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Bill C-22

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Meaning of ``excluded obligation''

(8) For the purposes of subsection (7), ``excluded obligation'' means any bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation

(4) Paragraph 214(15)(a) of the Act is replaced by the following:

    (a) where a non-resident person has entered into an agreement under the terms of which the non-resident person agrees to guarantee the repayment, in whole or in part, of the principal amount of a bond, debenture, bill, note, mortgage, hypothecary claim or similar obligation of a person resident in Canada, any amount paid or credited as consideration for the guarantee is deemed to be a payment of interest on that obligation; and

(5) Subsection (4) is deemed to have come into force on March 1, 1994.

228. The definition ``security interest'' in subsection 224(1.3) of the English version of the Act is replaced by the following:

``security interest''
« garantie »

``security interest'' means any interest in property that secures payment or performance of an obligation and includes an interest created by or arising out of a debenture, mortgage, hypothec, lien, pledge, charge, deemed or actual trust, assignment or encumbrance of any kind whatever, however or whenever arising, created, deemed to arise or otherwise provided for;

229. Paragraph 227(5.1)(i) of the Act is replaced by the following:

    (i) an executor, a liquidator of a succession or an administrator;

230. (1) The definitions ``legal representative'', ``lending asset'' and ``person'' in subsection 248(1) of the Act are replaced by the following:

``legal representa-
tive''
« représen-
tant légal »

``legal representative'' of a taxpayer means a trustee in bankruptcy, an assignee, a liquidator, a curator, a receiver of any kind, a trustee, an heir, an administrator, an executor, a liquidator of a succession, a committee, or any other like person, administering, winding up, controlling or otherwise dealing in a representative or fiduciary capacity with the property that belongs or belonged to, or that is or was held for the benefit of, the taxpayer or the taxpayer's estate;

``lending asset''
« titre de crédit »

``lending asset'' means a bond, debenture, mortgage, hypothecary claim, note, agreement of sale or any other indebtedness or a prescribed share, but does not include a prescribed property;

``person''
« personne »

``person'', or any word or expression descriptive of a person, includes any corporation, and any entity exempt, because of subsection 149(1), from tax under Part I on all or part of the entity's taxable income and the heirs, executors, liquidators of a succession, administrators or other legal representatives of such a person, according to the law of that part of Canada to which the context extends;

(2) Subsection 248(4) of the Act is replaced by the following:

Interest in real property

(4) In this Act, an interest in real property includes a leasehold interest in real property but does not include an interest as security only derived by virtue of a mortgage, hypothecary claim, agreement for sale or similar obligation.

(3) The portion of subsection 248(20) of the Act before paragraph (a) is replaced by the following:

Partition of property

(20) Subject to subsections (21) to (23), for the purposes of this Act, where at any time a property owned by two or more persons is the subject of a partition, the following rules apply, notwithstanding any retroactive or declaratory effect of the partition:

(4) The portion of subsection 248(21) of the Act before paragraph (a) is replaced by the following:

Subdivision of property

(21) Where a property that was owned by two or more persons is the subject of a partition among those persons and, as a consequence thereof, each such person has, in the property, a new interest the fair market value of which immediately after the partition, expressed as a percentage of the fair market value of all the new interests in the property immediately after the partition, is equal to the fair market value of that person's undivided interest immediately before the partition, expressed as a percentage of the fair market value of all the undivided interests in the property immediately before the partition,

(5) Paragraph 248(21)(c) of the Act is replaced by the following:

    (c) subdivisions of a building or of a parcel of land that are established in the course of, or in contemplation of, a partition and that are co-owned by the same persons who co-owned the building or the parcel of land, or by their assignee, shall be regarded as one property, and

231. Subsection 256(4) of the Act is replaced by the following:

Saving provision

(4) Where one corporation would, but for this subsection, be associated with another corporation in a taxation year by reason of both of the corporations being controlled by the same executor, liquidator of a succession or trustee and it is established to the satisfaction of the Minister

    (a) that the executor, liquidator or trustee did not acquire control of the corporations as a result of one or more estates or trusts created by the same individual or two or more individuals not dealing with each other at arm's length, and

    (b) that the estate or trust under which the executor, liquidator or trustee acquired control of each of the corporations arose only on the death of the individual creating the estate or trust,

the two corporations are deemed, for the purposes of this Act, not to be associated with each other in the year.

R.S., c. 2 (5th Supp.)

