VIII, s. 72, c. 8, s. 181998, c. 19, s. 1521999, c. 22, s. 512001, c. 17, s. 1222004, c. 25, s. 2012006, c. 4, s. 782007, c. 2, s. 362009, c. 31, s. 152011, c. 24, s. 422012, c. 31, s. 292013, c. 34, ss. 129, 2722014, c. 20, s. 202015, c. 36, s. 332016, c. 7, s. 37
128.1(1)For the purposes of this Act, where at a particular time a taxpayer becomes resident in Canada,Marginal note:Year-end, fiscal period(a)where the taxpayer is a corporation or a trust,(i)the taxpayer’s taxation year that would otherwise include the particular time shall be deemed to have ended immediately before the particular time and a new taxation year of the taxpayer shall be deemed to have begun at the particular time, and(ii)for the purpose of determining the taxpayer’s fiscal period after the particular time, the taxpayer shall be deemed not to have established a fiscal period before the particular time;Marginal note:Deemed disposition(b)the taxpayer is deemed to have disposed, at the time (in this subsection referred to as the “time of disposition”) that is immediately before the time that is immediately before the particular time, of each property owned by the taxpayer, other than, if the taxpayer is an individual,(i)property that is a taxable Canadian property,(ii)property that is described in the inventory of a business carried on by the taxpayer in Canada at the time of disposition,(iii)property included in Class 14.1 of Schedule II to theIncome Tax Regulations, in respect of a business carried on by the taxpayer in Canada at the time of disposition, and(iv)an excluded right or interest of the taxpayer, other than an interest described in paragraph (k) of the definitionexcluded right or interestin subsection (10),(v)[Repealed, 2001, c. 17, s. 123]for proceeds equal to its fair market value at the time of disposition;Marginal note:Deemed acquisition(c)the taxpayer shall be deemed to have acquired at the particular time each property deemed by paragraph 128.1(1)(b) to have been disposed of by the taxpayer, at a cost equal to the proceeds of disposition of the property;Marginal note:Deemed dividend to immigrating corporation(c.1)if the taxpayer is a particular corporation that immediately before the time of disposition owned a share of the capital stock of another corporation resident in Canada, a dividend is deemed to have been paid by the other corporation, and received by the particular corporation, immediately before the time of disposition, equal to the amount, if any, by which the fair market value of the share immediately before the time of disposition exceeds the total of(i)the paid-up capital in respect of the share immediately before the time of disposition, and(ii)if the share immediately before the time of disposition was taxable Canadian property that is not treaty-protected property, the amount by which, at the time of disposition, the fair market value of the share exceeds its cost amount;Marginal note:Deemed dividend to shareholder of immigrating corporation(c.2)if the taxpayer is a corporation and an amount has been added to the paid-up capital in respect of a class of shares of the corporation’s capital stock because of paragraph (2)(b),(i)the corporation is deemed to have paid, immediately before the time of disposition, a dividend on the issued shares of the class equal to the amount of the paid-up capital adjustment in respect of the class, and(ii)a dividend is deemed to have been received, immediately before the time of disposition, by each person (other than a person in respect of whom the corporation is a foreign affiliate) who held any of the issued shares of the class equal to that proportion of the dividend so deemed to have been paid that the number of shares of the class held by the person immediately before the time of disposition is of the number of issued shares of the class outstanding immediately before the time of disposition;Marginal note:Foreign affiliate dumping — immigrating corporation(c.3)if the taxpayer is a corporation that was, immediately before the particular time, controlled by one non-resident person or, if no single non-resident person controlled the CRIC, a group of non-resident persons not dealing with each other at arm’s length (in this section, that one non-resident person, or each member of the group of non-resident persons, as the case may be, is referred to as a “parent”, and the group of non-resident persons, if any, is referred to as the “group of parents”) and the taxpayer owned, immediately before the particular time, one or more shares of one or more non-resident corporations (each of which is in this paragraph referred to as a “subject affiliate”) that, immediately after the particular time, were — or that became, as part of a transaction or event or series of transactions or events that includes the taxpayer having become resident in Canada — foreign affiliates of the taxpayer, then(i)in computing the paid-up capital, at any time after the time that is immediately after the particular time, of any particular class of shares of the capital stock of the taxpayer there is to be deducted the amount determined by the formulaA × B/CwhereAis the lesser of(A)the paid-up capital in respect of all of the shares of the capital stock of the taxpayer at the time that is immediately after the particular time, and(B)the total of all amounts each of which is the fair market value at the particular time of(I)a share of the capital stock of a subject affiliate owned by the taxpayer at the particular time, or(II)an amount owing by the subject affiliate to the taxpayer at the particular time,Bis the paid-up capital in respect of the particular class of shares of the capital stock of the taxpayer at the time that is immediately after the particular time, andCis the paid-up capital in respect of all the shares of the capital stock of the taxpayer at the time that is immediately after the particular time, and(ii)for the purposes of Part XIII, the taxpayer is deemed, immediately after the particular time, to have paid to each parent, and each parent is deemed, immediately after the particular time, to have received from the taxpayer, a dividend in an amount determined by the formula(A – B) × C/DwhereAis the amount determined under clause (B) of the description of A in subparagraph (i),Bis the amount determined under clause (A) of the description of A in subparagraph (i),Cis the fair market value, immediately after the particular time, of the shares of the capital stock of the taxpayer that are held, directly or indirectly, by the parent, andDis the total of all amounts each of which is the fair market value, immediately after the particular time, of the shares of the capital stock of the taxpayer that are held, directly or indirectly, by a parent.Marginal note:Foreign affiliate(d)where the taxpayer was, immediately before the particular time, a foreign affiliate of another taxpayer that is resident in Canada,(i)the affiliate is deemed to have been a controlled foreign affiliate of the other taxpayer immediately before the particular time, and(ii)the prescribed amount is to be included in the foreign accrual property income of the affiliate for its taxation year that ends immediately before the particular time.Marginal note:Trusts subject to subsection 94(3)(1.1)Paragraph (1)(b) does not apply, at a time in a trust’s particular taxation year, to the trust if the trust is resident in Canada for the particular taxation year for the purpose of computing its income.Marginal note:Trusts and partnerships look-through rule(1.2)For the purposes of this subsection and paragraph (1)(c.1), if at any time shares of the capital stock of a corporation resident in Canada are owned by a trust or a partnership (each referred to in this subsection as a “conduit”), each person or partnership with an interest as a beneficiary under the conduit or that is a member of the conduit (each referred to in this subsection as a “holder”), as the case may be, is deemed to own the shares of each class of the capital stock of the corporation that are owned by the conduit the number of which is determined by the formulaA × B/CwhereAis the total number of shares of the class of the capital stock of the corporation that is owned by the conduit at that time;Bis the fair market value, at that time, of the holder’s interest in the conduit; andCis the total fair market value, at that time, of all interests in the conduit.Marginal note:Paid-up capital adjustment(2)If a corporation becomes resident in Canada at a particular time,(a)for the purposes of subsection (1) and this subsection, thepaid-up capital adjustmentin respect of a particular class of shares of the corporation’s capital stock in respect of that acquisition of residence is the positive or negative amount determined by the formula(A × B/C) - DwhereAis the amount, if any, by which(i)the total of all amounts each of which is an amount deemed by paragraph (1)(c) to be the cost to the corporation of property deemed under that paragraph to have been acquired by the corporation at the particular timeexceeds(ii)the total of all amounts each of which is the amount of a debt owing by the corporation, or any other obligation of the corporation to pay an amount, that is outstanding at the particular time,Bis the fair market value at the particular time of all of the shares of the particular class,Cis the total of all amounts each of which is the fair market value at the particular time of all of the shares of a class of shares of the corporation’s capital stock, andDis the paid-up capital at the particular time, determined without reference to this subsection, in respect of the particular class; and(b)for the purposes of this Act, in computing the paid-up capital in respect of a class of shares of the corporation’s capital stock at any time after the particular time and before the time, if any, at which the corporation next becomes resident in Canada, there shall be(i)added the amount of the paid-up capital adjustment in respect of the particular class, if that amount is positive and the corporation so elects for all such classes in respect of that acquisition of residence by notifying the Minister in writing within 90 days after the particular time, and(ii)deducted, if the amount of the paid-up capital adjustment in respect of the particular class is negative, the absolute value of that amount.Marginal note:Paid-up capital adjustment(3)In computing the paid-up capital at any time in respect of a class of shares of the capital stock of a corporation(a)there is to be deducted an amount equal to the lesser of A and B, and added an amount equal to the lesser of A and C, whereAis the absolute value of the difference between(i)the total of all amounts deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of the class paid before that time by the corporation, and(ii)the total that would be determined under subparagraph (i) if this Act were read without reference to subsection (2),Bis the total of all amounts required by subsection (2) to be added in computing the paid-up capital in respect of the class before that time, andCis the total of all amounts required by subsection (2) to be deducted in computing the paid-up capital in respect of the class before that time; and(b)there is to be added an amount equal to the lesser of(i)the amount, if any, by which(A)the total of all amounts deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of the class paid after March 28, 2012 and before that time by the corporationexceeds(B)the total that would be determined under clause (A) if this Act were read without reference to subparagraph (c.3)(i), and(ii)the total of all amounts required by subparagraph (c.3)(i) to be deducted in computing the paid-up capital in respect of the class before that time.Marginal note:Emigration(4)For the purposes of this Act, where at a particular time a taxpayer ceases to be resident in Canada,Marginal note:Year-end, fiscal period(a)where the taxpayer is a corporation or a trust,(i)the taxpayer’s taxation year that would otherwise include the particular time shall be deemed to have ended immediately before the particular time and a new taxation year of the taxpayer shall be deemed to have begun at the particular time, and(ii)for the purpose of determining the taxpayer’s fiscal period after the particular time, the taxpayer shall be deemed not to have established a fiscal period before the particular time;Marginal note:Fiscal period(a.1)if the taxpayer is an individual (other than a trust) and carries on a business at the particular time, otherwise than through a permanent establishment (as defined by regulation) in Canada,(i)the fiscal period of the business is deemed to have ended immediately before the particular time and a new fiscal period of the business is deemed to have begun at the particular time, and(ii)for the purpose of determining the fiscal period of the business after the particular time, the taxpayer is deemed not to have established a fiscal period of the business before the particular time;Marginal note:Deemed disposition(b)the taxpayer is deemed to have disposed, at the time (in this paragraph and paragraph (d) referred to as the “time of disposition”) that is immediately before the time that is immediately before the particular time, of each property owned by the taxpayer other than, if the taxpayer is an individual,(i)real or immovable property situated in Canada, a Canadian resource property or a timber resource property,(ii)capital property used in, property included in Class 14.1 of Schedule II to theIncome Tax Regulationsin respect of or property described in the inventory of, a business carried on by the taxpayer through apermanent establishment(as defined by regulation) in Canada at the particular time,(iii)an excluded right or interest of the taxpayer,(iv)if the taxpayer is not a trust and was not, during the 120-month period that ends at the particular time, resident in Canada for more than 60 months, property that was owned by the taxpayer at the time the taxpayer last became resident in Canada or that was acquired by the taxpayer by inheritance or bequest after the taxpayer last became resident in Canada, and(v)any property in respect of which the taxpayer elects under paragraph (6)(a) for the taxation year that includes the first time, after the particular time, at which the taxpayer becomes resident in Canada,for proceeds equal to its fair market value at the time of disposition, which proceeds are deemed to have become receivable and to have been received by the taxpayer at the time of disposition;Marginal note:Employee life and health trust(b.1)notwithstanding paragraph (b), if the taxpayer is or was at any time an employee life and health trust,(i)the taxpayer is deemed(A)to have disposed, at the time (in this paragraph referred to as the “time of disposition”) that is immediately before the time that is immediately before the particular time, of each property owned by the taxpayer for proceeds equal to its fair market value at the time of disposition, which proceeds are deemed to have become receivable and to have been received by the taxpayer at the time of disposition, and(B)to have carried on a business at the time of disposition, and(ii)each property of the taxpayer is deemed(A)to have been described in the inventory of the business referred to in clause (i)(B), and(B)to have a cost of nil at the time of disposition;Marginal note:Reacquisition(c)the taxpayer is deemed to have reacquired, at the particular time, each property deemed by paragraph (b) or (b.1) to have been disposed of by the taxpayer, at a cost equal to the proceeds of disposition of the property;Marginal note:Individual — elective disposition(d)notwithstanding paragraphs (b) to (c), if the taxpayer is an individual (other than a trust) and so elects in prescribed form and manner in respect of a property described in subparagraph (b)(i) or (ii),(i)the taxpayer is deemed to have disposed of the property at the time of disposition for proceeds equal to its fair market value at that time and to have reacquired the property at the particular time at a cost equal to those proceeds,(ii)the taxpayer’s income for the taxation year that includes the particular time is deemed to be the greater of(A)that income determined without reference to this subparagraph, and(B)the lesser of(I)that income determined without reference to this subsection, and(II)that income determined without reference to subparagraph (i), and(iii)each of the taxpayer’s non-capital loss, net capital loss, restricted farm loss, farm loss and limited partnership loss for the taxation year that includes the particular time is deemed to be the lesser of(A)that amount determined without reference to this subparagraph, and(B)the greater of(I)that amount determined without reference to this subsection, and(II)that amount determined without reference to subparagraph (i); andMarginal note:Employee CCPC stock option shares(d.1)if the taxpayer is deemed by paragraph (b) to have disposed of a share that was acquired before February 28, 2000 under circumstances to which subsection 7(1.1) applied, there shall be deducted from the taxpayer’s proceeds of disposition the amount that would, if section 7 were read without reference to subsection 7(1.6), be added under paragraph 53(1)(j) in computing the adjusted cost base to the taxpayer of the share as a consequence of the deemed disposition.