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(a) the portion of the dividend that is in
respect of capital gains from dispositions of
property that occurred in the year and
before February 28, 2000 is deemed to be
that proportion of the dividend that the
number of days that are in that year and
before February 28, 2000 is of the number
of days that are in that year;
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(b) the portion of the dividend that is in
respect of capital gains from dispositions of
property that occurred in the year and in the
period that began at the beginning of
February 28, 2000 and ended at the end of
October 17, 2000 is deemed to be that
proportion of the dividend that the number
of days that are in the year and in that period
is of the number of days that are in the year;
and
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(c) the portion of the dividend that is in
respect of capital gains from dispositions of
property that occurred in the year and in the
period that begins at the beginning of
October 18, 2000 and ends at the end of the
year, is deemed to be that proportion of the
dividend that the number of days that are in
the year and in that period is of the number
of days that are in the year.
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| Allocation
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(1.8) For the purposes of subsection (1.6)
and (1.7), where the total amount of dividends
paid by a mutual fund corporation in the
period that begins 60 days after the beginning
of the corporation's taxation year that includes
either February 28, 2000 or October 17, 2000
and ends 60 days after the end of that year and
to which subsection (1) applies exceeds the
total amount of the corporation's net capital
gains from dispositions of property in that year
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(a) the amount of those dividends to which
subsections (1.6) and (1.7) apply is the
amount of the corporation's net capital
gains from dispositions of property in that
year, and
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(b) the amount, if any, by which total
amount of the dividends paid by the
corporation in the period exceeds the total
amount of the corporation's net capital
gains from dispositions of property in that
year is deemed to be a dividend in respect
of capital gains from dispositions of
property in the first of the periods described
in subsection (1.6) that ends in the year.
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| Allocation
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(1.9) Where no dividend to which
subsection (1.7) applies is paid by a mutual
fund corporation in respect of its net taxable
capital gains for its taxation year that includes
either February 28, 2000 or October 17, 2000,
the corporation has net capital gains or net
capital losses from dispositions of property in
the year, and the corporation so elects under
this subsection in its return of income for the
year
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(a) the portion of those net capital gains and
net capital losses that is in respect of capital
gains and losses from dispositions of
property that occurred before February 28,
2000 is deemed to be that proportion of the
net capital gains or net capital losses
respectively that the number of days that are
in the year and before February 28, 2000 is
of the number of days that are in the year,
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(b) the portion of those net capital gains and
net capital losses that is in respect of capital
gains and losses from dispositions of
property that occurred in the year and in the
period that began at the beginning of
February 28, 2000 and ended at the end of
October 17, 2000, is deemed to be that
proportion of the net capital gains or net
capital losses respectively that the number
of days that are in the year and in that period
is of the number of days that are in the year,
and
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(c) the portion of those net capital gains and
net capital losses that is in respect of capital
gains and losses from dispositions of
property that occurred in the year and in the
period that began at the beginning of
October 18, 2000 and ended at the end of the
year, is deemed to be that proportion of the
net capital gains or net capital losses
respectively that the number of days that are
in the year and in that period is of the
number of days that are in the year,
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and, for the purpose of this subsection,
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(d) the net capital gains of a mutual fund
corporation from dispositions of property in
the year is the amount, if any, by which the
corporation's capital gains from
dispositions of property in a year exceeds
the corporation's capital losses from
dispositions of property in the year, and
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(e) the net capital losses of a mutual fund
corporation from dispositions of property in
the year is the amount, if any, by which the
corporation's capital losses from
dispositions of property in a year exceeds
the corporation's capital gains from
dispositions of property in the year.
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(3) Paragraph 131(2)(a) of the Act is
replaced by the following:
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(a) may, on sending the notice of
assessment for the year, refund an amount
(in this subsection referred to as its ``capital
gains refund'' for the year) equal to the
lesser of
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(I) all capital gains dividends paid
by the corporation in the period
commencing 60 days after the
beginning of the year and ending 60
days after the end of the year, and
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(II) its capital gains redemptions for
the year, and
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(B) the amount, if any, that the
Minister determines to be reasonable
in the circumstances, after giving
consideration to the percentages
applicable in determining the
corporation's capital gains refund for
the year and preceding taxation years
and the percentages applicable in
determining the corporation's
refundable capital gains tax on hand at
the end of the year, and
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(ii) the corporation's refundable capital
gains tax on hand at the end of the year;
and
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(4) Subparagraph (b)(iii) of the definition
``capital gains dividend account'' in
subsection 131(6) of the Act is replaced by
the following:
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(iii) the total of all amounts each of
which is
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(A) an amount equal to 100/21 of its
capital gains refund for any taxation
year throughout which it was a mutual
fund corporation where the year ended
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(I) more than 60 days before that
time, and
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(II) before February 28, 2000,
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(B) an amount equal to 100/18.7 of its
capital gains refund for any taxation
year throughout which it was a mutual
fund corporation where the year ended
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(I) more than 60 days before that
time, and
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(II) after February 27, 2000 and
before October 18, 2000, or
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(C) an amount equal to 100/14 of its
capital gain refund for any taxation
year throughout which it was a mutual
fund corporation where the year ended
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(I) more than 60 days before that
time, and
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(II) after October 17, 2000;
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(5) The description of C in the definition
``capital gains redemptions'' in subsection
131(6) of the Act is amended by replacing
the reference to the fraction ``100/21'' with
a reference to the fraction ``100/14''.