Income Tax Application Rules

232. (1) The definition ``obligation'' in subsection 26(12) of the Income Tax Application Rules is replaced by the following:

``obligation''
« obligation »

``obligation'' means a bond, debenture, bill, note, mortgage, hypothecary claim or agreement of sale;

(2) The portion of subsection 26(23) of the Rules before paragraph (a) is replaced by the following:

Obligations received on amalgama-
tions

(23) Where, after May 6, 1974, there has been an amalgamation (within the meaning assigned by section 87 of the amended Act) of two or more corporations (each of which is in this subsection referred to as a ``predecessor corporation'') to form one corporate entity (in this subsection referred to as the ``new corporation'') and a taxpayer has acquired a capital property that was a bond, debenture, note, mortgage, hypothecary claim or other similar obligation of the new corporation (in this subsection referred to as the ``new obligation'') as sole consideration for the disposition on the amalgamation of a bond, debenture, note, mortgage, hypothecary claim or other similar obligation respectively of a predecessor corporation (in this subsection referred to as the ``old obligation'') owned by the taxpayer on December 31, 1971 and thereafter without interruption until immediately before the amalgamation, notwithstanding any other provision of this Act or of the amended Act, for the purposes of subsection 88(2.1) of the amended Act and of determining the cost to the taxpayer and the adjusted cost base to the taxpayer of the new obligation,

R.S., c. E-15

Excise Tax Act

233. Paragraph (a) of the definition ``manufacturer or producer'' in subsection 2(1) of the Excise Tax Act is replaced by the following:

      (a) the assignee, trustee in bankruptcy, liquidator, executor, liquidator of a succession or curator of any manufacturer or producer and, generally, any person who continues the business of a manufacturer or producer or disposes of his assets in any fiduciary capacity, including a bank exercising any powers conferred upon it by the Bank Act and a trustee for bondholders,

R.S., c. 7 (2nd Supp.), s. 38(1)

234. Subsection 81(1) of the Act is replaced by the following:

Certificate before distribution

81. (1) Every executor, liquidator of a succession, administrator, assignee, liquidator or other like person, other than a trustee in bankruptcy, shall, before distributing any assets under his control in that capacity, obtain a certificate from the Minister certifying that no tax, penalty, interest or other sum under this Act, other than Part I, chargeable against or payable by that person in that capacity or chargeable against or payable in respect of those assets, remains unpaid or that security for the payment thereof has, in accordance with section 80.1, been accepted by the Minister.

1999, c. 17, s. 151

235. Subsection 106.1(1) of the Act is replaced by the following:

Presumption

106.1 (1) Every document purporting to be an order, direction, notice, certificate, requirement, decision, determination, assessment, discharge of mortgage or acquittance of a hypothecary claim or other document and purporting to have been executed under, or in the course of the administration or enforcement of, this Act or the regulations over the name in writing of the Minister, the Deputy Minister of National Revenue, the Commissioner or an officer authorized by the Minister to exercise his powers or perform his duties or functions under this Act is deemed to be a document signed, made and issued by the Minister, Deputy Minister, Commissioner or officer, unless called into question by the Minister or by some person acting for the Minister or Her Majesty.

1997, c. 10, s. 1(12)

236. The definition ``personal representative'' in subsection 123(1) of the Act is replaced by the following:

``personal representa-
tive''
« représen-
tant personnel »

``personal representative'', of a deceased individual or the estate of a deceased individual, means the executor of the individual's will, the liquidator of the individual's succession, the administrator of the estate or any person who is responsible under the appropriate law for the proper collection, administration, disposition and distribution of the assets of the estate;

1994, c. 9, s. 20(1)

237. Paragraph 278(3)(d) of the Act is replaced by the following:

    (d) a corporation authorized under the laws of Canada or a province to accept deposits from the public and that carries on the business of lending money on the security of real estate or investing in mortgages or hypothecary claims on real estate.

PART 3

R.S., c. 1 (5th Supp.)

TECHNICAL AMENDMENTS TO THE INCOME TAX ACT

238. The portion of subsection 54.1(1) of the English version of the Income Tax Act before paragraph (a) is replaced by the following:

Exception to principal residence rules

54.1 (1) A taxation year in which a taxpayer does not ordinarily inhabit the taxpayer's property as a consequence of the relocation of the taxpayer's or the taxpayer's spouse's or common-law partner's place of employment while the taxpayer, spouse or common-law partner, as the case may be, is employed by an employer who is not a person to whom the taxpayer or the spouse is related is deemed not to be a previous taxation year referred to in paragraph (d) of the definition ``principal residence'' in section 54 if

239. Paragraph 60.01(b) of the French version of the Act is replaced by the following:

    b) un montant visé à l'alinéa a) et qu'il est raisonnable de considérer comme provenant de cotisations que verse au mécanisme de retraite étranger une personne autre que le contribuable ou son époux ou conjoint de fait ou ex-époux ou ancien conjoint de fait.

