I-3 - Taxation Act

Section 766.3.3.1 Disposition versions

2020-09-24

766.3.3.1. For the purpose of applying this division in respect of a specified individual for a taxation year, the following rules apply:

(a)  an individual is deemed to be actively engaged on a regular, continuous and substantial basis in the activities of a business in a taxation year if the individual works for the business at least 20 hours per week during the portion of the year in which the business operates;

(b)  where an amount would, but for this paragraph, be split income of a specified individual who has attained the age of 17 years before the taxation year in respect of a property, and that property was acquired by, or for the benefit of, the specified individual as a consequence of the death of another person, the following rules apply:

i.  for the purpose of applying paragraph b of the definition of “reasonable return” in the first paragraph of section 766.3.3 and to the extent that the particular amount referred to in that paragraph is in respect of the property, the factors referred to in that paragraph in respect of the other person are to be included for the purpose of determining a reasonable return in respect of the individual,

ii.  for the purposes of this subparagraph and the definition of “excluded business” in the first paragraph of section 766.3.3, where the other person was actively engaged on a regular, continuous and substantial basis in the activities of a business throughout five previous taxation years, the individual is deemed to have been actively engaged on a regular, continuous and substantial basis in the activities of the business throughout those five years, and

iii.  for the purpose of applying paragraph g of the definition of “excluded amount” in the first paragraph of section 766.3.3 in respect of that property, the individual is deemed to have attained the age of 24 years before the year if the other person had attained the age of 24 years before the year;

(c)  an amount that is a specified individual’s income for a taxation year from, or the specified individual’s taxable capital gain or profit for the year from the disposition of, a property is deemed to be an excluded amount in respect of the specified individual for the year if

i.  the following conditions are met:

(1)  the amount would be an excluded amount in respect of the individual’s spouse for the year, if the amount were included in computing the spouse’s income for the year, and

(2)  the individual’s spouse has attained the age of 64 years before the year, or

ii.  the amount would have been an excluded amount in respect of an individual who was, immediately before the individual’s death, the specified individual’s spouse, if the amount were included in computing the spouse’s income for the spouse’s last taxation year (determined as if this division applies in respect of that year);

(d)  an amount derived directly or indirectly from a business includes

i.  an amount that is derived from the provision of property or services to, or in support of, the business, or arises in connection with the ownership or disposition of an interest in the person or partnership carrying on the business, and

ii.  an amount derived from an amount described in this paragraph; and

(e)  an individual is deemed not to be related to the individual’s spouse at any time in a year if, at the end of the year, the individual is living separate and apart from the individual’s spouse because of a breakdown of their marriage.

2020, c. 16, s. 110.