I-3 - Taxation Act

Section 1122 Disposition versions

2006-03-01

1122. A non-resident owned investment corporation is a corporation incorporated in Canada which, throughout the period comprised between 18 June 1971 or the date of its incorporation, if the latter date is later than the first, and the last day of the taxation year for which the expression is relevant, has met the following requirements:

(a)  the aggregate of its issued shares, bonds, debentures and other long-term liabilities

i.  belonged to persons not resident in Canada other than a foreign affiliate of a taxpayer resident in Canada,

ii.  belonged to a trustee who held them for a beneficiary not resident in Canada or for a child to be born to such beneficiary, or

iii.  belonged to another non-resident owned investment corporation whose issued shares, bonds, debentures and other long-term liabilities were those described in subparagraphs i and ii or belonged to two or more corporations of that kind;

(b)  its income, for each taxation year of the period, was derived from

i.  the ownership of or trading in bonds, shares, debentures, bills, notes, hypothecary claims, mortgages or other similar property, or an interest therein,

ii.  lending money, with or without security,

iii.  rents, the leasing of movable property, fees or remuneration from charter-parties, annuities, royalties, interest or dividends,

iv.  a succession or a trust, or

v.  the disposition of capital property;

(c)  not more than 10 per cent of its gross revenue, for each taxation year of the period, was derived from rents, the rental of movable property, fees or remuneration from charter-parties; and

(d)  its principal business did not consist, for each taxation year of the period, in lending money or trading in the property contemplated in subparagraph i of paragraph b or of an interest therein.

1972, c. 23, s. 837; 1996, c. 39, s. 268; 1997, c. 3, s. 71; 1997, c. 14, s. 262; 1998, c. 16, s. 251; 2005, c. 1, s. 281.