(e) and (f)[Repealed, 2001, c. 17, s. 123]Marginal note:Instalment interest(5)If an individual is deemed by subsection (4) to have disposed of a property in a taxation year, in applying sections 155 and 156 and subsections 156.1(1) to (3) and 161(2), (4) and (4.01) and any regulations made for the purposes of those provisions, the individual’s total tax payable under this Part for the year is deemed to be the lesser of(a)the individual’s total tax payable under this Part for the year, determined before taking into consideration the specified future tax consequences for the year, and(b)the amount that would be determined under paragraph (a) if subsection (4) did not apply to the individual for the year.Marginal note:Returning former resident(6)If an individual (other than a trust) becomes resident in Canada at a particular time in a taxation year and the last time (in this subsection referred to as the “emigration time”), before the particular time, at which the individual ceased to be resident in Canada was after October 1, 1996,(a)subject to paragraph (b), if the individual so elects in writing and files the election with the Minister on or before the individual’s filing-due date for the year, paragraphs (4)(b) and (c) do not apply to the individual’s cessation of residence at the emigration time in respect of all properties that were taxable Canadian properties of the individual throughout the period that began at the emigration time and that ends at the particular time;(b)where, if a property in respect of which an election under paragraph (a) is made had been acquired by the individual at the emigration time at a cost equal to its fair market value at the emigration time and had been disposed of by the individual immediately before the particular time for proceeds of disposition equal to its fair market value immediately before the particular time, the application of subsection 40(3.7) would reduce the amount that would, but for that subsection and this subsection, be the individual’s loss from the disposition,(i)the individual is deemed to have disposed of the property at the time of disposition (within the meaning assigned by paragraph (4)(b)) in respect of the emigration time for proceeds of disposition equal to the total of(A)the adjusted cost base to the individual of the property immediately before the time of disposition, and(B)the amount, if any, by which that reduction exceeds the lesser of(I)the adjusted cost base to the individual of the property immediately before the time of disposition, and(II)the amount, if any, that the individual specifies for the purposes of this paragraph in the election under paragraph (a) in respect of the property,(ii)the individual is deemed to have reacquired the property at the emigration time at a cost equal to the amount, if any, by which the amount determined under clause (i)(A) exceeds the lesser of that reduction and the amount specified by the individual under subclause (i)(B)(II), and(iii)for the purpose of section 119, the individual is deemed to have disposed of the property immediately before the particular time;(c)if the individual so elects in writing and files the election with the Minister on or before the individual’s filing-due date for the year, in respect of each property that the individual owned throughout the period that began at the emigration time and that ends at the particular time and that is deemed by paragraph (1)(b) to have been disposed of because the individual became resident in Canada, notwithstanding paragraphs (1)(c) and (4)(b) the individual’s proceeds of disposition at the time of disposition (within the meaning assigned by paragraph (4)(b)), and the individual’s cost of acquiring the property at the particular time, are deemed to be those proceeds and that cost, determined without reference to this paragraph, minus the least of(i)the amount that would, but for this paragraph, have been the individual’s gain from the disposition of the property deemed by paragraph (4)(b) to have occurred,(ii)the fair market value of the property at the particular time, and(iii)the amount that the individual specifies for the purposes of this paragraph in the election; and(d)notwithstanding subsections 152(4) to (5), any assessment of tax that is payable under this Act by the individual for any taxation year that is before the year that includes the particular time and that is not before the year that includes the emigration time shall be made that is necessary to take an election under this subsection into account, except that no such assessment shall affect the computation of(i)interest payable under this Act to or by a taxpayer in respect of any period that is before the day on which the taxpayer’s return of income for the taxation year that includes the particular time is filed, or(ii)any penalty payable under this Act.Marginal note:Deemed taxable Canadian property(6.1)For the purposes of paragraph (6)(a), a property is deemed to be taxable Canadian property of the individual throughout the period that began at the emigration time and that ends at the particular time if(a)the emigration time is before March 5, 2010; and(b)the property was taxable Canadian property of the individual on March 4, 2010.Marginal note:Returning trust beneficiary(7)If an individual (other than a trust)(a)becomes resident in Canada at a particular time in a taxation year,(b)owns at the particular time a property that the individual last acquired on a trust distribution to which subsection 107(2) would, but for subsection 107(5), have applied and at a time (in this subsection referred to as the “distribution time”) that was after October 1, 1996 and before the particular time, and(c)was a beneficiary of the trust at the last time, before the particular time, at which the individual ceased to be resident in Canada,the following rules apply:(d)subject to paragraphs (e) and (f), if the individual and the trust jointly so elect in writing and file the election with the Minister on or before the earlier of their filing-due dates for their taxation years that include the particular time, subsection 107(2.1) does not apply to the distribution in respect of all properties acquired by the individual on the distribution that were taxable Canadian properties of the individual throughout the period that began at the distribution time and that ends at the particular time,(e)paragraph (f) applies in respect of the individual, the trust and a property in respect of which an election under paragraph (d) is made where, if the individual(i)had been resident in Canada at the distribution time,(ii)had acquired the property at the distribution time at a cost equal to its fair market value at that time,(iii)had ceased to be resident in Canada immediately after the distribution time, and(iv)had, immediately before the particular time, disposed of the property for proceeds of disposition equal to its fair market value immediately before the particular time,the application of subsection 40(3.7) would reduce the amount that would, but for that subsection and this subsection, have been the individual’s loss from the disposition,(f)where this paragraph applies in respect of an individual, a trust and a property,(i)notwithstanding paragraph 107(2.1)(a), the trust is deemed to have disposed of the property at the distribution time for proceeds of disposition equal to the total of(A)the cost amount to the trust of the property immediately before the distribution time, and(B)the amount, if any, by which the reduction under subsection 40(3.7) described in paragraph (e) exceeds the lesser of(I)the cost amount to the trust of the property immediately before the distribution time, and(II)the amount, if any, which the individual and the trust jointly specify for the purposes of this paragraph in the election under paragraph (d) in respect of the property, and(ii)notwithstanding paragraph 107(2.1)(b), the individual is deemed to have acquired the property at the distribution time at a cost equal to the amount, if any, by which the amount otherwise determined under paragraph 107(2)(b) exceeds the lesser of the reduction under subsection 40(3.7) described in paragraph (e) and the amount specified under subclause (i)(B)(II),(g)if the individual and the trust jointly so elect in writing and file the election with the Minister on or before the later of their filing-due dates for their taxation years that include the particular time, in respect of each property that the individual owned throughout the period that began at the distribution time and that ends at the particular time and that is deemed by paragraph (1)(b) to have been disposed of because the individual became resident in Canada, notwithstanding paragraphs 107(2.1)(a) and (b), the trust’s proceeds of disposition under paragraph 107(2.1)(a) at the distribution time, and the individual’s cost of acquiring the property at the particular time, are deemed to be those proceeds and that cost determined without reference to this paragraph, minus the least of(i)the amount that would, but for this paragraph, have been the trust’s gain from the disposition of the property deemed by paragraph 107(2.1)(a) to have occurred,(ii)the fair market value of the property at the particular time, and(iii)the amount that the individual and the trust jointly specify for the purposes of this paragraph in the election,(h)if the trust ceases to exist before the individual’s filing-due date for the individual’s taxation year that includes the particular time,(i)an election or specification described in this subsection may be made by the individual alone in writing if the election is filed with the Minister on or before that filing-due date, and(ii)if the individual alone makes such an election or specification, the individual and the trust are jointly and severally, or solidarily, liable for any amount payable under this Act by the trust as a result of the election or specification, and(i)notwithstanding subsections 152(4) to (5), such assessment of tax payable under the Act by the trust or the individual for any year that is before the year that includes the particular time and that is not before the year that includes the distribution time shall be made as is necessary to take an election under this subsection into account, except that no such assessment shall affect the computation of(i)interest payable under this Act to or by the trust or the individual in respect of any period that is before the individual’s filing-due date for the taxation year that includes the particular time, or(ii)any penalty payable under this Act.Marginal note:Post-emigration loss(8)If an individual (other than a trust)(a)was deemed by paragraph (4)(b) to have disposed of a capital property at any particular time after October 1, 1996,(b)has disposed of the property at a later time at which the property was a taxable Canadian property of the individual, and(c)so elects in writing in the individual’s return of income for the taxation year that includes the later time,there shall, except for the purpose of paragraph (4)(c), be deducted from the individual’s proceeds of disposition of the property at the particular time, and added to the individual’s proceeds of disposition of the property at the later time, an amount equal to the least of(d)the amount specified in respect of the property in the election,(e)the amount that would, but for the election, be the individual’s gain from the disposition of the property at the particular time, and(f)the amount that would be the individual’s loss from the disposition of the property at the later time, if the loss were determined having reference to every other provision of this Act including, for greater certainty, subsection 40(3.7) and section 112, but without reference to the election.Marginal note:Information reporting(9)An individual who ceases at a particular time in a taxation year to be resident in Canada, and who owns immediately after the particular time one or more reportable properties the total fair market value of which at the particular time is greater than $25,000, shall file with the Minister in prescribed form, on or before the individual’s filing-due date for the year, a list of all the reportable properties that the individual owned immediately after the particular time.Marginal note:Definitions(10)The definitions in this subsection apply in this section.excluded right or interestexcluded right or interestof a taxpayer who is an individual means(a)a right of the individual under, or an interest of the individual in a trust governed by,(i)a registered retirement savings plan or a plan referred to in subsection 146(12) as an “amended plan”,(ii)a registered retirement income fund,(iii)a registered education savings plan,(iii.1)a registered disability savings plan,(iii.2)a TFSA,(iii.3)a FHSA,(iv)a deferred profit sharing plan or a plan referred to in subsection 147(15) as a “revoked plan”,(v)an employees profit sharing plan,(vi)an employee benefit plan (other than a plan described in subparagraph (b)(i) or (ii)),(vi.1)an employee life and health trust,(vii)a plan or arrangement (other than an employee benefit plan) under which the individual has a right to receive in a year remuneration in respect of services rendered by the individual in the year or a prior year,(viii)a superannuation or pension fund or plan (other than an employee benefit plan),(ix)a retirement compensation arrangement,(x)a foreign retirement arrangement, or(xi)a registered supplementary unemployment benefit plan;(b)a right of the individual to a benefit under an employee benefit plan that is(i)a plan or arrangement described in paragraph (j) of the definitionsalary deferral arrangementin subsection 248(1) that would, but for paragraphs (j) and (k) of that definition, be a salary deferral arrangement, or(ii)a plan or arrangement that would, but for paragraph 6801(c) of theIncome Tax Regulations, be a salary deferral arrangement,to the extent that the benefit can reasonably be considered to be attributable to services rendered by the individual in Canada;(c)a right of the individual under an agreement referred to in subsection 7(1);(d)a right of the individual to a retiring allowance;(e)a right of the individual under, or an interest of the individual in, a trust that is(i)an employee trust,(ii)an amateur athlete trust,(iii)a cemetery care trust, or(iv)a trust governed by an eligible funeral arrangement;(f)a right of the individual to receive a payment under(i)an annuity contract, or(ii)an income-averaging annuity contract;(g)a right of the individual to a benefit under(i)theCanada Pension Planor a provincial plan described in section 3 of that Act,(ii)theOld Age Security Act, or(iii)[Repealed, 2011, c. 24, s. 43](iv)a plan or arrangement instituted by the social security legislation of a country other than Canada or of a state, province or other political subdivision of such a country;(h)a right of the individual to a benefit described in any of subparagraphs 56(1)(a)(iii) to (vi);(i)a right of the individual to a payment out of a NISA Fund No. 2;(j)an interest of the individual in a personal trust resident in Canada if the interest was never acquired for consideration and did not arise as a consequence of a qualifying disposition by the individual (within the meaning that would be assigned by subsection 107.4(1) if that subsection were read without reference to paragraphs 107.4(1)(h) and (i));(k)an interest of the individual in a non-resident testamentary trust that is an estate that arose on and as a consequence of a death if(i)the interest was never acquired for consideration, and(ii)the estate has been in existence for no more than 36 months; or(l)an interest of the individual in a life insurance policy in Canada, except for that part of the policy in respect of which the individual is deemed by paragraph 138.1(1)(e) to have an interest in a related segregated fund trust. (droit, participation ou intérêt exclu)reportable propertyreportable propertyof an individual at a particular time means any property other than(a)money that is legal tender in Canada and deposits of such money;(b)property that would be an excluded right or interest of the individual if the definitionexcluded right or interestin this subsection were read without reference to paragraphs (c), (j) and (l) of that definition;(c)if the individual is not a trust and was not, during the 120-month period that ends at the particular time, resident in Canada for more than 60 months, property described in subparagraph (4)(b)(iv) that is not taxable Canadian property; and(d)any item of personal-use property the fair market value of which, at the particular time, is less than $10,000. (bien à déclarer)
