemed to be a separate arrangement independent of other parts of the plan of which it is a part; and
(b)subject to subsection 6(14), amounts paid out of or under the plan shall be deemed to have first been paid out of the retirement compensation arrangement unless a provision in the plan otherwise provides.
Marginal note:Disposition of property by RCA trust
(11)For the purposes of paragraphs 56(1)(x) and 56(1)(z), where, at any time in a year, a trust governed by a retirement compensation arrangement
(a)disposes of property to a person for consideration less than the fair market value of the property at the time of the disposition, or for no consideration,
(b)acquires property from a person for consideration greater than the fair market value of the property at the time of the acquisition, or
(c)permits a person to use or enjoy property of the trust for no consideration or for consideration less than the fair market value of such use or enjoyment,
the amount, if any, by which the fair market value differs from the consideration or, if there is no consideration, the amount of the fair market value shall be deemed to be an amount received at that time by the person out of or under the arrangement that can reasonably be considered to have been received in respect of an office or employment of a taxpayer.
Marginal note:Foreign retirement arrangement
(12)If an amount in respect of a foreign retirement arrangement is, as a result of a transaction, an event or a circumstance, considered to be distributed to an individual under the income tax laws of the country in which the arrangement is established, the amount is, for the purpose of paragraph (1)(a), deemed to be received by the individual as a payment out of the arrangement in the taxation year that includes the time of the transaction, event or circumstance.
Marginal note:Support
56.1(1)For the purposes of paragraph 56(1)(b) and subsection 118(5), where an order or agreement, or any variation thereof, provides for the payment of an amount to a taxpayer or for the benefit of the taxpayer, children in the taxpayer’s custody or both the taxpayer and those children, the amount or any part thereof
(a)when payable, is deemed to be payable to and receivable by the taxpayer; and
(b)when paid, is deemed to have been paid to and received by the taxpayer.
Marginal note:Agreement
(2)For the purposes of section 56, this section and subsection 118(5), the amount determined by the formula
A - B
where
(a)the person’s spouse or common-law partner or former spouse or common-law partner, or
(b)where the amount became payable under an order made by a competent tribunal in accordance with the laws of a province, an individual who is the parent of a child of whom the person is a legal parent,
and
(a)the total of all amounts each of which is an amount included in the total determined for A in respect of the acquisition or improvement of a self-contained domestic establishment in which the taxpayer resides, including any payment of principal or interest in respect of a loan made or indebtedness incurred to finance, in any manner whatever, such acquisition or improvement
exceeds
(b)the total of all amounts each of which is an amount equal to 1/5 of the original principal amount of a loan or indebtedness described in paragraph (a),
is, where the order or written agreement, as the case may be, provides that this subsection and subsection 60.1(2) shall apply to any amount paid or payable thereunder, deemed to be an amount payable to and receivable by the taxpayer as an allowance on a periodic basis, and the taxpayer is deemed to have discretion as to the use of that amount.
Marginal note:Prior payments
(3)For the purposes of this section and section 56, where a written agreement or order of a competent tribunal made at any time in a taxation year provides that an amount received before that time and in the year or the preceding taxation year is to be considered to have been paid and received thereunder,
(a)the amount is deemed to have been received thereunder; and
(b)the agreement or order is deemed, except for the purpose of this subsection, to have been made on the day on which the first such amount was received, except that, where the agreement or order is made after April 1997 and varies a child support amount payable to the recipient from the last such amount received by the recipient before May 1997, each varied amount of child support received under the agreement or order is deemed to have been receivable under an agreement or order the commencement day of which is the day on which the first payment of the varied amount is required to be made.
Marginal note:Definitions
(4)The definitions in this subsection apply in this section and section 56.
child support amountmeans any support amount that is not identified in the agreement or order under which it is receivable as being solely for the support of a recipient who is a spouse or common-law partner or former spouse or common-law partner of the payer or who is a parent of a child of whom the payer is a legal parent. (pension alimentaire pour enfants)
commencement dayat any time of an agreement or order means
(a)where the agreement or order is made after April 1997, the day it is made; and
(b)where the agreement or order is made before May 1997, the day, if any, that is after April 1997 and is the earliest of
(i)the day specified as the commencement day of the agreement or order by the payer and recipient under the agreement or order in a joint election filed with the Minister in prescribed form and manner,
(ii)where the agreement or order is varied after April 1997 to change the child support amounts payable to the recipient, the day on which the first payment of the varied amount is required to be made,
(iii)where a subsequent agreement or order is made after April 1997, the effect of which is to change the total child support amounts payable to the recipient by the payer, the commencement day of the first such subsequent agreement or order, and
(iv)the day specified in the agreement or order, or any variation thereof, as the commencement day of the agreement or order for the purposes of this Act. (date d’exécution)
support amountmeans an amount payable or receivable as an allowance on a periodic basis for the maintenance of the recipient, children of the recipient or both the recipient and children of the recipient, if the recipient has discretion as to the use of the amount, and
(a)the recipient is the spouse or common-law partner or former spouse or common-law partner of the payer, the recipient and payer are living separate and apart because of the breakdown of their marriage or common-law partnership and the amount is receivable under an order of a competent tribunal or under a written agreement; or
(b)the payer is a legal parent of a child of the recipient and the amount is receivable under an order made by a competent tribunal in accordance with the laws of a province. (pension alimentaire)
Marginal note:Reserve claimed for debt forgiveness
56.2There shall be included in computing an individual’s income for a taxation year during which the individual was not a bankrupt the amount, if any, deducted under section 61.2 in computing the individual’s income for the preceding taxation year.