240. Paragraph (a) of the description of A in subsection 60.1(2) of the French version of the Act is replaced by the following:

      a) l'époux ou le conjoint de fait ou l'ex-époux ou l'ancien conjoint de fait du contribuable,

241. The portion of the definition ``pre-1972 spousal trust'' in subsection 108(1) of the Act after paragraph (b) is replaced by the following:

    that, throughout the period beginning at the time it was created and ending at the earliest of January 1, 1993, the day on which the taxpayer's spouse or common-law partner died and the particular time, was a trust under which the taxpayer's spouse or common-law partner was entitled to receive all of the income of the trust that arose before the spouse's or common-law partner's death, unless a person other than the spouse or common-law partner received or otherwise obtained the use of any of the income or capital of the trust before the end of that period;

242. The portion of subparagraph (a)(i) of the definition ``interest in a family farm partnership'' in subsection 110.6(1) of the English version of the Act after clause (E) is replaced by the following:

        principally in the course of carrying on the business of farming in Canada in which the individual, a beneficiary referred to in clause (C) or a spouse, common-law partner, child or parent of the individual or of a beneficiary referred to in clause (C) was actively engaged on a regular and continuous basis,

243. The portion of subsection 118(5) of the English version of the Act before paragraph (a) is replaced by the following:

Support

(5) No amount may be deducted under subsection (1) in computing an individual's tax payable under this Part for a taxation year in respect of a person where the individual is required to pay a support amount (within the meaning assigned by subsection 56.1(4)) to the individual's spouse or common-law partner or former spouse or common-law partner in respect of the person and the individual

244. Paragraph 118.2(2)(q) of the English version of the Act is replaced by the following:

    (q) as a premium, contribution or other consideration under a private health services plan in respect of one or more of the individual, the individual's spouse or common-law partner and any member of the individual's household with whom the individual is connected by blood relationship, marriage, common-law partnership or adoption, except to the extent that the premium, contribution or consideration is deducted under subsection 20.01(1) in computing an individual's income from a business for any taxation year.

245. Subparagraph 143(5)(b)(i) of the Act is replaced by the following:

      (i) the individual is one of two individuals who were married to each other, or in a common-law partnership, at the end of a preceding taxation year of the trust and at the end of the particular year,

246. (1) The definition ``spousal plan'' in subsection 146(1) of the English version of the Act is repealed.

(2) Subsection 146(1) of the English version of the Act is amended by adding the following in alphabetical order:

``spousal or common-law partner plan''
« régime au profit de l'époux ou du conjoint de fait »

``spousal or common-law partner plan'', in relation to a taxpayer, means

      (a) a registered retirement savings plan

        (i) to which the taxpayer has, at a time when the taxpayer's spouse or common-law partner was the annuitant under the plan, paid a premium, or

        (ii) that has received a payment out of or a transfer from a registered retirement savings plan or a registered retirement income fund that was a spousal or common-law partner plan in relation to the taxpayer, or

      (b) a registered retirement income fund that has received a payment out of or a transfer from a spousal or common-law partner plan in relation to the taxpayer;

(3) The portion of paragraph 146(5.1)(a) of the English version of the Act before subparagraph (i) is replaced by the following:

    (a) the total of all amounts each of which is a premium paid by the taxpayer after 1990 and on or before the day that is 60 days after the end of the year under a registered retirement savings plan under which the taxpayer's spouse or common-law partner (or, where the taxpayer died in the year or within 60 days after the end of the year, an individual who was the taxpayer's spouse or common-law partner immediately before the death) was the annuitant at the time the premium was paid, other than the portion, if any, of the premium

(4) The portion of subsection 146(8.3) of the English version of the Act before paragraph (a) is replaced by the following:

Spousal or common-law partner payments

(8.3) Where at any time in a taxation year a particular amount in respect of a registered retirement savings plan that is a spousal or common-law partner plan in relation to a taxpayer is required by reason of subsection (8) or paragraph (12)(b) to be included in computing the income of the taxpayer's spouse or common-law partner before the plan matures or as a payment in full or partial commutation of a retirement income under the plan and the taxpayer is not living separate and apart from the taxpayer's spouse or common-law partner at that time by reason of the breakdown of their marriage or common-law partnership, there shall be included at that time in computing the taxpayer's income for the year an amount equal to the lesser of

247. Clause (f)(ii)(B) of the definition ``small business property'' in subsection 206(1) of the Act is replaced by the following:

          (B) the annuitant under the particular fund or plan (or the spouse, common-law partner, former spouse or former common-law partner of that annuitant) is also the annuitant under the fund or plan referred to in clause (A), or

        (iii) an annuitant under a registered retirement income fund or registered retirement savings plan that governs the taxpayer, or a spouse, common-law partner, former spouse or former common-law partner of that annuitant;

248. (1) Subject to subsection (2), sections 238 to 247 apply to the 2001 and following taxation years.

(2) If a taxpayer and a person have jointly elected pursuant to section 144 of the Modernization of Benefits and Obligations Act, in respect of the 1998, 1999 or 2000 taxation years, sections 238 to 247 apply to the taxpayer and the person in respect of the applicable taxation year and subsequent taxation years.

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