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(6) Paragraph 131(8.1)(a) of the Act is
replaced by the following:
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(a) throughout the period that begins on the
later of February 21, 1990 and the day of its
incorporation and ends at that time, all or
substantially all of its property consisted of
property other than property that would be
taxable Canadian property if the definition
``taxable Canadian property'' in subsection
248(1) were read without reference to
paragraph (b) of that definition; or
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(7) Subsections (1) to (5) apply to taxation
years that end after February 27, 2000
except that, for a taxation year of a mutual
fund corporation that includes either
February 28, 2000 or October 17, 2000 or
began after February 28, 2000 and ended
before October 17, 2000,
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(a) the reference to the percentage
``14%'' in clause 131(2)(a)(i)(A) of the
Act, as enacted by subsection (3), shall be
read as a reference to the percentage
determined when 28% is multiplied by
the fraction in paragraph 38(a) of the
Act, as enacted by subsection 22(1), that
applies to the corporation for the year;
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(b) the reference to the fraction
``100/18.7'' in clause (b)(iii)(B) of the
definition ``capital gains dividend
account'' in subsection 131(6) of the Act,
as enacted by subsection (4), shall be read
as a reference to the fraction ``100/28X'',
where ``X'' is the fraction in paragraph
38(a) of the Act, as enacted by subsection
22(1), that applies to the corporation for
the year; and
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(c) the reference to the fraction ``100/14''
in the description of C in the definition
``capital gains redemptions'' in
subsection 131(6) of the Act, as enacted
by subsection (5), shall be read as a
reference to the fraction ``100/28X'',
where ``X'' is the fraction in paragraph
38(a) of the Act, as enacted by subsection
22(1), that applies to the corporation for
the year.
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(8) Subsection (6) applies after October 1,
1996.
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129. (1) Paragraph 132(1)(a) of the Act is
replaced by the following:
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(a) may, on sending the notice of
assessment for the year, refund an amount
(in this subsection referred to as its ``capital
gains refund'' for the year) equal to the
lesser of
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(A) 14.5% of the total of the trust's
capital gains redemptions for the year,
and
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(B) the amount, if any, that the
Minister determines to be reasonable
in the circumstances, after giving
consideration to the percentages
applicable in determining the trust's
capital gains refunds for the year and
preceding taxation years and the
percentages applicable in determining
the trust's refundable capital gains tax
on hand at the end of the year, and
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(ii) the trust's refundable capital gains tax
on hand at the end of the year; and
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(2) The first formula in the definition
``capital gains redemptions'' in subsection
132(4) of the Act is replaced by the
following:
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(A/B x (C + D)) - E
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(3) The description of A in the definition
``capital gains redemptions'' in subsection
132(4) of the Act is replaced by the
following:
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A is the total of all amounts each of which
is the portion of an amount paid by the
trust in the year on the redemption of a
unit in the trust that is included in the
proceeds of disposition in respect of that
redemption (other than under paragraph
107(2.1)(c)),
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(4) The description of C in the definition
``capital gains redemptions'' in subsection
132(4) of the Act is amended by replacing
the reference to the fraction ``100/21.75''
with a reference to the fraction ``100/14.5''.
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(5) The definition ``capital gains
redemptions'' in subsection 132(4) of the
Act is amended by striking out the word
``and'' at the end of the description of C, by
adding the word ``and'' at the end of the
description of D and by adding the
following after the description of D:
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E is twice the total of all amounts each of
which is an amount designated under
subsection 104(21) for the year by the
trust in respect of a unit of the trust
redeemed by the trust at any time in the
year and after December 21, 2000;
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(6) Section 132 of the Act is amended by
adding the following after subsection (6.1):
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| Retention of
status as
mutual fund
trust
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(6.2) A trust is deemed to be a mutual fund
trust throughout a calendar year where
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(a) at any time in the year, the trust would,
if this section were read without reference
to this subsection, have ceased to be a
mutual fund trust
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(i) because the condition described in
paragraph 108(2)(a) ceased to be
satisfied,
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(ii) because of the application of
paragraph (6)(c), or
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(iii) because the trust ceased to exist;
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(b) the trust was a mutual fund trust at the
beginning of the year; and
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(c) the trust would, throughout the portion
of the year throughout which it was in
existence, have been a mutual fund trust if
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(i) in the case where the condition
described in paragraph 108(2)(a) was
satisfied at any time in the year, that
condition were satisfied throughout the
year,
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(ii) subsection (6) were read without
reference to paragraph (c) of that
subsection, and
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(iii) this section were read without
reference to this subsection.