Marginal note:Reserve claimed for debt forgiveness
56.3There shall be included in computing a taxpayer’s income for a taxation year during which the taxpayer was not a bankrupt the amount, if any, deducted under section 61.4 in computing the taxpayer’s income for the preceding taxation year.
Marginal note:Definitions
56.4(1)The following definitions apply in this section.
eligible corporation, of a taxpayer, means a taxable Canadian corporation of which the taxpayer holds, directly or indirectly, shares of the capital stock. (société admissible)
eligible individual, in respect of a vendor, at any time means an individual (other than a trust) who is related to the vendor and who has attained the age of 18 years at or before that time. (particulier admissible)
eligible interest, of a taxpayer, means capital property of the taxpayer that is
(a)a partnership interest in a partnership that carries on a business;
(b)a share of the capital stock of a corporation that carries on a business; or
(c)a share of the capital stock of a corporation 90% or more of the fair market value of which is attributable to eligible interests in one other corporation. (participation admissible)
goodwill amount, of a taxpayer, is an amount the taxpayer has or may become entitled to receive that would, if this Act were read without reference to this section, be required to be included in the proceeds of disposition of a property included in Class 14.1 of Schedule II to theIncome Tax Regulations, or is an amount to which subsection 13(38) applies, in respect of a business carried on by the taxpayer through a permanent establishment located in Canada. (montant pour achalandage)
permanent establishmentmeans a permanent establishment as defined for the purpose of subsection 16.1(1). (établissement stable)
restrictive covenant, of a taxpayer, means an agreement entered into, an undertaking made, or a waiver of an advantage or right by the taxpayer, whether legally enforceable or not, that affects, or is intended to affect, in any way whatever, the acquisition or provision of property or services by the taxpayer or by another taxpayer that does not deal at arm’s length with the taxpayer, other than an agreement or undertaking
(a)that disposes of the taxpayer’s property; or
(b)that is in satisfaction of an obligation described in section 49.1 that is not a disposition except where the obligation being satisfied is in respect of a right to property or services that the taxpayer acquired for less than its fair market value. (clause restrictive)
taxpayerincludes a partnership. (contribuable)
Marginal note:Income — restrictive covenants
(2)There is to be included in computing a taxpayer’s income for a taxation year the total of all amounts each of which is an amount in respect of a restrictive covenant of the taxpayer that is received or receivable in the taxation year by the taxpayer or by a taxpayer with whom the taxpayer does not deal at arm’s length (other than an amount that has been included in computing the taxpayer’s income because of this subsection for a preceding taxation year or in the taxpayer’s eligible corporation’s income because of this subsection for the taxation year or a preceding taxation year).
Marginal note:Non-application of subsection (2)
(3)Subsection (2) does not apply to an amount received or receivable by a particular taxpayer in a taxation year in respect of a restrictive covenant granted by the particular taxpayer to another taxpayer (referred to in this subsection and subsection (4) as the “purchaser”) with whom the particular taxpayer deals at arm’s length (determined without reference to paragraph 251(5)(b)), if
(a)section 5 or 6 applied to include the amount in computing the particular taxpayer’s income for the taxation year or would have so applied if the amount had been received in the taxation year;
(b)the amount would, if this Act were read without reference to this section, be required to be included in the proceeds of disposition of a property included in Class 14.1 of Schedule II to theIncome Tax Regulations, or is an amount to which subsection 13(38) applies, in respect of the business to which the restrictive covenant relates, and the particular taxpayer elects (or if the amount is payable by the purchaser in respect of a business carried on in Canada by the purchaser, the particular taxpayer and the purchaser jointly elect) in prescribed form to apply this paragraph in respect of the amount; or
(c)subject to subsection (9), the amount directly relates to the particular taxpayer’s disposition of property that is, at the time of the disposition, an eligible interest in the partnership or corporation that carries on the business to which the restrictive covenant relates, or that is at that time an eligible interest by virtue of paragraph (c) of the definitioneligible interestin subsection (1) where the other corporation referred to in that paragraph carries on the business to which the restrictive covenant relates, and
(i)the disposition is to the purchaser (or to a person related to the purchaser),
(ii)the amount is consideration for an undertaking by the particular taxpayer not to provide, directly or indirectly, property or services in competition with the property or services provided or to be provided by the purchaser (or by a person related to the purchaser),
(iii)the restrictive covenant may reasonably be considered to have been granted to maintain or preserve the value of the eligible interest disposed of to the purchaser;
(iv)if the restrictive covenant is granted on or after July 18, 2005, subsection 84(3) does not apply to the disposition,
(v)the amount is added to the particular taxpayer’s proceeds of disposition, as defined by section 54, for the purpose of applying this Act to the disposition of the particular taxpayer’s eligible interest, and
(vi)the particular taxpayer and the purchaser elect in prescribed form to apply this paragraph in respect of the amount.
