I-3 - Taxation Act

Section 1029.6.0.1.7 Disposition versions

2021-06-04

1029.6.0.1.7. In determining, for the purposes of this chapter, whether a person or a group of persons controls a corporation, whether persons or partnerships are related to each other or are not dealing with each other at arm’s length, whether a corporation or a partnership is associated with another corporation or partnership or whether a corporation is exempt from tax, the following rules apply:

(a)  a partnership is deemed, at a particular time, to be a corporation whose taxation year corresponds to the partnership’s fiscal period and all the voting shares in the capital stock of which are owned at that time by each member of the partnership in a proportion equal to the agreed proportion in respect of the member for the partnership’s fiscal period that includes that time; and

(b)  a trust is deemed, at a particular time, to be a corporation all the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries (in this paragraph referred to as the “distribution date”) and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  are owned at that time by such a beneficiary, if that beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and if that time occurs before the distribution date, or

(2)  are owned at that time by such a beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries, if subparagraph 1 does not apply and that time occurs before the distribution date,

ii.  if a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, unless subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, unless subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to in that section from whom property of the trust or property for which property of the trust was substituted was directly or indirectly received.

2004, c. 21, s. 255; 2009, c. 15, s. 195; 2015, c. 36, s. 77; 2021, c. 14, s. 123; 2021, c. 18, s. 97.

2021-06-02

1029.6.0.1.7. In determining, for the purposes of this chapter, whether a person or a group of persons controls a corporation, whether persons or partnerships are not dealing with each other at arm’s length, whether a corporation or a partnership is associated with another corporation or partnership or whether a corporation is exempt from tax, the following rules apply:

(a)  a partnership is deemed, at a particular time, to be a corporation whose taxation year corresponds to the partnership’s fiscal period and all the voting shares in the capital stock of which are owned at that time by each member of the partnership in a proportion equal to the agreed proportion in respect of the member for the partnership’s fiscal period that includes that time; and

(b)  a trust is deemed, at a particular time, to be a corporation all the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries (in this paragraph referred to as the “distribution date”) and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  are owned at that time by such a beneficiary, if that beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and if that time occurs before the distribution date, or

(2)  are owned at that time by such a beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries, if subparagraph 1 does not apply and that time occurs before the distribution date,

ii.  if a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, unless subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, unless subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to in that section from whom property of the trust or property for which property of the trust was substituted was directly or indirectly received.

2004, c. 21, s. 255; 2009, c. 15, s. 195; 2015, c. 36, s. 77; 2021, c. 14, s. 123.

2015-12-04

1029.6.0.1.7. For the purposes of this chapter, the following rules apply:

(a)  a partnership is deemed, at a particular time, to be a corporation whose taxation year corresponds to the partnership’s fiscal period and all the voting shares in the capital stock of which are owned at that time by each member of the partnership in a proportion equal to the agreed proportion in respect of the member for the partnership’s fiscal period that includes that time; and

(b)  a trust is deemed, at a particular time, to be a corporation all the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries (in this paragraph referred to as the “distribution date”) and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  are owned at that time by such a beneficiary, if that beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, and if that time occurs before the distribution date, or

(2)  are owned at that time by such a beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries, if subparagraph 1 does not apply and that time occurs before the distribution date,

ii.  if a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a power to appoint, are owned at that time by the beneficiary, unless subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, unless subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to in that section from whom property of the trust or property for which property of the trust was substituted was directly or indirectly received.

2004, c. 21, s. 255; 2009, c. 15, s. 195; 2015, c. 36, s. 77.

2009-06-04

1029.6.0.1.7. For the purpose of determining whether a particular corporation is deemed to have paid an amount to the Minister under this chapter for a taxation year, the following rules apply:

(a)  the shares of the capital stock of the particular corporation that are owned or deemed under this section to be owned by a partnership, at any time, are deemed to be owned, at that time, by each member of the partnership in a proportion equal to the agreed proportion in respect of the member for the partnership’s fiscal period that includes that time;

(b)  the particular corporation is deemed to be controlled by members of the partnership referred to in paragraph a that form a particular group at any time, where more than 50% of the voting shares of the particular corporation’s capital stock are deemed, under that paragraph a, to be owned by the members of that group at that time;

(c)  if, at any time, a partnership has any direct or indirect influence that, if exercised, would result in control in fact of the particular corporation, the partnership is deemed to be a corporation whose taxation year corresponds to the partnership’s fiscal period and all the voting shares in the capital stock of which are owned at that time by each member of the partnership in a proportion equal to the agreed proportion in respect of the member for the partnership’s fiscal period that includes that time; and

(d)  the partnership that is deemed to be a corporation under paragraph c is deemed to be controlled by persons that form a particular group at any time where more than 50% of the voting shares of the partnership’s capital stock are deemed, under that paragraph c, to be owned by the members of that group at that time.

2004, c. 21, s. 255; 2009, c. 15, s. 195.

2006-03-01

1029.6.0.1.7. For the purpose of determining whether a particular corporation is deemed to have paid an amount to the Minister under this chapter for a taxation year, the following rules apply:

(a)  the shares of the capital stock of the particular corporation that are owned or deemed under this section to be owned by a partnership, at any time, are deemed to be owned, at that time, by each member of the partnership in a proportion equal to the proportion of the shares that the member’s share of the partnership’s income or loss for the partnership’s fiscal period that includes that time is of the partnership’s income or loss for the partnership’s fiscal period that includes that time, on the assumption that, if the partnership’s income and loss for that fiscal period are nil, the partnership’s income for that fiscal period is $1,000,000;

(b)  the particular corporation is deemed to be controlled by members of the partnership referred to in paragraph a that form a particular group at any time, where more than 50% of the voting shares of the particular corporation’s capital stock are deemed, under that paragraph a, to be owned by the members of that group at that time;

(c)  where, at any time, a partnership has any direct or indirect influence that, if exercised, would result in control in fact of the particular corporation, the partnership is deemed to be a corporation whose taxation year corresponds to the partnership’s fiscal period and in respect of which the aggregate of the voting shares of its capital stock belong to each member of the partnership, at that time, in the proportion that the member’s share of the partnership’s income or loss for the partnership’s fiscal period that includes that time is of the partnership’s income or loss for the partnership’s fiscal period that includes that time, on the assumption that, if the partnership’s income and loss for that fiscal period are nil, the partnership’s income for that fiscal period is $1,000,000; and

(d)  the partnership that is deemed to be a corporation under paragraph c is deemed to be controlled by persons that form a particular group at any time where more than 50% of the voting shares of the partnership’s capital stock are deemed, under that paragraph c, to be owned by the members of that group at that time.

2004, c. 21, s. 255.