Marginal note:Year-end, fiscal period(a)where the taxpayer is a corporation or a trust,(i)the taxpayer’s taxation year that would otherwise include the particular time shall be deemed to have ended immediately before the particular time and a new taxation year of the taxpayer shall be deemed to have begun at the particular time, and(ii)for the purpose of determining the taxpayer’s fiscal period after the particular time, the taxpayer shall be deemed not to have established a fiscal period before the particular time;Marginal note:Deemed disposition(b)the taxpayer is deemed to have disposed, at the time (in this subsection referred to as the “time of disposition”) that is immediately before the time that is immediately before the particular time, of each property owned by the taxpayer, other than, if the taxpayer is an individual,(i)property that is a taxable Canadian property,(ii)property that is described in the inventory of a business carried on by the taxpayer in Canada at the time of disposition,(iii)property included in Class 14.1 of Schedule II to theIncome Tax Regulations, in respect of a business carried on by the taxpayer in Canada at the time of disposition, and(iv)an excluded right or interest of the taxpayer, other than an interest described in paragraph (k) of the definitionexcluded right or interestin subsection (10),(v)[Repealed, 2001, c. 17, s. 123]for proceeds equal to its fair market value at the time of disposition;Marginal note:Deemed acquisition(c)the taxpayer shall be deemed to have acquired at the particular time each property deemed by paragraph 128.1(1)(b) to have been disposed of by the taxpayer, at a cost equal to the proceeds of disposition of the property;Marginal note:Deemed dividend to immigrating corporation(c.1)if the taxpayer is a particular corporation that immediately before the time of disposition owned a share of the capital stock of another corporation resident in Canada, a dividend is deemed to have been paid by the other corporation, and received by the particular corporation, immediately before the time of disposition, equal to the amount, if any, by which the fair market value of the share immediately before the time of disposition exceeds the total of(i)the paid-up capital in respect of the share immediately before the time of disposition, and(ii)if the share immediately before the time of disposition was taxable Canadian property that is not treaty-protected property, the amount by which, at the time of disposition, the fair market value of the share exceeds its cost amount;Marginal note:Deemed dividend to shareholder of immigrating corporation(c.2)if the taxpayer is a corporation and an amount has been added to the paid-up capital in respect of a class of shares of the corporation’s capital stock because of paragraph (2)(b),(i)the corporation is deemed to have paid, immediately before the time of disposition, a dividend on the issued shares of the class equal to the amount of the paid-up capital adjustment in respect of the class, and(ii)a dividend is deemed to have been received, immediately before the time of disposition, by each person (other than a person in respect of whom the corporation is a foreign affiliate) who held any of the issued shares of the class equal to that proportion of the dividend so deemed to have been paid that the number of shares of the class held by the person immediately before the time of disposition is of the number of issued shares of the class outstanding immediately before the time of disposition;Marginal note:Foreign affiliate dumping — immigrating corporation(c.3)if the taxpayer is a corporation that was, immediately before the particular time, controlled by one non-resident person or, if no single non-resident person controlled the CRIC, a group of non-resident persons not dealing with each other at arm’s length (in this section, that one non-resident person, or each member of the group of non-resident persons, as the case may be, is referred to as a “parent”, and the group of non-resident persons, if any, is referred to as the “group of parents”) and the taxpayer owned, immediately before the particular time, one or more shares of one or more non-resident corporations (each of which is in this paragraph referred to as a “subject affiliate”) that, immediately after the particular time, were — or that became, as part of a transaction or event or series of transactions or events that includes the taxpayer having become resident in Canada — foreign affiliates of the taxpayer, then(i)in computing the paid-up capital, at any time after the time that is immediately after the particular time, of any particular class of shares of the capital stock of the taxpayer there is to be deducted the amount determined by the formulaA × B/CwhereAis the lesser of(A)the paid-up capital in respect of all of the shares of the capital stock of the taxpayer at the time that is immediately after the particular time, and(B)the total of all amounts each of which is the fair market value at the particular time of(I)a share of the capital stock of a subject affiliate owned by the taxpayer at the particular time, or(II)an amount owing by the subject affiliate to the taxpayer at the particular time,Bis the paid-up capital in respect of the particular class of shares of the capital stock of the taxpayer at the time that is immediately after the particular time, andCis the paid-up capital in respect of all the shares of the capital stock of the taxpayer at the time that is immediately after the particular time, and(ii)for the purposes of Part XIII, the taxpayer is deemed, immediately after the particular time, to have paid to each parent, and each parent is deemed, immediately after the particular time, to have received from the taxpayer, a dividend in an amount determined by the formula(A – B) × C/DwhereAis the amount determined under clause (B) of the description of A in subparagraph (i),Bis the amount determined under clause (A) of the description of A in subparagraph (i),Cis the fair market value, immediately after the particular time, of the shares of the capital stock of the taxpayer that are held, directly or indirectly, by the parent, andDis the total of all amounts each of which is the fair market value, immediately after the particular time, of the shares of the capital stock of the taxpayer that are held, directly or indirectly, by a parent.Marginal note:Foreign affiliate(d)where the taxpayer was, immediately before the particular time, a foreign affiliate of another taxpayer that is resident in Canada,(i)the affiliate is deemed to have been a controlled foreign affiliate of the other taxpayer immediately before the particular time, and(ii)the prescribed amount is to be included in the foreign accrual property income of the affiliate for its taxation year that ends immediately before the particular time.
(i)the taxpayer’s taxation year that would otherwise include the particular time shall be deemed to have ended immediately before the particular time and a new taxation year of the taxpayer shall be deemed to have begun at the particular time, and(ii)for the purpose of determining the taxpayer’s fiscal period after the particular time, the taxpayer shall be deemed not to have established a fiscal period before the particular time;
(i)property that is a taxable Canadian property,(ii)property that is described in the inventory of a business carried on by the taxpayer in Canada at the time of disposition,(iii)property included in Class 14.1 of Schedule II to theIncome Tax Regulations, in respect of a business carried on by the taxpayer in Canada at the time of disposition, and(iv)an excluded right or interest of the taxpayer, other than an interest described in paragraph (k) of the definitionexcluded right or interestin subsection (10),(v)[Repealed, 2001, c. 17, s. 123]
(i)the paid-up capital in respect of the share immediately before the time of disposition, and(ii)if the share immediately before the time of disposition was taxable Canadian property that is not treaty-protected property, the amount by which, at the time of disposition, the fair market value of the share exceeds its cost amount;
(i)the corporation is deemed to have paid, immediately before the time of disposition, a dividend on the issued shares of the class equal to the amount of the paid-up capital adjustment in respect of the class, and(ii)a dividend is deemed to have been received, immediately before the time of disposition, by each person (other than a person in respect of whom the corporation is a foreign affiliate) who held any of the issued shares of the class equal to that proportion of the dividend so deemed to have been paid that the number of shares of the class held by the person immediately before the time of disposition is of the number of issued shares of the class outstanding immediately before the time of disposition;
(i)in computing the paid-up capital, at any time after the time that is immediately after the particular time, of any particular class of shares of the capital stock of the taxpayer there is to be deducted the amount determined by the formulaA × B/CwhereAis the lesser of(A)the paid-up capital in respect of all of the shares of the capital stock of the taxpayer at the time that is immediately after the particular time, and(B)the total of all amounts each of which is the fair market value at the particular time of(I)a share of the capital stock of a subject affiliate owned by the taxpayer at the particular time, or(II)an amount owing by the subject affiliate to the taxpayer at the particular time,Bis the paid-up capital in respect of the particular class of shares of the capital stock of the taxpayer at the time that is immediately after the particular time, andCis the paid-up capital in respect of all the shares of the capital stock of the taxpayer at the time that is immediately after the particular time, and(ii)for the purposes of Part XIII, the taxpayer is deemed, immediately after the particular time, to have paid to each parent, and each parent is deemed, immediately after the particular time, to have received from the taxpayer, a dividend in an amount determined by the formula(A – B) × C/DwhereAis the amount determined under clause (B) of the description of A in subparagraph (i),Bis the amount determined under clause (A) of the description of A in subparagraph (i),Cis the fair market value, immediately after the particular time, of the shares of the capital stock of the taxpayer that are held, directly or indirectly, by the parent, andDis the total of all amounts each of which is the fair market value, immediately after the particular time, of the shares of the capital stock of the taxpayer that are held, directly or indirectly, by a parent.
(A)the paid-up capital in respect of all of the shares of the capital stock of the taxpayer at the time that is immediately after the particular time, and(B)the total of all amounts each of which is the fair market value at the particular time of(I)a share of the capital stock of a subject affiliate owned by the taxpayer at the particular time, or(II)an amount owing by the subject affiliate to the taxpayer at the particular time,
(I)a share of the capital stock of a subject affiliate owned by the taxpayer at the particular time, or(II)an amount owing by the subject affiliate to the taxpayer at the particular time,
(i)the affiliate is deemed to have been a controlled foreign affiliate of the other taxpayer immediately before the particular time, and(ii)the prescribed amount is to be included in the foreign accrual property income of the affiliate for its taxation year that ends immediately before the particular time.
(a)for the purposes of subsection (1) and this subsection, thepaid-up capital adjustmentin respect of a particular class of shares of the corporation’s capital stock in respect of that acquisition of residence is the positive or negative amount determined by the formula(A × B/C) - DwhereAis the amount, if any, by which(i)the total of all amounts each of which is an amount deemed by paragraph (1)(c) to be the cost to the corporation of property deemed under that paragraph to have been acquired by the corporation at the particular timeexceeds(ii)the total of all amounts each of which is the amount of a debt owing by the corporation, or any other obligation of the corporation to pay an amount, that is outstanding at the particular time,Bis the fair market value at the particular time of all of the shares of the particular class,Cis the total of all amounts each of which is the fair market value at the particular time of all of the shares of a class of shares of the corporation’s capital stock, andDis the paid-up capital at the particular time, determined without reference to this subsection, in respect of the particular class; and(b)for the purposes of this Act, in computing the paid-up capital in respect of a class of shares of the corporation’s capital stock at any time after the particular time and before the time, if any, at which the corporation next becomes resident in Canada, there shall be(i)added the amount of the paid-up capital adjustment in respect of the particular class, if that amount is positive and the corporation so elects for all such classes in respect of that acquisition of residence by notifying the Minister in writing within 90 days after the particular time, and(ii)deducted, if the amount of the paid-up capital adjustment in respect of the particular class is negative, the absolute value of that amount.