Marginal note:Treatment of purchaser
(4)An amount paid or payable by a purchaser for a restrictive covenant is
(a)if the amount is required because of section 5 or 6 to be included in computing the income of an employee of the purchaser, to be considered to be wages paid or payable by the purchaser to the employee;
(b)if an election has been made under paragraph (3)(b) in respect of the amount, to be considered to be incurred by the purchaser on account of capital for the purpose of determining the cost of the property or for the purposes of subsection 13(35), as the case may be, and not to be an amount paid or payable for all other purposes of the Act; and
(c)if an election has been made under paragraph (3)(c), in respect of the amount and the amount relates to the purchaser’s acquisition of property that is, immediately after the acquisition, an eligible interest of the purchaser, to be included in computing the cost to the purchaser of that eligible interest and considered not to be an amount paid or payable for all other purposes of the Act.
Marginal note:Non-application of section 68
(5)If this subsection applies to a restrictive covenant granted by a taxpayer, section 68 does not apply to deem consideration to be received or receivable by the taxpayer for the restrictive covenant.
Marginal note:Application of subsection (5) — if employee provides covenant
(6)Subsection (5) applies to a restrictive covenant if
(a)the restrictive covenant is granted by an individual to another taxpayer with whom the individual deals at arm’s length (referred to in this subsection as the “purchaser”);
(b)the restrictive covenant directly relates to the acquisition from one or more other persons (in this subsection and subsection (12) referred to as the “vendors”) by the purchaser of an interest, or for civil law purposes a right, in the individual’s employer, in a corporation related to that employer or in a business carried on by that employer;
(c)the individual deals at arm’s length with the employer and with the vendors;
(d)the restrictive covenant is an undertaking by the individual not to provide, directly or indirectly, property or services in competition with property or services provided or to be provided by the purchaser (or by a person related to the purchaser) in the course of carrying on the business to which the restrictive covenant relates;
(e)no proceeds are received or receivable by the individual for granting the restrictive covenant; and
(f)the amount that can reasonably be regarded to be consideration for the restrictive covenant is received or receivable only by the vendors.
Marginal note:Application of subsection (5) — realization of goodwill amount and disposition of property
(7)Subject to subsection (10), subsection (5) applies to a restrictive covenant granted by a taxpayer if
(a)the restrictive covenant is granted by the taxpayer (in this subsection and subsection (8) referred to as the “vendor”) to
(i)another taxpayer (in this subsection referred to as the “purchaser”) with whom the vendor deals at arm’s length (determined without reference to paragraph 251(5)(b)) at the time of the grant of the restrictive covenant, or
(ii)another person who is an eligible individual in respect of the vendor at the time of the grant of the restrictive covenant;
(b)where subparagraph (a)(i) applies, the restrictive covenant is an undertaking of the vendor not to provide, directly or indirectly, property or services in competition with the property or services provided or to be provided by the purchaser (or by a person related to the purchaser) in the course of carrying on the business to which the restrictive covenant relates, and
(i)the amount that can reasonably be regarded as being consideration for the restrictive covenant is
(A)included by the vendor in computing a goodwill amount of the vendor, or
(B)received or receivable by a corporation that was an eligible corporation of the vendor when the restrictive covenant was granted and included by the eligible corporation in computing a goodwill amount of the eligible corporation in respect of the business to which the restrictive covenant relates, or
(ii)it is reasonable to conclude that the restrictive covenant is integral to an agreement in writing,
(A)under which the vendor or the vendor’s eligible corporation disposes of property (other than property described in clause (B) or subparagraph (i)) to the purchaser, or the purchaser’s eligible corporation, for consideration that is received or receivable by the vendor, or the vendor’s eligible corporation, as the case may be, or
(B)under which shares of the capital stock of a corporation (in this subsection and subsection (12) referred to as the “target corporation”) are disposed of to the purchaser or to another person that is related to the purchaser and with whom the vendor deals at arm’s length (determined without reference to paragraph 251(5)(b)),
(c)where subparagraph (a)(ii) applies, the restrictive covenant is an undertaking of the vendor not to provide, directly or indirectly, property or services in competition with the property or services provided or to be provided by the eligible individual (or by an eligible corporation of the eligible individual) in the course of carrying on the business to which the restrictive covenant relates, and
(i)either
(A)the amount that can reasonably be regarded as being consideration for the restrictive covenant is
