I-3 - Taxation Act

Section 1104 Disposition versions

2017-02-08

1104. For the purposes of this Book, a corporation is an investment corporation throughout any taxation year in respect of which the expression is being applied if it complies with the following conditions:

(a)  it was throughout the year a Canadian corporation that was a public corporation;

(b)  not less than 80% of its property throughout the year consisted of shares, bonds, marketable securities or cash;

(c)  not less than 95% of its income, determined without reference to section 295, for the year was derived from, or from dispositions of, property described in paragraph b;

(d)  not less than 85% of its gross revenue for the year was from sources in Canada;

(e)  not more than 25% of its gross revenue for the year was from interest;

(f)  at no time in the year did more than 10% of its property consist of shares, bonds or other securities of any one corporation or debtor other than the State or Her Majesty in right of Canada or a province, within the meaning of section 1, other than Québec, or other than a Canadian municipality;

(g)  no person would have been a specified shareholder of the corporation in the year if

i.  section 21.17 were read as if “not less than 10%” were replaced by “more than 25%” and without reference to “of any other corporation that is related to the corporation”,

ii.  paragraph a of section 21.18 were read as if “with whom the taxpayer does not deal at arm’s length” were replaced by “related to the taxpayer”,

iii.  section 21.18 were read without reference to paragraph d of that section, and

iv.  paragraph a of subsection 1 of section 19 were read as follows:

“(a) an individual and

i. the individual’s child, as defined in subparagraph d of the first paragraph of section 451, who is under 19 years of age, or

ii. the individual’s spouse;”; and

(h)  an amount of not less than 85% of the aggregate determined under section 1105, less any dividends or interest received by it in the form of shares, bonds or other securities that had not been sold before the end of the year, was distributed to its shareholders before the end of the year and otherwise than by way of a capital gains dividend.

1972, c. 23, s. 828; 1973, c. 17, s. 130; 1973, c. 18, s. 32; 1976, c. 18, s. 19; 1980, c. 13, s. 107; 1982, c. 5, s. 202; 1993, c. 16, s. 349; 1996, c. 39, s. 273; 1997, c. 3, s. 71; 1998, c. 16, s. 251; 2001, c. 7, s. 161; 2017, c. 1, s. 372.

2006-03-01

1104. For the purposes of this Book, a corporation is an investment corporation throughout any taxation year in respect of which the expression is being applied if it complies with the following conditions:

(a)  it was throughout the year a Canadian corporation that was a public corporation;

(b)  not less than 80% of its property throughout the year consisted of shares, bonds, marketable securities or cash;

(c)  not less than 95% of its income, determined without reference to section 295, for the year was derived from, or from dispositions of, property described in paragraph b;

(d)  not less than 85% of its gross revenue for the year was from sources in Canada;

(e)  not more than 25% of its gross revenue for the year was from interest;

(f)  at no time in the year did more than 10% of its property consist of shares, bonds or other securities of any one corporation or debtor other than the State or Her Majesty in right of Canada or a province, within the meaning of section 1, other than Québec, or other than a Canadian municipality;

(g)  no person would have been a specified shareholder of the corporation in the year if

i.  section 21.17 were read with “not less than 10%” replaced by “more than 25%” and without reference to the words “of any other corporation that is related to the corporation”,

ii.  paragraph a of section 21.18 were read with the words “with whom the taxpayer does not deal at arm’s length” replaced by the words “related to the taxpayer”,

iii.  section 21.18 were read without reference to paragraph d of that section, and

iv.  paragraph a of subsection 1 of section 19 were read as follows:

“(a) an individual and

i. the individual’s child, as defined in subparagraph d of the first paragraph of section 451, who is under 19 years of age, or

ii. the individual’s spouse;”;

(h)  an amount of not less than 85% of the aggregate determined under section 1105, less any dividends or interest received by it in the form of shares, bonds or other securities that had not been sold before the end of the year, was distributed to its shareholders before the end of the year and otherwise than by way of a capital gains dividend.

1972, c. 23, s. 828; 1973, c. 17, s. 130; 1973, c. 18, s. 32; 1976, c. 18, s. 19; 1980, c. 13, s. 107; 1982, c. 5, s. 202; 1993, c. 16, s. 349; 1996, c. 39, s. 273; 1997, c. 3, s. 71; 1998, c. 16, s. 251; 2001, c. 7, s. 161.