Bill C-70
If you have any questions or comments regarding the accessibility of this publication, please contact us at accessible@parl.gc.ca.
|
42-43-44 ELIZABETH II |
|
|
CHAPTER 21 |
|
|
An Act to amend the Income Tax Act, the
Income Tax Application Rules and
related Acts
|
|
|
[Assented to 22nd June, 1995]
|
|
|
|
|
R.S., c. 1 (5th
Supp.); 1994,
cc. 7, 8, 13,
21, 28, 29, 38,
41
|
INCOME TAX ACT |
|
|
PART I |
|
|
AMENDMENTS RELATING TO DEBT FORGIVENESS AND FORECLOSURE |
|
|
1. (1) Subsection 6(15) of the Income Tax
Act is replaced by the following:
|
|
Forgiveness
of employee
debt
|
(15) For the purpose of paragraph (1)(a),
|
|
|
|
|
|
|
|
Forgiven
amount
|
(15.1) For the purpose of subsection (15),
the ``forgiven amount'' at any time in respect
of an obligation issued by a debtor has the
meaning that would be assigned by subsection
80(1) if
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Subsection (1) applies to taxation
years that end after February 21, 1994.
|
|
|
2. (1) The portion of subsection 13(7.1) of
the Act before paragraph (a) is replaced by
the following:
|
|
Deemed
capital cost of
certain
property
|
(7.1) For the purposes of this Act, where
section 80 applied to reduce the capital cost to
a taxpayer of a depreciable property or a
taxpayer deducted an amount under
subsection 127(5) or (6) in respect of a
depreciable property or received or is entitled
to receive assistance from a government,
municipality or other public authority in
respect of, or for the acquisition of,
depreciable property, whether as a grant,
subsidy, forgivable loan, deduction from tax,
investment allowance or as any other form of
assistance other than
|
|
|
(2) Paragraph 13(7.1)(c) of the Act is
replaced by the following:
|
|
|
|
|
|
(3) Subsection 13(7.1) of the Act is
amended by striking out the word ``and'' at
the end of paragraph (e), by adding the
word ``and'' at the end of paragraph (f) and
by adding the following after paragraph (f):
|
|
|
|
|
|
(4) Paragraph (h) of the definition
``proceeds of disposition'' in subsection
13(21) of the Act is replaced by the
following:
|
|
|
|
|
|
(5) The formula in the definition
``undepreciated capital cost'' in subsection
13(21) of the Act is replaced by the
following:
|
|
|
(A + B + C + D) - (E + E.1 + F + G + H + I + J)
|
|
|
(6) The definition ``undepreciated capital
cost'' in subsection 13(21) of the Act is
amended by adding the following after the
description of E:
|
|
|
|
|
|
(7) Subsections (1) to (6) apply to taxation
years that end after February 21, 1994.
|
|
|
3. (1) The second formula in the
definition ``cumulative eligible capital'' in
subsection 14(5) of the Act is replaced by the
following:
|
|
|
(P + P.1 + Q) - R
|
|
|
(2) The definition ``cumulative eligible
capital'' in subsection 14(5) of the Act is
amended by adding the following after the
description of P:
|
|
|
|
|
|
(3) Section 14 of the Act is amended by
adding the following after subsection (9):
|
|
Deemed
eligible
capital
expenditure
|
(10) For the purposes of this Act, where a
taxpayer received or is entitled to receive
assistance from a government, municipality or
other public authority in respect of, or for the
acquisition of, property the cost of which is an
eligible capital expenditure of the taxpayer in
respect of a business, whether as a grant,
subsidy, forgivable loan, deduction from tax,
investment allowance or as any other form of
assistance, that eligible capital expenditure
shall at any time be deemed to be the amount,
if any, by which the total of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
exceeds
|
|
|
|
|
Receipt of
public
assistance
|
(11) For the purpose of subsection (10),
where at any time a taxpayer who is a
beneficiary under a trust or a member of a
partnership received or is entitled to receive
assistance from a government, municipality or
other public authority, whether as a grant,
subsidy, forgivable loan, deduction from tax,
investment allowance or as any other form of
assistance, the amount of the assistance that
can reasonably be considered to be in respect
of, or for the acquisition of, property the cost
of which was an eligible capital expenditure of
the trust or partnership shall be deemed to
have been received at that time by the trust or
partnership, as the case may be, as assistance
from the government, municipality or other
public authority for the acquisition of such
property.