(I)included by the vendor in computing a goodwill amount of the vendor, or
(II)received or receivable by a corporation that was an eligible corporation of the vendor when the restrictive covenant was granted and included by the eligible corporation in computing a goodwill amount of the eligible corporation in respect of the business to which the restrictive covenant relates, or
(B)it is reasonable to conclude that the restrictive covenant is integral to an agreement in writing
(I)under which the vendor or the vendor’s eligible corporation disposes of property (other than property described in subclause (II) or clause (A)) to the eligible individual, or the eligible individual’s corporation, for consideration that is received or receivable by the vendor, or the vendor’s eligible corporation, as the case may be, or
(II)under which shares of the capital stock of the vendor’s eligible corporation (in this subsection and subsection (12) referred to as the “family corporation”) are disposed of to the eligible individual or the eligible individual’s eligible corporation,
(ii)the vendor is resident in Canada at the time of the grant of the restrictive covenant and the disposition referred to in clause (i)(B), and
(iii)the vendor does not, at any time after the grant of the restrictive covenant and whether directly or indirectly in any manner whatever, have an interest, or for civil law a right, in the family corporation or in the eligible corporation of the eligible individual, as the case may be;
(d)no proceeds are received or receivable by the vendor for granting the restrictive covenant;
(e)subsection 84(3) does not apply in respect of the disposition of a share of the target corporation or family corporation, as the case may be;
(f)the restrictive covenant can reasonably be regarded to have been granted to maintain or preserve the fair market value of any of
(i)the benefit of the expenditure derived from the goodwill amount referred to in subparagraph (b)(i) or clause (c)(i)(A) and for which a joint election referred to in paragraph (g) was made,
(ii)the property referred to in clause (b)(ii)(A) or subclause (c)(i)(B)(I), or
(iii)the shares referred to in clause (b)(ii)(B) or subclause (c)(i)(B)(II); and
(g)a joint election in prescribed form to apply subsection (5) to the amount referred to in subparagraph (b)(i) or clause (c)(i)(A), if otherwise applicable, is made by
(i)in the case of subparagraph (b)(i), the vendor, or the vendor’s eligible corporation, if it is required to include the goodwill amount in computing its income, and the purchaser, or the purchaser’s eligible corporation, if it incurs the expenditure that is the goodwill amount to the vendor or the vendor’s eligible corporation, as the case may be, or
(ii)in the case of clause (c)(i)(A), the vendor, or the vendor’s eligible corporation, if it is required to include the goodwill amount in computing its income, and the eligible individual, or the eligible individual’s eligible corporation, if it incurs the expenditure that is the goodwill amount to the vendor or the vendor’s eligible corporation, as the case may be.
Marginal note:Application of subsection (7) and section 69 — special rules
(8)For the purpose
(a)of applying subsection (7), clause (7)(b)(ii)(A) and subclause (7)(c)(i)(B)(I) apply to a grant of a restrictive covenant only if
(i)the consideration that can reasonably be regarded as being in part the consideration for the restrictive covenant is received or receivable by the vendor or the vendor’s eligible corporation, as the case may be, as consideration for the disposition of the property, and
(ii)if all or a part of the consideration can reasonably be regarded as being for a goodwill amount, subsection (2), paragraph (3)(b), subparagraph (7)(b)(i) or clause (7)(c)(i)(A) applies to that consideration; and
(b)of determining if the conditions described in paragraph (7)(c) have been met, and for the purpose of applying section 69, in respect of a restrictive covenant granted by a vendor, the fair market value of a property is the amount that can reasonably be regarded as being the fair market value of the property if the restrictive covenant were part of the property.
Marginal note:Anti-avoidance rule — non-application of paragraph (3)(c)
(9)Paragraph (3)(c) does not apply to an amount that would, if this Act were read without reference to subsections (2) to (14), be included in computing a taxpayer’s income from a source that is an office or employment or a business or property under paragraph 3(a).
Marginal note:Anti-avoidance — non-application of subsection (7)
(10)Subsection (7) does not apply in respect of a taxpayer’s grant of a restrictive covenant if one of the results of not applying section 68 to the consideration received or receivable in respect of the taxpayer’s grant of the restrictive covenant would be that paragraph 3(a) would not apply to consideration that would, if this Act were read without reference to subsections (2) to (14), be included in computing a taxpayer’s income from a source that is an office or employment or a business or property.
Marginal note:Clarification if subsection (2) applies — where another person receives the amount
(11)For greater certainty, if subsection (2) applies to include in computing a taxpayer’s income an amount received or receivable by another taxpayer, that amount is not to be included in computing the income of that other taxpayer.