(i)the total of all amounts each of which is an amount deemed by paragraph (1)(c) to be the cost to the corporation of property deemed under that paragraph to have been acquired by the corporation at the particular time
(ii)the total of all amounts each of which is the amount of a debt owing by the corporation, or any other obligation of the corporation to pay an amount, that is outstanding at the particular time,
(i)added the amount of the paid-up capital adjustment in respect of the particular class, if that amount is positive and the corporation so elects for all such classes in respect of that acquisition of residence by notifying the Minister in writing within 90 days after the particular time, and(ii)deducted, if the amount of the paid-up capital adjustment in respect of the particular class is negative, the absolute value of that amount.
(a)there is to be deducted an amount equal to the lesser of A and B, and added an amount equal to the lesser of A and C, whereAis the absolute value of the difference between(i)the total of all amounts deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of the class paid before that time by the corporation, and(ii)the total that would be determined under subparagraph (i) if this Act were read without reference to subsection (2),Bis the total of all amounts required by subsection (2) to be added in computing the paid-up capital in respect of the class before that time, andCis the total of all amounts required by subsection (2) to be deducted in computing the paid-up capital in respect of the class before that time; and(b)there is to be added an amount equal to the lesser of(i)the amount, if any, by which(A)the total of all amounts deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of the class paid after March 28, 2012 and before that time by the corporationexceeds(B)the total that would be determined under clause (A) if this Act were read without reference to subparagraph (c.3)(i), and(ii)the total of all amounts required by subparagraph (c.3)(i) to be deducted in computing the paid-up capital in respect of the class before that time.
(i)the total of all amounts deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of the class paid before that time by the corporation, and(ii)the total that would be determined under subparagraph (i) if this Act were read without reference to subsection (2),
(i)the amount, if any, by which(A)the total of all amounts deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of the class paid after March 28, 2012 and before that time by the corporationexceeds(B)the total that would be determined under clause (A) if this Act were read without reference to subparagraph (c.3)(i), and(ii)the total of all amounts required by subparagraph (c.3)(i) to be deducted in computing the paid-up capital in respect of the class before that time.
(A)the total of all amounts deemed by subsection 84(3), (4) or (4.1) to be a dividend on shares of the class paid after March 28, 2012 and before that time by the corporation
(B)the total that would be determined under clause (A) if this Act were read without reference to subparagraph (c.3)(i), and
Marginal note:Year-end, fiscal period(a)where the taxpayer is a corporation or a trust,(i)the taxpayer’s taxation year that would otherwise include the particular time shall be deemed to have ended immediately before the particular time and a new taxation year of the taxpayer shall be deemed to have begun at the particular time, and(ii)for the purpose of determining the taxpayer’s fiscal period after the particular time, the taxpayer shall be deemed not to have established a fiscal period before the particular time;Marginal note:Fiscal period(a.1)if the taxpayer is an individual (other than a trust) and carries on a business at the particular time, otherwise than through a permanent establishment (as defined by regulation) in Canada,(i)the fiscal period of the business is deemed to have ended immediately before the particular time and a new fiscal period of the business is deemed to have begun at the particular time, and(ii)for the purpose of determining the fiscal period of the business after the particular time, the taxpayer is deemed not to have established a fiscal period of the business before the particular time;Marginal note:Deemed disposition(b)the taxpayer is deemed to have disposed, at the time (in this paragraph and paragraph (d) referred to as the “time of disposition”) that is immediately before the time that is immediately before the particular time, of each property owned by the taxpayer other than, if the taxpayer is an individual,(i)real or immovable property situated in Canada, a Canadian resource property or a timber resource property,(ii)capital property used in, property included in Class 14.1 of Schedule II to theIncome Tax Regulationsin respect of or property described in the inventory of, a business carried on by the taxpayer through apermanent establishment(as defined by regulation) in Canada at the particular time,(iii)an excluded right or interest of the taxpayer,(iv)if the taxpayer is not a trust and was not, during the 120-month period that ends at the particular time, resident in Canada for more than 60 months, property that was owned by the taxpayer at the time the taxpayer last became resident in Canada or that was acquired by the taxpayer by inheritance or bequest after the taxpayer last became resident in Canada, and(v)any property in respect of which the taxpayer elects under paragraph (6)(a) for the taxation year that includes the first time, after the particular time, at which the taxpayer becomes resident in Canada,for proceeds equal to its fair market value at the time of disposition, which proceeds are deemed to have become receivable and to have been received by the taxpayer at the time of disposition;Marginal note:Employee life and health trust(b.1)notwithstanding paragraph (b), if the taxpayer is or was at any time an employee life and health trust,(i)the taxpayer is deemed(A)to have disposed, at the time (in this paragraph referred to as the “time of disposition”) that is immediately before the time that is immediately before the particular time, of each property owned by the taxpayer for proceeds equal to its fair market value at the time of disposition, which proceeds are deemed to have become receivable and to have been received by the taxpayer at the time of disposition, and(B)to have carried on a business at the time of disposition, and(ii)each property of the taxpayer is deemed(A)to have been described in the inventory of the business referred to in clause (i)(B), and(B)to have a cost of nil at the time of disposition;Marginal note:Reacquisition(c)the taxpayer is deemed to have reacquired, at the particular time, each property deemed by paragraph (b) or (b.1) to have been disposed of by the taxpayer, at a cost equal to the proceeds of disposition of the property;Marginal note:Individual — elective disposition(d)notwithstanding paragraphs (b) to (c), if the taxpayer is an individual (other than a trust) and so elects in prescribed form and manner in respect of a property described in subparagraph (b)(i) or (ii),(i)the taxpayer is deemed to have disposed of the property at the time of disposition for proceeds equal to its fair market value at that time and to have reacquired the property at the particular time at a cost equal to those proceeds,(ii)the taxpayer’s income for the taxation year that includes the particular time is deemed to be the greater of(A)that income determined without reference to this subparagraph, and(B)the lesser of(I)that income determined without reference to this subsection, and(II)that income determined without reference to subparagraph (i), and(iii)each of the taxpayer’s non-capital loss, net capital loss, restricted farm loss, farm loss and limited partnership loss for the taxation year that includes the particular time is deemed to be the lesser of(A)that amount determined without reference to this subparagraph, and(B)the greater of(I)that amount determined without reference to this subsection, and(II)that amount determined without reference to subparagraph (i); andMarginal note:Employee CCPC stock option shares(d.1)if the taxpayer is deemed by paragraph (b) to have disposed of a share that was acquired before February 28, 2000 under circumstances to which subsection 7(1.1) applied, there shall be deducted from the taxpayer’s proceeds of disposition the amount that would, if section 7 were read without reference to subsection 7(1.6), be added under paragraph 53(1)(j) in computing the adjusted cost base to the taxpayer of the share as a consequence of the deemed disposition.(e) and (f)[Repealed, 2001, c. 17, s. 123]
(i)the taxpayer’s taxation year that would otherwise include the particular time shall be deemed to have ended immediately before the particular time and a new taxation year of the taxpayer shall be deemed to have begun at the particular time, and(ii)for the purpose of determining the taxpayer’s fiscal period after the particular time, the taxpayer shall be deemed not to have established a fiscal period before the particular time;
(i)the fiscal period of the business is deemed to have ended immediately before the particular time and a new fiscal period of the business is deemed to have begun at the particular time, and(ii)for the purpose of determining the fiscal period of the business after the particular time, the taxpayer is deemed not to have established a fiscal period of the business before the particular time;
(i)real or immovable property situated in Canada, a Canadian resource property or a timber resource property,(ii)capital property used in, property included in Class 14.1 of Schedule II to theIncome Tax Regulationsin respect of or property described in the inventory of, a business carried on by the taxpayer through apermanent establishment(as defined by regulation) in Canada at the particular time,(iii)an excluded right or interest of the taxpayer,(iv)if the taxpayer is not a trust and was not, during the 120-month period that ends at the particular time, resident in Canada for more than 60 months, property that was owned by the taxpayer at the time the taxpayer last became resident in Canada or that was acquired by the taxpayer by inheritance or bequest after the taxpayer last became resident in Canada, and(v)any property in respect of which the taxpayer elects under paragraph (6)(a) for the taxation year that includes the first time, after the particular time, at which the taxpayer becomes resident in Canada,
(i)the taxpayer is deemed(A)to have disposed, at the time (in this paragraph referred to as the “time of disposition”) that is immediately before the time that is immediately before the particular time, of each property owned by the taxpayer for proceeds equal to its fair market value at the time of disposition, which proceeds are deemed to have become receivable and to have been received by the taxpayer at the time of disposition, and(B)to have carried on a business at the time of disposition, and(ii)each property of the taxpayer is deemed(A)to have been described in the inventory of the business referred to in clause (i)(B), and(B)to have a cost of nil at the time of disposition;
(A)to have disposed, at the time (in this paragraph referred to as the “time of disposition”) that is immediately before the time that is immediately before the particular time, of each property owned by the taxpayer for proceeds equal to its fair market value at the time of disposition, which proceeds are deemed to have become receivable and to have been received by the taxpayer at the time of disposition, and(B)to have carried on a business at the time of disposition, and
(A)to have been described in the inventory of the business referred to in clause (i)(B), and(B)to have a cost of nil at the time of disposition;
(i)the taxpayer is deemed to have disposed of the property at the time of disposition for proceeds equal to its fair market value at that time and to have reacquired the property at the particular time at a cost equal to those proceeds,(ii)the taxpayer’s income for the taxation year that includes the particular time is deemed to be the greater of(A)that income determined without reference to this subparagraph, and(B)the lesser of(I)that income determined without reference to this subsection, and(II)that income determined without reference to subparagraph (i), and(iii)each of the taxpayer’s non-capital loss, net capital loss, restricted farm loss, farm loss and limited partnership loss for the taxation year that includes the particular time is deemed to be the lesser of(A)that amount determined without reference to this subparagraph, and(B)the greater of(I)that amount determined without reference to this subsection, and(II)that amount determined without reference to subparagraph (i); and
(A)that income determined without reference to this subparagraph, and(B)the lesser of(I)that income determined without reference to this subsection, and(II)that income determined without reference to subparagraph (i), and
(I)that income determined without reference to this subsection, and(II)that income determined without reference to subparagraph (i), and
(A)that amount determined without reference to this subparagraph, and(B)the greater of(I)that amount determined without reference to this subsection, and(II)that amount determined without reference to subparagraph (i); and
(I)that amount determined without reference to this subsection, and(II)that amount determined without reference to subparagraph (i); and
(a)the individual’s total tax payable under this Part for the year, determined before taking into consideration the specified future tax consequences for the year, and(b)the amount that would be determined under paragraph (a) if subsection (4) did not apply to the individual for the year.
(a)subject to paragraph (b), if the individual so elects in writing and files the election with the Minister on or before the individual’s filing-due date for the year, paragraphs (4)(b) and (c) do not apply to the individual’s cessation of residence at the emigration time in respect of all properties that were taxable Canadian properties of the individual throughout the period that began at the emigration time and that ends at the particular time;(b)where, if a property in respect of which an election under paragraph (a) is made had been acquired by the individual at the emigration time at a cost equal to its fair market value at the emigration time and had been disposed of by the individual immediately before the particular time for proceeds of disposition equal to its fair market value immediately before the particular time, the application of subsection 40(3.7) would reduce the amount that would, but for that subsection and this subsection, be the individual’s loss from the disposition,(i)the individual is deemed to have disposed of the property at the time of disposition (within the meaning assigned by paragraph (4)(b)) in respect of the emigration time for proceeds of disposition equal to the total of(A)the adjusted cost base to the individual of the property immediately before the time of disposition, and(B)the amount, if any, by which that reduction exceeds the lesser of(I)the adjusted cost base to the individual of the property immediately before the time of disposition, and(II)the amount, if any, that the individual specifies for the purposes of this paragraph in the election under paragraph (a) in respect of the property,(ii)the individual is deemed to have reacquired the property at the emigration time at a cost equal to the amount, if any, by which the amount determined under clause (i)(A) exceeds the lesser of that reduction and the amount specified by the individual under subclause (i)(B)(II), and(iii)for the purpose of section 119, the individual is deemed to have disposed of the property immediately before the particular time;(c)if the individual so elects in writing and files the election with the Minister on or before the individual’s filing-due date for the year, in respect of each property that the individual owned throughout the period that began at the emigration time and that ends at the particular time and that is deemed by paragraph (1)(b) to have been disposed of because the individual became resident in Canada, notwithstanding paragraphs (1)(c) and (4)(b) the individual’s proceeds of disposition at the time of disposition (within the meaning assigned by paragraph (4)(b)), and the individual’s cost of acquiring the property at the particular time, are deemed to be those proceeds and that cost, determined without reference to this paragraph, minus the least of(i)the amount that would, but for this paragraph, have been the individual’s gain from the disposition of the property deemed by paragraph (4)(b) to have occurred,(ii)the fair market value of the property at the particular time, and(iii)the amount that the individual specifies for the purposes of this paragraph in the election; and(d)notwithstanding subsections 152(4) to (5), any assessment of tax that is payable under this Act by the individual for any taxation year that is before the year that includes the particular time and that is not before the year that includes the emigration time shall be made that is necessary to take an election under this subsection into account, except that no such assessment shall affect the computation of(i)interest payable under this Act to or by a taxpayer in respect of any period that is before the day on which the taxpayer’s return of income for the taxation year that includes the particular time is filed, or(ii)any penalty payable under this Act.