|
|
|
(4) Subsections (1) and (2) apply to
taxation years that end after February 21,
1994.
|
|
|
(5) Subsection (3) applies to assistance
that a taxpayer receives or becomes entitled
to receive after February 21, 1994 and
repayments of such assistance.
|
|
|
4. (1) Subsection 15(1.2) of the Act is
replaced by the following:
|
|
Forgiveness
of shareholder
debt
|
(1.2) For the purpose of subsection (1), the
value of the benefit where an obligation issued
by a debtor is settled or extinguished at any
time shall be deemed to be the forgiven
amount at that time in respect of the
obligation.
|
|
Forgiven
amount
|
(1.21) For the purpose of subsection (1.2),
the ``forgiven amount'' at any time in respect
of an obligation issued by a debtor has the
meaning that would be assigned by subsection
80(1) if
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2) Subsection (1) applies to taxation
years that end after February 21, 1994.
|
|
|
5. (1) The portion of subsection 18(9.3) of
the Act before paragraph (b) is replaced by
the following:
|
|
Interest on
debt
obligations
|
(9.3) Where at any time in a taxation year of
a borrower a debt obligation of the borrower
is settled or extinguished or the holder of the
obligation acquires or reacquires property of
the borrower in circumstances in which
section 79 applies in respect of the debt
obligation and the total of
|
|
|
|
|
|
(2) Paragraphs 18(9.3)(e) and (f) of the
Act are replaced by the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) The portion of subsection 18(9.3) of
the Act before paragraph (a), as enacted by
subsection (1), and paragraph 18(9.3)(e) of
the Act, as enacted by subsection (2), apply
to the 1992 and subsequent taxation years.
|
|
|
(4) Paragraph 18(9.3)(a) of the Act, as
enacted by subsection (1), and paragraph
18(9.3)(f) of the Act, as enacted by
subsection (2), apply to taxation years that
end after February 21, 1994, except that
they do not apply to any obligation settled
or extinguished
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6. (1) Paragraph 20(1)(n) of the Act is
replaced by the following:
|
|
Reserve for
unpaid
amounts
|
|
|
|
(2) Subsection 20(1) of the Act is amended
by adding the following after paragraph
(hh):
|
|
Repayment of
obligation
|
|
|
|
(3) Subsection 20(1) of the Act is amended
by striking out the word ``and'' at the end of
paragraph (ss), by adding the word ``and''
at the end of paragraph (tt) and by adding
the following after paragraph (tt):
|
|
Debt
forgiveness
|
|
|
|
(4) Subsections (1) and (3) apply to
taxation years that end after February 21,
1994.
|
|
|
(5) Subsection (2) applies to amounts
repaid after February 21, 1994.
|
|
|
7. (1) Paragraph 28(1)(d) of the Act is
replaced by the following:
|
|
|
|
|
|
(2) Paragraph 28(1)(g) of the Act is
replaced by the following:
|
|
|
|
|
|
(3) Subsections (1) and (2) apply to
taxation years that end after February 21,
1994.
|
|
|
8. (1) The portion of subsection 31(1) of
the Act after paragraph (b) is repealed.
|
|
|
(2) Section 31 of the Act is amended by
adding the following after subsection (1):
|
|
Restricted
farm loss
|
(1.1) For the purposes of this Act, a
taxpayer's ``restricted farm loss'' for a
taxation year is the amount, if any, by which
|
|
|
|
|
|
exceeds
|
|
|
|
|
|
(3) Subsections (1) and (2) apply to
taxation years that end after February 21,
1994.
|
|