Marginal note:Clarification if subsection (5) applies
(12)For greater certainty, if subsection (5) applies in respect of a restrictive covenant,
(a)the amount referred to in paragraph (6)(f) is to be added in computing the amount received or receivable by the vendors as consideration for the disposition of the interest or right referred to in paragraph (6)(b); and
(b)the amount that can reasonably be regarded as being in part consideration received or receivable for a restrictive covenant to which clause (7)(b)(ii)(B) or subclause (7)(c)(i)(B)(II) applies is to be added in computing the consideration that is received or receivable by each taxpayer who disposes of shares of the target corporation, or shares of the family corporation, as the case may be, to the extent of the portion of the consideration that is received or receivable by that taxpayer.
Marginal note:Filing of prescribed form
(13)For the purpose of paragraphs (3)(b) and (c) and subsection (7), an election in prescribed form filed under any of those provisions is to include a copy of the restrictive covenant and be filed
(a)if the person who granted the restrictive covenant was a person resident in Canada when the restrictive covenant was granted, by the person with the Minister on or before the person’s filing-due date for the taxation year that includes the day on which the restrictive covenant was granted; and
(b)in any other case, with the Minister on or before the day that is six months after the day on which the restrictive covenant is granted.
Marginal note:Non-application of section 42
(14)Section 42 does not apply to an amount received or receivable as consideration for a restrictive covenant.
Marginal note:Certain superannuation or pension benefits
57(1)Notwithstanding subparagraph 56(1)(a)(i), there shall be included in computing the income of a taxpayer in respect of a payment received by the taxpayer out of or under a superannuation or pension fund or plan the investment income of which has at some time been exempt from taxation under theIncome War Tax Actby reason of an election for that exemption by the trustees or corporation administering the fund or plan, only that part of the payment that remains after deducting the proportion thereof
(a)that the total of the paid by the taxpayer into or under the fund or plan during the period when its income was exempt by reason of that election is of the total of all amounts paid by the taxpayer into or under the fund or plan, or
(b)that the total of the amounts paid by the taxpayer into or under the fund or plan during the period when its income was exempt by reason of that election together with simple interest on each amount so paid from the end of the year of payment thereof to the commencement of the superannuation allowance or pension at 3% per annum is of the total of all amounts paid by the taxpayer into or under the fund or plan together with simple interest, computed in the same manner, on each amount so paid,
whichever is the greater.
Marginal note:Exception
(2)This section does not apply in respect of a payment received by a taxpayer out of or under a superannuation or pension fund or plan if the taxpayer made no payment into or under the fund or plan.
Marginal note:Limitation
(3)Where a payment, to which subsection 57(1) would otherwise be applicable, is received by a taxpayer out of or under a superannuation or pension fund or plan in respect of a period of service for part only of which the taxpayer made payments into or under the fund or plan, subsection 57(1) is applicable only to that part of the payment which may reasonably be regarded as having been received in respect of the period for which the taxpayer made payments into or under the fund or plan and any part of the payment which may reasonably be regarded as having been received in respect of a period for which the taxpayer made no payments into or under the fund or plan shall be included in computing the taxpayer’s income for the year without any deduction whatever.
Marginal note:Certain payments from pension plan
(4)Where a taxpayer, during the period from August 15, 1944 to December 31, 1945, made a contribution in excess of $300 to or under a registered pension plan in respect of services rendered by the taxpayer before the taxpayer became a contributor, there shall be included in computing the taxpayer’s income in respect of a payment received by the taxpayer out of or under the plan only that part of the payment that remains after deducting the proportion thereof that the contribution so made minus $300 is of the total of the amounts paid by the taxpayer to or under the plan.
Marginal note:Payments to widow, etc., of contributor
(5)Where, in respect of the death of a taxpayer who was a contributor to or under a superannuation or pension fund or plan described in subsection 57(1) or 57(4), a payment is received by a person in a taxation year out of or under the fund or plan, there shall be included in computing the income of that person for the year in respect thereof only that part of the payment that would, if the payment had been received by the taxpayer in the year out of or under the fund or plan, have been included by virtue of this section in computing the income of the taxpayer for the year.
Marginal note:Government annuities and like annuities
58(1)In determining the amount that shall be included in computing the income of a taxpayer in respect of payments received by the taxpayer in a taxation year under contracts entered into before May 26, 1932 with the Government of Canada or annuity contracts like those issued under theGovernment Annuities Actentered into before that day with the government of a province or a corporation incorporated or licensed to carry on an annuities business in Canada, there may be deducted from the total of the payments received the lesser of
(a)the total of the amounts that would have been so received if the contracts had continued in force as they were immediately before June 25, 1940, without the exercise of any option or contractual right to enlarge the annuity by the payment of additional sums or premiums unless those additional sums or premiums had been paid before that day, and
(b)$5,000.