(i)the individual is deemed to have disposed of the property at the time of disposition (within the meaning assigned by paragraph (4)(b)) in respect of the emigration time for proceeds of disposition equal to the total of(A)the adjusted cost base to the individual of the property immediately before the time of disposition, and(B)the amount, if any, by which that reduction exceeds the lesser of(I)the adjusted cost base to the individual of the property immediately before the time of disposition, and(II)the amount, if any, that the individual specifies for the purposes of this paragraph in the election under paragraph (a) in respect of the property,(ii)the individual is deemed to have reacquired the property at the emigration time at a cost equal to the amount, if any, by which the amount determined under clause (i)(A) exceeds the lesser of that reduction and the amount specified by the individual under subclause (i)(B)(II), and(iii)for the purpose of section 119, the individual is deemed to have disposed of the property immediately before the particular time;
(A)the adjusted cost base to the individual of the property immediately before the time of disposition, and(B)the amount, if any, by which that reduction exceeds the lesser of(I)the adjusted cost base to the individual of the property immediately before the time of disposition, and(II)the amount, if any, that the individual specifies for the purposes of this paragraph in the election under paragraph (a) in respect of the property,
(I)the adjusted cost base to the individual of the property immediately before the time of disposition, and(II)the amount, if any, that the individual specifies for the purposes of this paragraph in the election under paragraph (a) in respect of the property,
(i)the amount that would, but for this paragraph, have been the individual’s gain from the disposition of the property deemed by paragraph (4)(b) to have occurred,(ii)the fair market value of the property at the particular time, and(iii)the amount that the individual specifies for the purposes of this paragraph in the election; and
(i)interest payable under this Act to or by a taxpayer in respect of any period that is before the day on which the taxpayer’s return of income for the taxation year that includes the particular time is filed, or(ii)any penalty payable under this Act.
(a)the emigration time is before March 5, 2010; and(b)the property was taxable Canadian property of the individual on March 4, 2010.
(a)becomes resident in Canada at a particular time in a taxation year,(b)owns at the particular time a property that the individual last acquired on a trust distribution to which subsection 107(2) would, but for subsection 107(5), have applied and at a time (in this subsection referred to as the “distribution time”) that was after October 1, 1996 and before the particular time, and(c)was a beneficiary of the trust at the last time, before the particular time, at which the individual ceased to be resident in Canada,
(d)subject to paragraphs (e) and (f), if the individual and the trust jointly so elect in writing and file the election with the Minister on or before the earlier of their filing-due dates for their taxation years that include the particular time, subsection 107(2.1) does not apply to the distribution in respect of all properties acquired by the individual on the distribution that were taxable Canadian properties of the individual throughout the period that began at the distribution time and that ends at the particular time,(e)paragraph (f) applies in respect of the individual, the trust and a property in respect of which an election under paragraph (d) is made where, if the individual(i)had been resident in Canada at the distribution time,(ii)had acquired the property at the distribution time at a cost equal to its fair market value at that time,(iii)had ceased to be resident in Canada immediately after the distribution time, and(iv)had, immediately before the particular time, disposed of the property for proceeds of disposition equal to its fair market value immediately before the particular time,
(i)had been resident in Canada at the distribution time,(ii)had acquired the property at the distribution time at a cost equal to its fair market value at that time,(iii)had ceased to be resident in Canada immediately after the distribution time, and(iv)had, immediately before the particular time, disposed of the property for proceeds of disposition equal to its fair market value immediately before the particular time,
(f)where this paragraph applies in respect of an individual, a trust and a property,(i)notwithstanding paragraph 107(2.1)(a), the trust is deemed to have disposed of the property at the distribution time for proceeds of disposition equal to the total of(A)the cost amount to the trust of the property immediately before the distribution time, and(B)the amount, if any, by which the reduction under subsection 40(3.7) described in paragraph (e) exceeds the lesser of(I)the cost amount to the trust of the property immediately before the distribution time, and(II)the amount, if any, which the individual and the trust jointly specify for the purposes of this paragraph in the election under paragraph (d) in respect of the property, and(ii)notwithstanding paragraph 107(2.1)(b), the individual is deemed to have acquired the property at the distribution time at a cost equal to the amount, if any, by which the amount otherwise determined under paragraph 107(2)(b) exceeds the lesser of the reduction under subsection 40(3.7) described in paragraph (e) and the amount specified under subclause (i)(B)(II),(g)if the individual and the trust jointly so elect in writing and file the election with the Minister on or before the later of their filing-due dates for their taxation years that include the particular time, in respect of each property that the individual owned throughout the period that began at the distribution time and that ends at the particular time and that is deemed by paragraph (1)(b) to have been disposed of because the individual became resident in Canada, notwithstanding paragraphs 107(2.1)(a) and (b), the trust’s proceeds of disposition under paragraph 107(2.1)(a) at the distribution time, and the individual’s cost of acquiring the property at the particular time, are deemed to be those proceeds and that cost determined without reference to this paragraph, minus the least of(i)the amount that would, but for this paragraph, have been the trust’s gain from the disposition of the property deemed by paragraph 107(2.1)(a) to have occurred,(ii)the fair market value of the property at the particular time, and(iii)the amount that the individual and the trust jointly specify for the purposes of this paragraph in the election,(h)if the trust ceases to exist before the individual’s filing-due date for the individual’s taxation year that includes the particular time,(i)an election or specification described in this subsection may be made by the individual alone in writing if the election is filed with the Minister on or before that filing-due date, and(ii)if the individual alone makes such an election or specification, the individual and the trust are jointly and severally, or solidarily, liable for any amount payable under this Act by the trust as a result of the election or specification, and(i)notwithstanding subsections 152(4) to (5), such assessment of tax payable under the Act by the trust or the individual for any year that is before the year that includes the particular time and that is not before the year that includes the distribution time shall be made as is necessary to take an election under this subsection into account, except that no such assessment shall affect the computation of(i)interest payable under this Act to or by the trust or the individual in respect of any period that is before the individual’s filing-due date for the taxation year that includes the particular time, or(ii)any penalty payable under this Act.
(i)notwithstanding paragraph 107(2.1)(a), the trust is deemed to have disposed of the property at the distribution time for proceeds of disposition equal to the total of(A)the cost amount to the trust of the property immediately before the distribution time, and(B)the amount, if any, by which the reduction under subsection 40(3.7) described in paragraph (e) exceeds the lesser of(I)the cost amount to the trust of the property immediately before the distribution time, and(II)the amount, if any, which the individual and the trust jointly specify for the purposes of this paragraph in the election under paragraph (d) in respect of the property, and(ii)notwithstanding paragraph 107(2.1)(b), the individual is deemed to have acquired the property at the distribution time at a cost equal to the amount, if any, by which the amount otherwise determined under paragraph 107(2)(b) exceeds the lesser of the reduction under subsection 40(3.7) described in paragraph (e) and the amount specified under subclause (i)(B)(II),
(A)the cost amount to the trust of the property immediately before the distribution time, and(B)the amount, if any, by which the reduction under subsection 40(3.7) described in paragraph (e) exceeds the lesser of(I)the cost amount to the trust of the property immediately before the distribution time, and(II)the amount, if any, which the individual and the trust jointly specify for the purposes of this paragraph in the election under paragraph (d) in respect of the property, and
(I)the cost amount to the trust of the property immediately before the distribution time, and(II)the amount, if any, which the individual and the trust jointly specify for the purposes of this paragraph in the election under paragraph (d) in respect of the property, and
(i)the amount that would, but for this paragraph, have been the trust’s gain from the disposition of the property deemed by paragraph 107(2.1)(a) to have occurred,(ii)the fair market value of the property at the particular time, and(iii)the amount that the individual and the trust jointly specify for the purposes of this paragraph in the election,
(i)an election or specification described in this subsection may be made by the individual alone in writing if the election is filed with the Minister on or before that filing-due date, and(ii)if the individual alone makes such an election or specification, the individual and the trust are jointly and severally, or solidarily, liable for any amount payable under this Act by the trust as a result of the election or specification, and
(i)interest payable under this Act to or by the trust or the individual in respect of any period that is before the individual’s filing-due date for the taxation year that includes the particular time, or(ii)any penalty payable under this Act.
(a)was deemed by paragraph (4)(b) to have disposed of a capital property at any particular time after October 1, 1996,(b)has disposed of the property at a later time at which the property was a taxable Canadian property of the individual, and(c)so elects in writing in the individual’s return of income for the taxation year that includes the later time,
(d)the amount specified in respect of the property in the election,(e)the amount that would, but for the election, be the individual’s gain from the disposition of the property at the particular time, and(f)the amount that would be the individual’s loss from the disposition of the property at the later time, if the loss were determined having reference to every other provision of this Act including, for greater certainty, subsection 40(3.7) and section 112, but without reference to the election.
