I-3 - Taxation Act

Section 852 Disposition versions

2006-03-01

852. In this Title,

“unused portion of the exempt capital gains balance” of a beneficiary in respect of a trust governed by a profit sharing plan, at any time in a taxation year of the beneficiary, means

(a)  if the year ends before 1 January 2005, the amount by which the beneficiary’s exempt capital gains balance, within the meaning of section 251.1, in respect of the trust for the year exceeds the aggregate of all amounts each of which is an amount by which a capital gain is reduced under Chapter II.1 of Title IV of Book III for the year because of the beneficiary’s exempt capital gains balance in respect of the trust; or

(b)  if the year ends after 31 December 2004, the amount by which the amount that would, if the definition of “exempt capital gains balance” in the first paragraph of section 251.1 were read without reference to “that ends before 1 January 2005”, be the beneficiary’s exempt capital gains balance in respect of the trust for the year, exceeds

i.  where there has been a disposition of an interest or a part of an interest of the beneficiary in the trust after the beneficiary’s taxation year 2004, other than a disposition that is a part of a transaction described in paragraph c of section 858 in which property is received as consideration for all or a portion of the beneficiary’s interests in the trust, the aggregate of all amounts each of which is an amount by which the adjusted cost base of an interest or a part of an interest disposed of by the beneficiary, other than an interest or a part of an interest that is all or a portion of the beneficiary’s interests referred to in paragraph c of section 858, was increased because of paragraph c.4 of section 255, and

ii.  in any other case, nil;

“profit sharing plan” at a particular time means an arrangement

(a)  under which payments computed by reference to an employer’s profits from the employer’s business, the profits from the business of a corporation with which the employer does not deal at arm’s length or the profits from the business of the employer and of any such corporation, are required to be made by the employer to a trustee under the arrangement for the benefit of employees of the employer or of a corporation with which the employer does not deal at arm’s length; and

(b)  in respect of which the trustee has, since the later of the beginning of the arrangement and the end of 1949, allocated, either contingently or absolutely, to those employees

i.  in each year that ended at or before the particular time, all amounts received in the year by the trustee from the employer or from a corporation with which the employer does not deal at arm’s length,

ii.  in each year ending at or before the particular time, all profits for the year from the property of the trust, determined without regard to any capital gain made by the trust or capital loss sustained by it at any time after 31 December 1955,

iii.  in each year that ended after 31 December 1971 and at or before the particular time, all capital gains and capital losses of the trust for the year,

iv.  in each year that ended after 31 December 1971, before 1 January 1993 and at or before the particular time, 100/15 of the aggregate of all amounts each of which is deemed by section 864 to have been paid on account of tax under this Part in respect of an employee because the employee ceased to be a beneficiary under the plan in the year, and

v.  in each year that ended after 31 December 1991 and at or before the particular time, the aggregate of all amounts each of which is an amount that an employee is entitled to deduct under section 864 in computing his income because the employee ceased to be a beneficiary under the plan in the year.

1972, c. 23, s. 640; 1991, c. 25, s. 176; 1993, c. 19, s. 71; 1995, c. 49, s. 189; 1997, c. 3, s. 71; 2000, c. 5, s. 188.