Marginal note:Annuities before 1940
(2)In determining the amount that shall be included in computing the income of a taxpayer in respect of payments received by the taxpayer in a taxation year under annuity contracts entered into after May 25, 1932, and before June 25, 1940, with the Government of Canada or annuity contracts like those issued under theGovernment Annuities Actentered into during that period with the government of a province or a corporation incorporated or licensed to carry on an annuities business in Canada, there may be deducted from the total of the payments received the lesser of
(a)the total of the amounts that would have been received under the contracts if they had continued in force as they were immediately before June 25, 1940, without the exercise of any option or contractual right to enlarge the annuity by the payment of additional sums or premiums unless such additional sums or premiums had been paid before that day, and
(b)$1,200.
Marginal note:Limitation
(3)Where a taxpayer has received annuity payments in respect of which the taxpayer would otherwise be entitled to make deductions under both subsection 58(1) and subsection 58(2),
(a)if the amount deductible under subsection 58(1) is $1,200 or more, he may not make a deduction under subsection 58(2); and
(b)if the amount deductible under subsection 58(1) is less than $1,200, the taxpayer may make one deduction computed as though subsection 58(2) applied to all contracts entered into before June 25, 1940.
Marginal note:Capital element
(4)The amount remaining after deducting from the total of the annuity payments to which this section applies received in a taxation year the deductions permitted by subsection 58(1), 58(2) or 58(3) shall be deemed to be the annuity payment in respect of which the capital element is deductible under paragraph 60(a.
Marginal note:Spouses or common-law partners
(5)Where a taxpayer and the taxpayer’s spouse or common-law partner each received annuity payments in respect of which they may deduct amounts under this section, the amount deductible shall be computed as if their annuities belonged to one person and may be deducted by either of them or be apportioned between them in such manner as is agreed to by them or, in case of disagreement, as the Minister determines.
Marginal note:Pension benefits
(6)This section does not apply to superannuation or pension benefits received out of or under a registered pension plan.
Marginal note:Enlargement of annuity
(7)For the purpose of this section, an annuity shall be deemed to have been enlarged on or after June 25, 1940, if what is payable under the contract has, at any such time, been increased whether by increasing the amount of each periodic payment, by increasing the number of payments or otherwise.
Marginal note:Consideration for foreign resource property
59(1)Where a taxpayer has disposed of a foreign resource property, there shall be included in computing the taxpayer’s income for a taxation year the amount, if any, by which
(a)the portion of the taxpayer’s proceeds of disposition from the disposition of the property that becomes receivable in the year
exceeds
(b)the total of
(i)all amounts each of which is an outlay or expense made or incurred by the taxpayer for the purpose of making the disposition that was not otherwise deductible for the purposes of this Part, and
(ii)where the property is a foreign resource property in respect of a country, the amount designated under this subparagraph in prescribed form filed with the taxpayer’s return of income for the year in respect of the disposition.
Marginal note:Partnerships
(1.1)Where a taxpayer is a member of a partnership in a fiscal period of the partnership, the taxpayer’s share of the amount that would be included under subsection (1) in respect of a disposition of a foreign resource property in computing the partnership’s income for a taxation year if the partnership were a person, the fiscal period were a taxation year, subsection (1) were read without reference to subparagraph (1)(b)(ii) and section 96 were read without reference to paragraph 96(1)(d) is deemed to be proceeds of disposition that become receivable by the taxpayer at the end of the fiscal period in respect of a disposition of the property by the taxpayer.
Marginal note:Deduction under former s. 64 in preceding year
(2)There shall be included in computing a taxpayer’s income for a taxation year any amount that has been deducted as a reserve under subsection 64(1), (1.1) or (1.2) of theIncome Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, in computing the taxpayer’s income for the immediately preceding taxation year.
Marginal note:Recovery of exploration and development expenses
(3.2)There shall be included in computing a taxpayer’s income for a taxation year
(a)any amount referred to in paragraph 66(12.4)(b);
(b)any amount referred to in subsection 66.1(1);
(c)any amount referred to in subsection 66.2(1);
(c.1)any amount referred to in subsection 66.21(3);
(d)any amount referred to in subparagraph 66(10.4)(b)(ii); and
(e)any amount referred to in paragraph 66(10.4)(c).