(a)a right of the individual under, or an interest of the individual in a trust governed by,(i)a registered retirement savings plan or a plan referred to in subsection 146(12) as an “amended plan”,(ii)a registered retirement income fund,(iii)a registered education savings plan,(iii.1)a registered disability savings plan,(iii.2)a TFSA,(iii.3)a FHSA,(iv)a deferred profit sharing plan or a plan referred to in subsection 147(15) as a “revoked plan”,(v)an employees profit sharing plan,(vi)an employee benefit plan (other than a plan described in subparagraph (b)(i) or (ii)),(vi.1)an employee life and health trust,(vii)a plan or arrangement (other than an employee benefit plan) under which the individual has a right to receive in a year remuneration in respect of services rendered by the individual in the year or a prior year,(viii)a superannuation or pension fund or plan (other than an employee benefit plan),(ix)a retirement compensation arrangement,(x)a foreign retirement arrangement, or(xi)a registered supplementary unemployment benefit plan;(b)a right of the individual to a benefit under an employee benefit plan that is(i)a plan or arrangement described in paragraph (j) of the definitionsalary deferral arrangementin subsection 248(1) that would, but for paragraphs (j) and (k) of that definition, be a salary deferral arrangement, or(ii)a plan or arrangement that would, but for paragraph 6801(c) of theIncome Tax Regulations, be a salary deferral arrangement,to the extent that the benefit can reasonably be considered to be attributable to services rendered by the individual in Canada;(c)a right of the individual under an agreement referred to in subsection 7(1);(d)a right of the individual to a retiring allowance;(e)a right of the individual under, or an interest of the individual in, a trust that is(i)an employee trust,(ii)an amateur athlete trust,(iii)a cemetery care trust, or(iv)a trust governed by an eligible funeral arrangement;(f)a right of the individual to receive a payment under(i)an annuity contract, or(ii)an income-averaging annuity contract;(g)a right of the individual to a benefit under(i)theCanada Pension Planor a provincial plan described in section 3 of that Act,(ii)theOld Age Security Act, or(iii)[Repealed, 2011, c. 24, s. 43](iv)a plan or arrangement instituted by the social security legislation of a country other than Canada or of a state, province or other political subdivision of such a country;(h)a right of the individual to a benefit described in any of subparagraphs 56(1)(a)(iii) to (vi);(i)a right of the individual to a payment out of a NISA Fund No. 2;(j)an interest of the individual in a personal trust resident in Canada if the interest was never acquired for consideration and did not arise as a consequence of a qualifying disposition by the individual (within the meaning that would be assigned by subsection 107.4(1) if that subsection were read without reference to paragraphs 107.4(1)(h) and (i));(k)an interest of the individual in a non-resident testamentary trust that is an estate that arose on and as a consequence of a death if(i)the interest was never acquired for consideration, and(ii)the estate has been in existence for no more than 36 months; or(l)an interest of the individual in a life insurance policy in Canada, except for that part of the policy in respect of which the individual is deemed by paragraph 138.1(1)(e) to have an interest in a related segregated fund trust. (droit, participation ou intérêt exclu)
(i)a registered retirement savings plan or a plan referred to in subsection 146(12) as an “amended plan”,(ii)a registered retirement income fund,(iii)a registered education savings plan,(iii.1)a registered disability savings plan,(iii.2)a TFSA,(iii.3)a FHSA,(iv)a deferred profit sharing plan or a plan referred to in subsection 147(15) as a “revoked plan”,(v)an employees profit sharing plan,(vi)an employee benefit plan (other than a plan described in subparagraph (b)(i) or (ii)),(vi.1)an employee life and health trust,(vii)a plan or arrangement (other than an employee benefit plan) under which the individual has a right to receive in a year remuneration in respect of services rendered by the individual in the year or a prior year,(viii)a superannuation or pension fund or plan (other than an employee benefit plan),(ix)a retirement compensation arrangement,(x)a foreign retirement arrangement, or(xi)a registered supplementary unemployment benefit plan;
(i)a plan or arrangement described in paragraph (j) of the definitionsalary deferral arrangementin subsection 248(1) that would, but for paragraphs (j) and (k) of that definition, be a salary deferral arrangement, or(ii)a plan or arrangement that would, but for paragraph 6801(c) of theIncome Tax Regulations, be a salary deferral arrangement,
(i)an employee trust,(ii)an amateur athlete trust,(iii)a cemetery care trust, or(iv)a trust governed by an eligible funeral arrangement;
(i)an annuity contract, or(ii)an income-averaging annuity contract;
(i)theCanada Pension Planor a provincial plan described in section 3 of that Act,(ii)theOld Age Security Act, or(iii)[Repealed, 2011, c. 24, s. 43](iv)a plan or arrangement instituted by the social security legislation of a country other than Canada or of a state, province or other political subdivision of such a country;
(i)the interest was never acquired for consideration, and(ii)the estate has been in existence for no more than 36 months; or
(a)money that is legal tender in Canada and deposits of such money;(b)property that would be an excluded right or interest of the individual if the definitionexcluded right or interestin this subsection were read without reference to paragraphs (c), (j) and (l) of that definition;(c)if the individual is not a trust and was not, during the 120-month period that ends at the particular time, resident in Canada for more than 60 months, property described in subparagraph (4)(b)(iv) that is not taxable Canadian property; and(d)any item of personal-use property the fair market value of which, at the particular time, is less than $10,000. (bien à déclarer)
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]1994, c. 21, s. 621998, c. 19, ss. 36, 1531999, c. 22, s. 522001, c. 17, s. 1232007, c. 35, s. 1132008, c. 28, s. 202010, c. 12, s. 15, c. 25, s. 282011, c. 24, s. 432012, c. 31, s. 302013, c. 34, ss. 14, 73, 130, 2732014, c. 39, s. 462016, c. 12, s. 462018, c. 27, s. 142021, c. 23, s. 262022, c. 19, s. 23
128.2(1)Where a corporation formed at a particular time by the amalgamation or merger of, or by a plan of arrangement or other corporate reorganization in respect of, 2 or more corporations (each of which is referred to in this section as a “predecessor”) is at the particular time resident in Canada, a predecessor that was not immediately before the particular time resident in Canada shall be deemed to have become resident in Canada immediately before the particular time.Marginal note:Idem(2)Where a corporation formed at a particular time by the amalgamation or merger of, or by a plan of arrangement or other corporate reorganization in respect of, 2 or more corporations is at the particular time not resident in Canada, a predecessor that was immediately before the particular timeresident in Canada shall be deemed to have ceased to be resident in Canada immediately before the particular time.Marginal note:Windings-up excluded(3)For greater certainty, subsections 128.2(1) and (2) do not apply to reorganizations occurring solely because of the acquisition of property of one corporation by another corporation, pursuant to the purchase of the property by the other corporation or because of the distribution of the property to the other corporation on the winding-up of the corporation.
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]1994, c. 21, s. 62
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]2001, c. 17, s. 1252009, c. 2, s. 432013, c. 34, s. 274
129(1)Where a return of a corporation’s income under this Part for a taxation year is made within 3 years after the end of the year, the Minister(a)may, on sending the notice of assessment for the year, refund without application an amount (in this Act referred to as its “dividend refund” for the year) in respect of taxable dividends paid by the corporation on shares of its capital stock in the year, and at a time when it was a private corporation, equal to the total of(i)in respect of eligible dividends, an amount equal to the lesser of(A)38 1/3% of the total of all eligible dividends paid by it in the year, and(B)its eligible refundable dividend tax on hand at the end of the year, and(ii)in respect of taxable dividends (other than eligible dividends), an amount equal to the total of(A)the lesser of(I)38 1/3% of the total of all taxable dividends (other than eligible dividends) paid by it in the year, and(II)its non-eligible refundable dividend tax on hand at the end of the year, and(B)either(I)if the amount determined under subclause (A)(I) exceeds the amount determined under subclause (A)(II), the lesser of1the amount of the excess, and2the amount by which the corporation’s eligible refundable dividend tax on hand at the end of the year exceeds the amount, if any, determined under subparagraph (i) for the year, and(II)in any other case, nil; and(b)shall, with all due dispatch, make the dividend refund after sending the notice of assessment if an application for it has been made in writing by the corporation within the period within which the Minister would be allowed under subsection 152(4) to assess tax payable under this Part by the corporation for the year if that subsection were read without reference to paragraph 152(4)(a).Marginal note:Dividends paid to bankrupt controlling corporation(1.1)In determining the dividend refund for a taxation year ending after 1977 of a particular corporation, no amount may be included under clause (1)(a)(i)(A), subclause (1)(a)(ii)(A)(I) or sub-subclause (1)(a)(ii)(B)(I)1 in respect of a taxable dividend paid to a shareholder that(a)was a corporation that controlled (within the meaning assigned by subsection 186(2)) the particular corporation at the time the dividend was paid; and(b)was a bankrupt at any time during that taxation year of the particular corporation.Marginal note:Dividends deemed not to be taxable dividends(1.2)Where a dividend is paid on a share of the capital stock of a corporation and the share (or another share for which the share was substituted) was acquired by its holder in a transaction or as part of a series of transactions one of the main purposes of which was to enable the corporation to obtain a dividend refund, the dividend shall, for the purpose of subsection 129(1), be deemed not to be a taxable dividend.Marginal note:Application to other liability(2)Instead of making a refund that might otherwise be made under subsection 129(1), the Minister may, where the corporation is liable or about to become liable to make any payment under this Act, apply the amount that would otherwise be refundable to that other liability and notify the corporation of that action.Marginal note:Interest on dividend refund(2.1)Where a dividend refund for a taxation year is paid to, or applied to a liability of, a corporation, the Minister shall pay or apply interest on the refund at the prescribed rate for the period beginning on the day that is the later of(a)the day that is 120 days after the end of the year, and(b)the day that is 30 days after the day on which the corporation’s return of income under this Part for the year was filed under section 150, unless the return was filed on or before the day on or before which it was required to be filed,and ending on the day on which the refund is paid or applied.Marginal note:Excess interest on dividend refund(2.2)Where, at any particular time, interest has been paid to, or applied to a liability of, a corporation under subsection 129(2.1) in respect of a dividend refund and it is determined at a subsequent time that the dividend refund was less than that in respect of which interest was so paid or applied,(a)the amount by which the interest that was so paid or applied exceeds the interest, if any, computed in respect of the amount that is determined at the subsequent time to be the dividend refund shall be deemed to be an amount (in this subsection referred to as the “amount payable”) that became payable under this Part by the corporation at the particular time;(b)the corporation shall pay to the Receiver General interest at the prescribed rate on the amount payable, computed from the particular time to the day of payment; and(c)the Minister may at any time assess the corporation in respect of the amount payable and, where the Minister makes such an assessment, the provisions of Divisions I and J apply, with such modifications as the circumstances require, in respect of the assessment as though it had been made under section 152.(3)[Repealed, 2018, c. 12, s. 22]Marginal note:Application(3.1)Where, in a taxation year that begins after November 12, 1981, a corporation that last became a private corporation on or before that date and that was throughout the year a private corporation, other than a Canadian-controlled private corporation, has included in its income for the year an amount in respect of property that the corporation(a)disposed of before November 13, 1981,(b)was obligated to dispose of under the terms of an agreement in writing entered into before November 13, 1981, or(c)is deemed by subsection 44(2) to have disposed of at any time after November 12, 1981 because of an event referred to in paragraph (b), (c) or (d) of the definitionproceeds of dispositionin section 54 in respect of the disposition that occurred before November 13, 1981,paragraph 3(a) shall apply as if the corporation were a Canadian-controlled private corporation throughout the year, except that the total of the amounts determined under that paragraph in respect of the corporation for the year shall not exceed the amount that would be so determined if the only income of the corporation for the year were the amount included in respect of the disposition of such property.