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(7) Paragraphs 132(7)(a) and (b) of the
Act are replaced by the following:
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(a) throughout the period that began on the
later of February 21, 1990 and the day of its
creation and ended at that time, all or
substantially all of its property consisted of
property other than property that would be
taxable Canadian property if the definition
``taxable Canadian property'' in subsection
248(1) were read without reference to
paragraph (b) of that definition; or
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(b) it has not issued any unit (other than a
unit issued to a person as a payment , or in
satisfaction of the person's right to enforce
payment, of an amount out of the trust's
income determined before the application
of subsection 104(6), or out of the trust's
capital gains ) of the trust after February 20,
1990 and before that time to a person who,
after reasonable inquiry, it had reason to
believe was non-resident, except where the
unit was issued to that person under an
agreement in writing entered into before
February 21, 1990.
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(8) Subsections (1), (2), (4) and (5) apply
to taxation years that end after February
27, 2000 except that, for a taxation year of
a mutual fund trust that includes either
February 28, 2000 or October 17, 2000 or
began after February 28, 2000 and ended
before October 17, 2000,
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(a) the reference to the percentage
``14.5%'' in paragraph 132(1)(a) of the
Act, as enacted by subsection (1), shall be
read as a reference to the percentage
determined when 29% is multiplied by
the fraction in paragraph 38(a) of the
Act, as enacted by subsection 22(1), that
applies to the trust for the year;
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(b) the reference to the fraction
``100/14.5'' in the description of C in the
definition ``capital gains redemptions'' in
subsection 132(4) of the Act, as enacted
by subsection (4), shall be read as a
reference to the fraction ``100/29X'',
where ``X'' is the fraction in paragraph
38(a) of the Act, as enacted by subsection
22(1), that applies to the trust for the
year; and
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(c) the reference to the word ``twice'' in
the description of E in the definition
``capital gains redemption'' in subsection
132(4) of the Act, as enacted by
subsection (5), shall be read as a reference
to the expression ``the fraction that is the
reciprocal of the fraction in paragraph
38(a), as enacted by subsection 22(1) of
the Income Tax Amendments Act, 2000,
that applies to the taxpayer for the year,
multiplied by''.
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(9) Subsection (3) applies to taxation
years that end after February 27, 2000,
except that for redemptions of units in a
mutual fund trust that occur in such a year
and before March 16, 2001, the description
of A in the definition ``capital gains
redemptions'' in subsection 132(4) of the
Act, as enacted by subsection (3), shall be
read as follows:
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A is the total of all amounts each of which
is the portion of an amount paid by the
trust in the year on the redemption of a
unit in the trust that is included in the
proceeds of disposition in respect of that
redemption,
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(10) Subsection (6) applies to the 1990
and subsequent taxation years.
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(11) Paragraph 132(7)(a) of the Act, as
enacted by subsection (7), applies after
October 1, 1996.
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(12) Paragraph 132(7)(b) of the Act, as
enacted by subsection (7), applies after
February 20, 1990.
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130. (1) Paragraph 132.11(1)(b) of the Act
is replaced by the following:
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(b) where the trust's taxation year ends on
December 15 because of paragraph (a),
subject to subsection (1.1), each subsequent
taxation year of the trust is deemed to be the
period that begins at the beginning of
December 16 of a calendar year and ends at
the end of December 15 of the following
calendar year or at such earlier time as is
determined under paragraph 132.2(1)(b) or
subsection 142.6(1); and
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(2) Section 132.11 of the Act is amended
by adding the following after subsection (1):
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| Revocation of
election
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(1.1) Where a particular taxation year of a
trust ends on December 15 of a calendar year
because of an election made under paragraph
(1)(a), the trust applies to the Minister in
writing before December 15 of that calendar
year (or before a later time that is acceptable
to the Minister) to have this subsection apply
to the trust, with the concurrence of the
Minister
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(a) the trust's taxation year following the
particular taxation year is deemed to begin
immediately after the end of the particular
taxation year and end at the end of that
calendar year; and
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(b) each subsequent taxation year of the
trust is deemed to be determined as if that
election had not been made.
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(3) Subsection 132.11(4) of the Act is
replaced by the following:
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| Amounts paid
or payable to
beneficiaries
|
(4) For the purposes of subsections (5) and
(6) and 104(6) and (13) and notwithstanding
subsection 104(24), each amount that is paid,
or that becomes payable, by a trust to a
beneficiary after the end of a particular
taxation year of the trust that ends on
December 15 of a calendar year because of
subsection (1) and before the end of that
calendar year, is deemed to have been paid or
to have become payable, as the case may be,
to the beneficiary at the end of the particular
year and not at any other time.
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(4) Subsection 132.11(6) of the Act is
amended by adding the word ``and'' at the
end of paragraph (a), by striking out the
word ``and'' at the end of paragraph (b) and
by repealing paragraph (c).
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(5) Subsections (1) and (2) apply to
taxation years that end after 1999.
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(6) Subsections (3) and (4) apply to the
2000 and subsequent taxation years.
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