Marginal note:Amounts to be included in income
(3.3)There shall be included in computing a taxpayer’s income for a taxation year
(a)33 1/3% of the total of all amounts, each of which is the stated percentage of
(i)an amount that became receivable by the taxpayer after December 31, 1983 and in the year (other than an amount that would have been a Canadian oil and gas exploration expense if it had been an expense incurred by the taxpayer at the time it became receivable),
(ii)an amount that became receivable by the taxpayer after December 31, 1983 and in the year that would have been a Canadian oil and gas exploration expense described in paragraph (c) or (d) of the definitionCanadian exploration expensein subsection 66.1(6) in respect of a qualified tertiary oil recovery project if it had been an expense incurred by the taxpayer at the time it became receivable, or
(iii)30% of an amount that became receivable by the taxpayer in the year and in 1984 that would have been a Canadian oil and gas exploration expense (other than an expense described in paragraph (c) of the definitionCanadian exploration expensein subsection 66.1(6) in respect of a qualified tertiary oil recovery project) incurred in respect of non-conventional lands if it had been an expense incurred by the taxpayer at the time it became receivable
and in respect of which the consideration given by the taxpayer was a property (other than a share, depreciable property of a prescribed class or a Canadian resource property) or services the cost of which may reasonably be regarded as having been an expenditure that was added in computing the earned depletion base of the taxpayer or in computing the earned depletion base of a predecessor where the taxpayer is a successor corporation to the predecessor;
(b)33 1/3% of the total of all amounts, each of which is the stated percentage of an amount in respect of a disposition of depreciable property of a prescribed class (other than a disposition of such property that had been used by the taxpayer to any person with whom the taxpayer was not dealing at arm’s length) of the taxpayer after December 11, 1979 and in the year, the capital cost of which was added in computing the earned depletion base of the taxpayer or of a person with whom the taxpayer was not dealing at arm’s length or in computing the earned depletion base of a predecessor where the taxpayer is a successor corporation to the predecessor, that is equal to the lesser of
(i)the proceeds of disposition of the property, and
(ii)the capital cost of the property to the taxpayer, the person with whom the taxpayer was not dealing at arm’s length or the predecessor, as the case may be, computed as if no amount had been added thereto by virtue of paragraph 21(1)(b) or subsection 21(3);
(c)33 1/3% of the total of all amounts, each of which is an amount in respect of a disposition of depreciable property of a prescribed class that is bituminous sands equipment (other than a disposition of such property that had been used by the taxpayer to any person with whom the taxpayer was not dealing at arm’s length) of the taxpayer after December 11, 1979 and before 1990 and in the year, the capital cost of which was added in computing the supplementary depletion base of the taxpayer or of a person with whom the taxpayer was not dealing at arm’s length or in computing the supplementary depletion base of a predecessor where the taxpayer is a successor corporation to the predecessor, that is equal to the lesser of
(i)the proceeds of disposition of the property, and
(ii)the capital cost of the property to the taxpayer, the person with whom the taxpayer was not dealing at arm’s length or the predecessor, as the case may be, computed as if no amount had been added thereto by virtue of paragraph 21(1)(b) or subsection 21(3);
(d)50% of the total of all amounts, each of which is an amount in respect of a disposition of depreciable property of a prescribed class that is enhanced recovery equipment (other than a disposition of such property that had been used by the taxpayer to any person with whom the taxpayer was not dealing at arm’s length) of the taxpayer after December 11, 1979 and before 1990 and in the year, the capital cost of which was added in computing the supplementary depletion base of the taxpayer or of a person with whom the taxpayer was not dealing at arm’s length or in computing the supplementary depletion base of a predecessor where the taxpayer is a successor corporation to the predecessor, that is equal to the lesser of
(i)the proceeds of disposition of the property, and
(ii)the capital cost of the property to the taxpayer, the person with whom the taxpayer was not dealing at arms’ length or the predecessor, as the case may be, computed as if no amount had been added thereto by virtue of paragraph 21(1)(b) or subsection 21(3);
(e)66 2/3% of the total of all amounts, each of which is an amount that became receivable by the taxpayer after December 11, 1979 and before 1990 and in the year and in respect of which the consideration given by the taxpayer was a property (other than a share or a Canadian resource property) or services the cost of which may reasonably be regarded as having been an expenditure in connection with an oil or gas well in respect of which an amount was included in computing the taxpayer’s frontier exploration base or in computing the frontier exploration base of a predecessor where the taxpayer is a successor corporation to the predecessor; and
(f)33 1/3% of the total of all amounts, each of which is the stated percentage of an amount that became receivable by the taxpayer after April 19, 1983 and in the year and in respect of which the consideration given by the taxpayer was a property (other than a share, depreciable property of a prescribed class or a Canadian resource property) or services the cost of which may reasonably be regarded as having been an expenditure that was included in computing the mining exploration depletion base of the taxpayer or in computing the mining exploration depletion base of a specified predecessor of the taxpayer.