(3.2) to (3.5)[Repealed, 1996, c. 21, s. 32]Marginal note:Definitions(4)The definitions in this subsection apply in this section.aggregate investment incomeaggregate investment incomeof a corporation for a taxation year means the amount, if any, by which the total of all amounts, each of which is(a)the amount, if any, by which(i)the eligible portion of the corporation’s taxable capital gains for the yearexceeds the total of(ii)the eligible portion of its allowable capital losses for the year, and(iii)the amount, if any, deducted under paragraph 111(1)(b) in computing its taxable income for the year, or(b)the corporation’s income for the year from a source that is a property, other than(i)exempt income,(ii)an amount included under subsection 12(10.2) in computing the corporation’s income for the year,(iii)the portion of any dividend that was deductible in computing the corporation’s taxable income for the year, and(iv)income that, but for paragraph 108(5)(a), would not be income from a property,exceeds the total of all amounts, each of which is the corporation’s loss for the year from a source that is a property. (revenu de placement total)Canadian investment incomeCanadian investment income[Repealed, 1996, c. 21, s. 32]eligible portioneligible portionof a corporation’s taxable capital gains or allowable capital losses for a taxation year is the total of all amounts each of which is the portion of a taxable capital gain or an allowable capital loss, as the case may be, of the corporation for the year from a disposition of a property that, except where the property was a designated property (within the meaning assigned by subsection 89(1)), cannot reasonably be regarded as having accrued while the property, or a property for which it was substituted, was property of a corporation other than a Canadian-controlled private corporation, an investment corporation, a mortgage investment corporation or a mutual fund corporation. (fraction admissible)eligible refundable dividend tax on handeligible refundable dividend tax on hand, of a particular corporation at the end of a taxation year, means the amount, if any, by which the total of(a)the total of the taxes payable under Part IV by the particular corporation for the year in respect of(i)eligible dividends received by the particular corporation in the year from corporations other than corporations with which the particular corporation is connected (in this paragraph, within the meaning assigned by subsection 186(4) on the assumption that the other corporation is at that time a payer corporation within the meaning of that subsection), and(ii)taxable dividends received by the particular corporation in the year from corporations that are connected with the particular corporation to the extent that such dividends caused a dividend refund to those corporations from their eligible refundable dividend tax on hand, and(b)where the particular corporation was a private corporation at the end of its preceding taxation year, the particular corporation’s eligible refundable dividend tax on hand at the end of that preceding yearexceeds(c)the total of all amounts each of which is the portion, if any, of the particular corporation’s dividend refund from its eligible refundable dividend tax on hand determined, for its preceding taxation year, under(i)subparagraph (1)(a)(i), and(ii)clause (1)(a)(ii)(B). (impôt en main remboursable au titre de dividendes déterminés)foreign investment incomeforeign investment incomeof a corporation for a taxation year is the amount that would be its aggregate investment income for the year if(a)every amount of its income, loss, capital gain or capital loss for the year that can reasonably be regarded as being from a source in Canada were nil,(b)no amount were deducted under paragraph 111(1)(b) in computing its taxable income for the year, and(c)this Act were read without reference to paragraph (a) of the definitionincomeorlossin this subsection. (revenu de placement étranger)incomeincomeorlossof a corporation for a taxation year from a source that is a property(a)includes the income or loss from a specified investment business carried on by it in Canada other than income or loss from a source outside Canada, but(b)does not include the income or loss from any property(i)that is incident to or pertains to an active business carried on by it, or(ii)that is used or held principally for the purpose of gaining or producing income from an active business carried on by it. (perteourevenu)non-eligible refundable dividend tax on handnon-eligible refundable dividend tax on hand, of a corporation at the end of a taxation year, means the amount, if any, by which the total of(a)if the corporation was a Canadian-controlled private corporation throughout the year, the least of(i)the amount determined by the formulaA − BwhereAis 30 2/3% of the corporation’s aggregate investment income for the year, andBis the amount, if any, by which(A)the amount deducted under subsection 126(1) from the tax for the year otherwise payable by it under this Partexceeds(B)8% of its foreign investment income for the year,(ii)30 2/3% of the amount, if any, by which the corporation’s taxable income for the year exceeds the total of(A)the least of the amounts determined under paragraphs 125(1)(a) to (c) in respect of the corporation for the year,(B)100/(38 2/3) of the total of amounts deducted under subsection 126(1) from its tax for the year otherwise payable under this Part, and(C)the amount determined by multiplying the total of amounts deducted under subsection 126(2) from its tax for the year otherwise payable under this Part, by the relevant factor for the year, and(iii)the corporation’s tax for the year payable under this Part,(b)the total of the taxes payable under Part IV by the corporation for the year less the amount determined under paragraph (a) of the definitioneligible refundable dividend tax on handin respect of the corporation for the year, and(c)if the corporation was a private corporation at the end of its preceding taxation year, the corporation’s non-eligible refundable dividend tax on hand at the end of that preceding yearexceeds(d)the portion, if any, of the corporation’s dividend refund from its non-eligible refundable dividend tax on hand determined, for its preceding taxation year, under clause (1)(a)(ii)(A). (impôt en main remboursable au titre de dividendes non déterminés)Marginal note:Conditions for subsection (4.2)(4.1)Subsection (4.2) applies in respect of a particular taxation year of a particular corporation if the following conditions are met:(a)the particular corporation has an amount of tax payable for the year under Part IV;(b)the particular corporation has claimed amounts under paragraph 186(1)(c) or (d) in respect of the year; and(c)the particular corporation would, in the absence of paragraphs 186(1)(c) and (d), have an amount determined, at the end of the year, under both paragraph (a) of the definitioneligible refundable dividend tax on handand paragraph (b) of the definitionnon-eligible refundable dividend tax on handin subsection (4).Marginal note:Part IV tax — allocation of losses(4.2)If this subsection applies in respect of a particular taxation year of a corporation, for the purpose of determining the amount under paragraph (a) of the definitioneligible refundable dividend tax on handin subsection (4), in respect of the corporation at the end of the year, the amount determined under subsection 186(1) in respect of the corporation for the year is deemed to be the amount determined by the formulaA + B − CwhereAis the amount determined under paragraph 186(1)(a) in respect of the corporation for the year in respect of eligible dividends;Bis the amount determined under paragraph 186(1)(b) in respect of the corporation for the year in respect of dividends that resulted in dividend refunds from the eligible refundable dividend tax on hand of other corporations; andCis the amount determined by the formula38 1/3% (D + E) − (F + G)whereDis the amount claimed by the corporation under paragraph 186(1)(c) for the year,Eis the amount claimed by the corporation under paragraph 186(1)(d) for the year,Fis the amount determined under paragraph 186(1)(a) in respect of the corporation for the year in respect of taxable dividends (other than eligible dividends), andGis the amount determined under paragraph 186(1)(b) in respect of the corporation for the year in respect of dividends that resulted in dividend refunds from the non-eligible refundable dividend tax on hand of other corporations.(4.3)[Repealed, 1996, c. 21, s. 32]Marginal note:2019 transitional RDTOH(5)The following rules apply to a corporation’s first taxation year in respect of which the definitioneligible refundable dividend tax on handin subsection (4) applies:(a)if the corporation is a Canadian-controlled private corporation throughout the taxation year and its preceding taxation year and is not a corporation in respect of which an election under subsection 89(11) applies to the taxation year or the preceding taxation year,(i)for the purpose of applying paragraph (b) of the definitioneligible refundable dividend tax on handin respect of the corporation at the end of the taxation year, the corporation’s eligible refundable dividend tax on hand at the end of its preceding taxation year is deemed to be the amount, if any, that is the lesser of(A)the amount determined by the formulaA − BwhereAis the corporation’s refundable dividend tax on hand at the end of its preceding taxation year, andBis the corporation’s dividend refund for its preceding taxation year, and(B)the amount determined by the formula(C − D) × EwhereCis the corporation’s general rate income pool at the end of its preceding taxation year,Dis the amount, if any, by which(I)the total of all amounts each of which is an eligible dividend paid by the corporation in its preceding taxation yearexceeds(II)the total of all amounts each of which is an excessive eligible dividend designation made by the corporation in its preceding taxation year, andEis 38 1/3%, and(ii)for the purpose of applying paragraph (c) of the definitionnon-eligible refundable dividend tax on handin respect of the corporation at the end of the taxation year, the corporation’s non-eligible refundable dividend tax on hand at the end of its preceding taxation year is deemed to be the amount determined by the formulaA − BwhereAis the amount determined under clause (a)(i)(A) in respect of the corporation at the end of the preceding taxation year, andBis the amount determined under clause (a)(i)(B) in respect of the corporation at the end of the preceding taxation year; and(b)in any other case, for the purpose of applying paragraph (b) of the definitioneligible refundable dividend tax on handin respect of the corporation at the end of the taxation year, the corporation’s eligible refundable dividend tax on hand at the end of its preceding taxation year is deemed to be the amount that would be determined for clause (a)(i)(A) if paragraph (a) applied to the corporation in respect of the taxation year.Marginal note:2019 transitional RDTOH — amalgamations(5.1)Subsection (5) applies with such modifications as are necessary for the purpose of applying paragraph 87(2)(aa) in respect of a corporation if(a)the corporation is a predecessor corporation (within the meaning assigned by subsection 87(1)) in respect of an amalgamation (within the meaning assigned by subsection 87(1));(b)the corporation has an amount of refundable dividend tax on hand at the end of its taxation year that ends because of paragraph 87(2)(a); and(c)the first taxation year of the new corporation (within the meaning assigned by subsection 87(1)) in respect of the amalgamation is one to which the definitioneligible refundable dividend tax on handin subsection (4) applies.Marginal note:Investment income from associated corporation deemed to be active business income(6)Where any particular amount paid or payable to a corporation (in this subsection referred to as the “recipient corporation”) by another corporation (in this subsection referred to as the “associated corporation”) with which the recipient corporation was associated in any particular taxation year commencing after 1972, would otherwise be included in computing the income of the recipient corporation for the particular year from a source in Canada that is a property, the following rules apply:(a)for the purposes of subsection 129(4), in computing the recipient corporation’s income for the year from a source in Canada that is a property,(i)there shall not be included any portion (in this subsection referred to as the “deductible portion”) of the particular amount that was or may be deductible in computing the income of the associated corporation for any taxation year from an active business carried on by it in Canada, and(ii)no deduction shall be made in respect of any outlay or expense, to the extent that that outlay or expense may reasonably be regarded as having been made or incurred by the recipient corporation for the purpose of gaining or producing the deductible portion; and(b)for the purposes of this subsection and section 125,(i)the deductible portion shall be deemed to be income of the recipient corporation for the particular year from an active business carried on by it in Canada, and(ii)any outlay or expense, to the extent described in subparagraph 129(6)(a)(ii), shall be deemed to have been made or incurred by the recipient corporation for the purpose of gaining or producing that income.Marginal note:Meaning oftaxable dividend(7)For the purposes of this section,taxable dividenddoes not include a capital gains dividend within the meaning assigned by subsection 131(1).Marginal note:Application of s. 125(8)Expressions used in this section and not otherwise defined for the purposes of this section have the same meanings as in section 125.
(a)may, on sending the notice of assessment for the year, refund without application an amount (in this Act referred to as its “dividend refund” for the year) in respect of taxable dividends paid by the corporation on shares of its capital stock in the year, and at a time when it was a private corporation, equal to the total of(i)in respect of eligible dividends, an amount equal to the lesser of(A)38 1/3% of the total of all eligible dividends paid by it in the year, and(B)its eligible refundable dividend tax on hand at the end of the year, and(ii)in respect of taxable dividends (other than eligible dividends), an amount equal to the total of(A)the lesser of(I)38 1/3% of the total of all taxable dividends (other than eligible dividends) paid by it in the year, and(II)its non-eligible refundable dividend tax on hand at the end of the year, and(B)either(I)if the amount determined under subclause (A)(I) exceeds the amount determined under subclause (A)(II), the lesser of1the amount of the excess, and2the amount by which the corporation’s eligible refundable dividend tax on hand at the end of the year exceeds the amount, if any, determined under subparagraph (i) for the year, and(II)in any other case, nil; and(b)shall, with all due dispatch, make the dividend refund after sending the notice of assessment if an application for it has been made in writing by the corporation within the period within which the Minister would be allowed under subsection 152(4) to assess tax payable under this Part by the corporation for the year if that subsection were read without reference to paragraph 152(4)(a).
(i)in respect of eligible dividends, an amount equal to the lesser of(A)38 1/3% of the total of all eligible dividends paid by it in the year, and(B)its eligible refundable dividend tax on hand at the end of the year, and(ii)in respect of taxable dividends (other than eligible dividends), an amount equal to the total of(A)the lesser of(I)38 1/3% of the total of all taxable dividends (other than eligible dividends) paid by it in the year, and(II)its non-eligible refundable dividend tax on hand at the end of the year, and(B)either(I)if the amount determined under subclause (A)(I) exceeds the amount determined under subclause (A)(II), the lesser of1the amount of the excess, and2the amount by which the corporation’s eligible refundable dividend tax on hand at the end of the year exceeds the amount, if any, determined under subparagraph (i) for the year, and(II)in any other case, nil; and
(A)38 1/3% of the total of all eligible dividends paid by it in the year, and(B)its eligible refundable dividend tax on hand at the end of the year, and
(A)the lesser of(I)38 1/3% of the total of all taxable dividends (other than eligible dividends) paid by it in the year, and(II)its non-eligible refundable dividend tax on hand at the end of the year, and(B)either(I)if the amount determined under subclause (A)(I) exceeds the amount determined under subclause (A)(II), the lesser of1the amount of the excess, and2the amount by which the corporation’s eligible refundable dividend tax on hand at the end of the year exceeds the amount, if any, determined under subparagraph (i) for the year, and(II)in any other case, nil; and
(I)38 1/3% of the total of all taxable dividends (other than eligible dividends) paid by it in the year, and(II)its non-eligible refundable dividend tax on hand at the end of the year, and
(I)if the amount determined under subclause (A)(I) exceeds the amount determined under subclause (A)(II), the lesser of1the amount of the excess, and2the amount by which the corporation’s eligible refundable dividend tax on hand at the end of the year exceeds the amount, if any, determined under subparagraph (i) for the year, and(II)in any other case, nil; and
(a)was a corporation that controlled (within the meaning assigned by subsection 186(2)) the particular corporation at the time the dividend was paid; and(b)was a bankrupt at any time during that taxation year of the particular corporation.
(a)the day that is 120 days after the end of the year, and(b)the day that is 30 days after the day on which the corporation’s return of income under this Part for the year was filed under section 150, unless the return was filed on or before the day on or before which it was required to be filed,
(a)the amount by which the interest that was so paid or applied exceeds the interest, if any, computed in respect of the amount that is determined at the subsequent time to be the dividend refund shall be deemed to be an amount (in this subsection referred to as the “amount payable”) that became payable under this Part by the corporation at the particular time;(b)the corporation shall pay to the Receiver General interest at the prescribed rate on the amount payable, computed from the particular time to the day of payment; and(c)the Minister may at any time assess the corporation in respect of the amount payable and, where the Minister makes such an assessment, the provisions of Divisions I and J apply, with such modifications as the circumstances require, in respect of the assessment as though it had been made under section 152.