Marginal note:Definitions
(3.4)For the purposes of this subsection and subsection 59(3.3),
specified predecessorof a taxpayer means a person who is a predecessor of
(a)the taxpayer, or
(b)a person who is a specified predecessor of the taxpayer; (prédécesseur déterminé)
stated percentagemeans
(a)in respect of an amount described in paragraph 59(3.3)(a) or 59(3.3)(f) that became receivable by a taxpayer,
(i)100% where the amount became receivable before July, 1988,
(ii)50% where the amount became receivable after June, 1988 and before 1990, and
(iii)0% where the amount became receivable after 1989, and
(b)in respect of the disposition described in paragraph 59(3.3)(b) of a depreciable property of a taxpayer,
(i)100% where the property was disposed of before July, 1988,
(ii)50% where the property was disposed of after June, 1988 and before 1990, and
(iii)0% where the property was disposed of after 1989; (pourcentage indiqué)
successor corporationmeans a corporation that has at any time after November 7, 1969 acquired, by purchase, amalgamation, merger, winding-up or otherwise (other than pursuant to an amalgamation that is described in subsection 87(1.2) or a winding-up to which the rules in subsection 88(1) apply), from another person (in this subsection and subsection 59(3.3) referred to as the “predecessor”) all or substantially all of the Canadian resource properties of the predecessor in circumstances in which any of subsection 29(25) of theIncome Tax Application Rulesand subsections 66.7(1) and 66.7(3) to 66.7(5) apply to the corporation. (société remplaçante)
Marginal note:Variation of stated percentage
(3.5)Notwithstanding the definitionstated percentagein subsection 59(3.4), where
(a)an amount became receivable by a taxpayer within 60 days after the end of 1989 in respect of a disposition of property or services, and
(b)the person to whom the disposition was made is a corporation that, before the end of 1989, had issued, or had undertaken to issue, a flow-through share and the corporation renounces under subsection 66(12.66), effective on December 31, 1989, an amount in respect of Canadian exploration expenses that includes an expenditure in respect of the amount referred to in paragraph 59(3.5)(a),
the stated percentage in respect of the amount described in paragraph 59(3.5)(a) shall be 50%.
Marginal note:Definition ofproceeds of disposition
(5)In this section,proceeds of dispositionhas the meaning assigned by section 54.
Marginal note:Definitions in regulations under s. 65
(6)In this section,bituminous sands equipment,Canadian oil and gas exploration expense,earned depletion base,enhanced recovery equipment,frontier exploration base,mining exploration depletion base,non-conventional lands,qualified tertiary oil recovery projectandsupplementary depletion basehave the meanings assigned by regulations made for the purposes of section 65.
Marginal note:Involuntary disposition of resource property
59.1Where in a particular taxation year an amount is deemed by subsection 44(2) to have become receivable by a taxpayer as proceeds of disposition described in paragraph (d) of the definitionproceeds of dispositionin section 54 of any Canadian resource property and the taxpayer elects, in the taxpayer’s return of income under this Part for the year, to have this section apply to those proceeds of disposition,
(a)there shall be deducted in computing the taxpayer’s income for the particular year such amount as the taxpayer may claim, not exceeding the least of,
(i)the total of all those proceeds so becoming receivable in the particular year by the taxpayer to the extent that they have been included in the amount referred to in paragraph (a) of the description of F in the definitioncumulative Canadian development expensein subsection 66.2(5) or in paragraph (a) of the description of F in the definitioncumulative Canadian oil and gas property expensein subsection 66.4(5) in respect of the taxpayer,
(ii)the amount required to be included in computing the taxpayer’s income for the particular year by virtue of paragraph 59(3.2)(c), and
(iii)the taxpayer’s income for the particular year determined without reference to this section;
(b)the amount, if any, by which
(i)the amount deducted under paragraph 59.1(a
exceeds
(ii)the total of such of the Canadian exploration expenses, Canadian development expenses and Canadian oil and gas property expenses made or incurred by the taxpayer in the taxpayer’s ten taxation years immediately following the particular year as were designated by the taxpayer in the taxpayer’s return of income for the year in which the expense was made or incurred,
shall be included in computing the taxpayer’s income for the particular year and, notwithstanding subsections 152(4) and 152(5), such reassessment of the taxpayer’s tax, interest or penalties for any year shall be made as is necessary to give effect to the inclusion; and
(c)any Canadian exploration expense, Canadian development expense or Canadian oil and gas property expense made or incurred by the taxpayer and designated in the taxpayer’s return of income in accordance with subparagraph 59.1(b(ii) shall (except for the purposes of subsections 66(12.1), 66(12.2), 66(12.3) and 66(12.5) and for the purpose of computing the taxpayer’s earned depletion base within the meaning assigned by regulations made for the purposes of section 65) be deemed not to be a Canadian exploration expense, a Canadian development expense or a Canadian oil and gas property expense, as the case may be, of the taxpayer.
Marginal note:Other deductions
60There may be deducted in computing a taxpayer’s income for a taxation year such of the following amounts as are applicable
Marginal note:Capital element of annuity payments
(a)the capital element of each annuity payment included by virtue of paragraph 56(1)(d) in computing the taxpayer’s income for the year, that is to say,
(i)if the annuity was paid under a contract, an amount equal to that part of the payment determined in prescribed manner to have been a return of capital, and
(ii)if the annuity was paid under a will or trust, such part of the payment as can be established by the recipient not to have been paid out of the income of the estate or trust;
Marginal note:Support
(b)the total of all amounts each of which is an amount determined by the formula
A - (B + C)
where
Marginal note:Pension income reallocation
(c)where the taxpayer is a pensioner (as defined in subsection 60.03(1)), any amount that is a split-pension amount (as defined in that subsection) in respect of the pensioner for the taxation year;
(c.1)[Repealed, 1994, c. 7, Sch