(a)disposed of before November 13, 1981,(b)was obligated to dispose of under the terms of an agreement in writing entered into before November 13, 1981, or(c)is deemed by subsection 44(2) to have disposed of at any time after November 12, 1981 because of an event referred to in paragraph (b), (c) or (d) of the definitionproceeds of dispositionin section 54 in respect of the disposition that occurred before November 13, 1981,
(a)the amount, if any, by which(i)the eligible portion of the corporation’s taxable capital gains for the yearexceeds the total of(ii)the eligible portion of its allowable capital losses for the year, and(iii)the amount, if any, deducted under paragraph 111(1)(b) in computing its taxable income for the year, or(b)the corporation’s income for the year from a source that is a property, other than(i)exempt income,(ii)an amount included under subsection 12(10.2) in computing the corporation’s income for the year,(iii)the portion of any dividend that was deductible in computing the corporation’s taxable income for the year, and(iv)income that, but for paragraph 108(5)(a), would not be income from a property,
(i)the eligible portion of the corporation’s taxable capital gains for the year
(ii)the eligible portion of its allowable capital losses for the year, and(iii)the amount, if any, deducted under paragraph 111(1)(b) in computing its taxable income for the year, or
(i)exempt income,(ii)an amount included under subsection 12(10.2) in computing the corporation’s income for the year,(iii)the portion of any dividend that was deductible in computing the corporation’s taxable income for the year, and(iv)income that, but for paragraph 108(5)(a), would not be income from a property,
(a)the total of the taxes payable under Part IV by the particular corporation for the year in respect of(i)eligible dividends received by the particular corporation in the year from corporations other than corporations with which the particular corporation is connected (in this paragraph, within the meaning assigned by subsection 186(4) on the assumption that the other corporation is at that time a payer corporation within the meaning of that subsection), and(ii)taxable dividends received by the particular corporation in the year from corporations that are connected with the particular corporation to the extent that such dividends caused a dividend refund to those corporations from their eligible refundable dividend tax on hand, and(b)where the particular corporation was a private corporation at the end of its preceding taxation year, the particular corporation’s eligible refundable dividend tax on hand at the end of that preceding year
(i)eligible dividends received by the particular corporation in the year from corporations other than corporations with which the particular corporation is connected (in this paragraph, within the meaning assigned by subsection 186(4) on the assumption that the other corporation is at that time a payer corporation within the meaning of that subsection), and(ii)taxable dividends received by the particular corporation in the year from corporations that are connected with the particular corporation to the extent that such dividends caused a dividend refund to those corporations from their eligible refundable dividend tax on hand, and
(c)the total of all amounts each of which is the portion, if any, of the particular corporation’s dividend refund from its eligible refundable dividend tax on hand determined, for its preceding taxation year, under(i)subparagraph (1)(a)(i), and(ii)clause (1)(a)(ii)(B). (impôt en main remboursable au titre de dividendes déterminés)
(i)subparagraph (1)(a)(i), and(ii)clause (1)(a)(ii)(B). (impôt en main remboursable au titre de dividendes déterminés)
(a)every amount of its income, loss, capital gain or capital loss for the year that can reasonably be regarded as being from a source in Canada were nil,(b)no amount were deducted under paragraph 111(1)(b) in computing its taxable income for the year, and(c)this Act were read without reference to paragraph (a) of the definitionincomeorlossin this subsection. (revenu de placement étranger)
(a)includes the income or loss from a specified investment business carried on by it in Canada other than income or loss from a source outside Canada, but(b)does not include the income or loss from any property(i)that is incident to or pertains to an active business carried on by it, or(ii)that is used or held principally for the purpose of gaining or producing income from an active business carried on by it. (perteourevenu)
(i)that is incident to or pertains to an active business carried on by it, or(ii)that is used or held principally for the purpose of gaining or producing income from an active business carried on by it. (perteourevenu)
(a)if the corporation was a Canadian-controlled private corporation throughout the year, the least of(i)the amount determined by the formulaA − BwhereAis 30 2/3% of the corporation’s aggregate investment income for the year, andBis the amount, if any, by which(A)the amount deducted under subsection 126(1) from the tax for the year otherwise payable by it under this Partexceeds(B)8% of its foreign investment income for the year,(ii)30 2/3% of the amount, if any, by which the corporation’s taxable income for the year exceeds the total of(A)the least of the amounts determined under paragraphs 125(1)(a) to (c) in respect of the corporation for the year,(B)100/(38 2/3) of the total of amounts deducted under subsection 126(1) from its tax for the year otherwise payable under this Part, and(C)the amount determined by multiplying the total of amounts deducted under subsection 126(2) from its tax for the year otherwise payable under this Part, by the relevant factor for the year, and(iii)the corporation’s tax for the year payable under this Part,(b)the total of the taxes payable under Part IV by the corporation for the year less the amount determined under paragraph (a) of the definitioneligible refundable dividend tax on handin respect of the corporation for the year, and(c)if the corporation was a private corporation at the end of its preceding taxation year, the corporation’s non-eligible refundable dividend tax on hand at the end of that preceding year
(i)the amount determined by the formulaA − BwhereAis 30 2/3% of the corporation’s aggregate investment income for the year, andBis the amount, if any, by which(A)the amount deducted under subsection 126(1) from the tax for the year otherwise payable by it under this Partexceeds(B)8% of its foreign investment income for the year,(ii)30 2/3% of the amount, if any, by which the corporation’s taxable income for the year exceeds the total of(A)the least of the amounts determined under paragraphs 125(1)(a) to (c) in respect of the corporation for the year,(B)100/(38 2/3) of the total of amounts deducted under subsection 126(1) from its tax for the year otherwise payable under this Part, and(C)the amount determined by multiplying the total of amounts deducted under subsection 126(2) from its tax for the year otherwise payable under this Part, by the relevant factor for the year, and(iii)the corporation’s tax for the year payable under this Part,
(A)the amount deducted under subsection 126(1) from the tax for the year otherwise payable by it under this Part
(B)8% of its foreign investment income for the year,
(A)the least of the amounts determined under paragraphs 125(1)(a) to (c) in respect of the corporation for the year,(B)100/(38 2/3) of the total of amounts deducted under subsection 126(1) from its tax for the year otherwise payable under this Part, and(C)the amount determined by multiplying the total of amounts deducted under subsection 126(2) from its tax for the year otherwise payable under this Part, by the relevant factor for the year, and
(d)the portion, if any, of the corporation’s dividend refund from its non-eligible refundable dividend tax on hand determined, for its preceding taxation year, under clause (1)(a)(ii)(A). (impôt en main remboursable au titre de dividendes non déterminés)
(a)the particular corporation has an amount of tax payable for the year under Part IV;(b)the particular corporation has claimed amounts under paragraph 186(1)(c) or (d) in respect of the year; and(c)the particular corporation would, in the absence of paragraphs 186(1)(c) and (d), have an amount determined, at the end of the year, under both paragraph (a) of the definitioneligible refundable dividend tax on handand paragraph (b) of the definitionnon-eligible refundable dividend tax on handin subsection (4).
(a)if the corporation is a Canadian-controlled private corporation throughout the taxation year and its preceding taxation year and is not a corporation in respect of which an election under subsection 89(11) applies to the taxation year or the preceding taxation year,(i)for the purpose of applying paragraph (b) of the definitioneligible refundable dividend tax on handin respect of the corporation at the end of the taxation year, the corporation’s eligible refundable dividend tax on hand at the end of its preceding taxation year is deemed to be the amount, if any, that is the lesser of(A)the amount determined by the formulaA − BwhereAis the corporation’s refundable dividend tax on hand at the end of its preceding taxation year, andBis the corporation’s dividend refund for its preceding taxation year, and(B)the amount determined by the formula(C − D) × EwhereCis the corporation’s general rate income pool at the end of its preceding taxation year,Dis the amount, if any, by which(I)the total of all amounts each of which is an eligible dividend paid by the corporation in its preceding taxation yearexceeds(II)the total of all amounts each of which is an excessive eligible dividend designation made by the corporation in its preceding taxation year, andEis 38 1/3%, and(ii)for the purpose of applying paragraph (c) of the definitionnon-eligible refundable dividend tax on handin respect of the corporation at the end of the taxation year, the corporation’s non-eligible refundable dividend tax on hand at the end of its preceding taxation year is deemed to be the amount determined by the formulaA − BwhereAis the amount determined under clause (a)(i)(A) in respect of the corporation at the end of the preceding taxation year, andBis the amount determined under clause (a)(i)(B) in respect of the corporation at the end of the preceding taxation year; and(b)in any other case, for the purpose of applying paragraph (b) of the definitioneligible refundable dividend tax on handin respect of the corporation at the end of the taxation year, the corporation’s eligible refundable dividend tax on hand at the end of its preceding taxation year is deemed to be the amount that would be determined for clause (a)(i)(A) if paragraph (a) applied to the corporation in respect of the taxation year.
(i)for the purpose of applying paragraph (b) of the definitioneligible refundable dividend tax on handin respect of the corporation at the end of the taxation year, the corporation’s eligible refundable dividend tax on hand at the end of its preceding taxation year is deemed to be the amount, if any, that is the lesser of(A)the amount determined by the formulaA − BwhereAis the corporation’s refundable dividend tax on hand at the end of its preceding taxation year, andBis the corporation’s dividend refund for its preceding taxation year, and(B)the amount determined by the formula(C − D) × EwhereCis the corporation’s general rate income pool at the end of its preceding taxation year,Dis the amount, if any, by which(I)the total of all amounts each of which is an eligible dividend paid by the corporation in its preceding taxation yearexceeds(II)the total of all amounts each of which is an excessive eligible dividend designation made by the corporation in its preceding taxation year, andEis 38 1/3%, and(ii)for the purpose of applying paragraph (c) of the definitionnon-eligible refundable dividend tax on handin respect of the corporation at the end of the taxation year, the corporation’s non-eligible refundable dividend tax on hand at the end of its preceding taxation year is deemed to be the amount determined by the formulaA − BwhereAis the amount determined under clause (a)(i)(A) in respect of the corporation at the end of the preceding taxation year, andBis the amount determined under clause (a)(i)(B) in respect of the corporation at the end of the preceding taxation year; and
(A)the amount determined by the formulaA − BwhereAis the corporation’s refundable dividend tax on hand at the end of its preceding taxation year, andBis the corporation’s dividend refund for its preceding taxation year, and(B)the amount determined by the formula(C − D) × EwhereCis the corporation’s general rate income pool at the end of its preceding taxation year,Dis the amount, if any, by which(I)the total of all amounts each of which is an eligible dividend paid by the corporation in its preceding taxation yearexceeds(II)the total of all amounts each of which is an excessive eligible dividend designation made by the corporation in its preceding taxation year, andEis 38 1/3%, and
(I)the total of all amounts each of which is an eligible dividend paid by the corporation in its preceding taxation year
(II)the total of all amounts each of which is an excessive eligible dividend designation made by the corporation in its preceding taxation year, and
(a)the corporation is a predecessor corporation (within the meaning assigned by subsection 87(1)) in respect of an amalgamation (within the meaning assigned by subsection 87(1));(b)the corporation has an amount of refundable dividend tax on hand at the end of its taxation year that ends because of paragraph 87(2)(a); and(c)the first taxation year of the new corporation (within the meaning assigned by subsection 87(1)) in respect of the amalgamation is one to which the definitioneligible refundable dividend tax on handin subsection (4) applies.
(a)for the purposes of subsection 129(4), in computing the recipient corporation’s income for the year from a source in Canada that is a property,(i)there shall not be included any portion (in this subsection referred to as the “deductible portion”) of the particular amount that was or may be deductible in computing the income of the associated corporation for any taxation year from an active business carried on by it in Canada, and(ii)no deduction shall be made in respect of any outlay or expense, to the extent that that outlay or expense may reasonably be regarded as having been made or incurred by the recipient corporation for the purpose of gaining or producing the deductible portion; and(b)for the purposes of this subsection and section 125,(i)the deductible portion shall be deemed to be income of the recipient corporation for the particular year from an active business carried on by it in Canada, and(ii)any outlay or expense, to the extent described in subparagraph 129(6)(a)(ii), shall be deemed to have been made or incurred by the recipient corporation for the purpose of gaining or producing that income.
(i)there shall not be included any portion (in this subsection referred to as the “deductible portion”) of the particular amount that was or may be deductible in computing the income of the associated corporation for any taxation year from an active business carried on by it in Canada, and(ii)no deduction shall be made in respect of any outlay or expense, to the extent that that outlay or expense may reasonably be regarded as having been made or incurred by the recipient corporation for the purpose of gaining or producing the deductible portion; and
(i)the deductible portion shall be deemed to be income of the recipient corporation for the particular year from an active business carried on by it in Canada, and(ii)any outlay or expense, to the extent described in subparagraph 129(6)(a)(ii), shall be deemed to have been made or incurred by the recipient corporation for the purpose of gaining or producing that income.
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]R.S., 1985, c. 1 (5th Supp.), s. 1291994, c. 7, Sch