I-3 - Taxation Act

Section 766.3.3 Disposition versions

2021-06-04

766.3.3. In this division,

“arm’s length capital”, of a specified individual, means property of the individual if the property, or property for which it is a substitute, was not

(a)  acquired as income from, or a taxable capital gain or profit from the disposition of, another property that was derived directly or indirectly from a related business in respect of the specified individual;

(b)  borrowed by the specified individual under a loan or other indebtedness; or

(c)  transferred, directly or indirectly by any means whatever, to the specified individual from a person who was related to the specified individual (other than as a consequence of the death of the person);

“excluded amount”, in respect of an individual for a taxation year, means an amount that is the individual’s income for the year from, or the individual’s taxable capital gain or profit for the year from the disposition of, a property to the extent that the amount

(a)  where the individual has not attained the age of 24 years before the year, is from a property that was acquired by, or for the benefit of, the individual as a consequence of the death of a person who is

i.  the individual’s father or mother, or

ii.  any other person, if the individual is enrolled as a full-time student during the year at a prescribed educational institution for the purposes of paragraph d of the definition of “trust” in section 890.15, or an individual in respect of whom subparagraphs a to c of the first paragraph of section 752.0.14 apply for the year;

(b)  is from a property acquired by the individual under a transfer described in section 1034.0.1;

(c)  is a taxable capital gain that arises because of section 436;

(d)  is a taxable capital gain for the year from the disposition by the individual of property that is, at the time of the disposition, qualified farm or fishing property, within the meaning of section 726.6, or qualified small business corporation shares, within the meaning of section 726.6.1, unless the amount would be deemed to be a dividend under section 766.3.5 or 766.3.6 if this definition were read without reference to this paragraph;

(e)  where the individual has attained the age of 17 years before the year, is

i.  not derived directly or indirectly from a related business in respect of the individual for the year, or

ii.  derived directly or indirectly from an excluded business of the individual for the year;

(f)  where the individual has attained the age of 17 years but not the age of 24 years before the year, is

i.  a safe harbour capital return of the individual, or

ii.  a reasonable return in respect of the individual, having regard only to the contributions of arm’s length capital by the individual; or

(g)  where the individual has attained the age of 24 years before the year, is

i.  income from, or a taxable capital gain from the disposition of, excluded shares of the individual, or

ii.  a reasonable return in respect of the individual;

“excluded business”, of a specified individual for a taxation year, means a business if the specified individual is actively engaged on a regular, continuous and substantial basis in the activities of the business in either

(a)  the taxation year, except in respect of an amount described in paragraph e of the definition of “split income”; or

(b)  any five prior taxation years of the specified individual;

“excluded shares”, of a specified individual at a particular time, means shares of the capital stock of a corporation owned by the specified individual if the following conditions are met:

(a)  less than 90% of the business income of the corporation for the last taxation year of the corporation that ends at or before the particular time (or, if the corporation has no such taxation year, for the taxation year of the corporation that includes the particular time) was from the provision of services;

(b)  the corporation is not a professional corporation;

(c)  immediately before the particular time, the specified individual owns shares of the capital stock of the corporation that

i.  give the holders thereof 10% or more of the votes that could be cast at the annual meeting of the shareholders of the corporation, and

ii.  have a fair market value of 10% or more of the fair market value of all of the issued and outstanding shares of the capital stock of the corporation; and

(d)  all or substantially all of the income of the corporation for the relevant taxation year in paragraph a is income that is not derived, directly or indirectly, from one or more related businesses in respect of the specified individual other than a business of the corporation;

“reasonable return”, in respect of a specified individual for a taxation year, means a particular amount derived directly or indirectly from a related business in respect of the specified individual that

(a)  would be an amount described in the definition of “split income” in respect of the specified individual for the year if the definition of “excluded amount” were read without reference to subparagraph ii of paragraphs f and g; and

(b)  is reasonable having regard to the following factors relating to the relative contributions of the specified individual, and each source individual in respect of the specified individual, in respect of the related business:

i.  the work they performed in support of the related business,

ii.  the property they contributed, directly or indirectly, in support of the related business,

iii.  the risks they assumed in respect of the related business,

iv.  the total of all amounts that were paid or that became payable, directly or indirectly, by any person or partnership to, or for the benefit of, them in respect of the related business, and

v.  such other factors as may be relevant;

“related business”, in respect of a specified individual for a taxation year, means

(a)  a business carried on by

i.  a source individual in respect of the specified individual at any time in the year, or

ii.  a corporation, partnership or trust if a source individual in respect of the specified individual at any time in the year is actively engaged on a regular basis in the activities of the corporation, partnership or trust, as the case may be, related to earning income from the business;

(b)  a business of a particular partnership, if a source individual in respect of the specified individual at any time in the year has an interest—including directly or indirectly—in the particular partnership; or

(c)  a business of a corporation, if the following conditions are met at any time in the year:

i.  a source individual in respect of the specified individual owns

(1)  shares of the capital stock of the corporation, or

(2)  property that derives, directly or indirectly, all or part of its fair market value from shares of the capital stock of the corporation, and

ii.  the amount that is 10% of the total fair market value of all of the issued and outstanding shares of the capital stock of the corporation is equal to or less than the aggregate of

(1)  the total fair market value of shares described in subparagraph 1 of subparagraph i, and

(2)  the portion of the total fair market value of property described in subparagraph 2 of subparagraph i that is derived from shares of the capital stock of the corporation;

“safe harbour capital return”,of a specified individual for a taxation year, means an amount that does not exceed the product obtained by multiplying the amount that is the highest of the rates that are determined in accordance with paragraph c of section 4301 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) in effect for a quarter in the year by the aggregate of all amounts each of which is determined by the formula

A × B / C;

“source individual”, in respect of a specified individual for a taxation year, means an individual (other than a trust) who, at any time in the year, is resident in Canada and is related to the specified individual;

“specified individual”, for a taxation year, means an individual (other than a trust) who meets the following conditions:

(a)  the individual is resident in Canada at the end of the year or, if the individual dies in the year, is resident in Canada immediately before the death; and

(b)  if the individual has not attained the age of 17 years before the year, the individual’s father or mother is resident in Canada in the year;

“split income” of a specified individual for a taxation year means the aggregate of all amounts, other than excluded amounts, each of which is

(a)  an amount required to be included in computing the individual’s income for the year in respect of taxable dividends received by the individual in respect of shares of the capital stock of a corporation, other than shares listed on a designated stock exchange or shares of a mutual fund corporation, or because of the application of Division IV of Chapter II of Title III of Book III in respect of the ownership by any person of shares of the capital stock of a corporation, other than shares listed on such a stock exchange;

(b)  a portion of an amount included because of the application of paragraph f of section 600 in computing the individual’s income for the year, to the extent that the portion is not included in an amount described in paragraph a and can reasonably be considered to be income derived directly or indirectly from

i.  one or more related businesses in respect of the individual for the year, or

ii.  the rental of property by a partnership or trust, if a person who is related to the individual at any time in the year is actively engaged on a regular basis in the activities of the partnership or trust related to the rental of property or, in the case of a partnership, has an interest in the partnership directly or indirectly through one or more other partnerships;

(c)  a portion of an amount included because of the application of section 662 or 663 in respect of a trust (other than a mutual fund trust or a trust referred to in section 851.25) in computing the individual’s income for the year, to the extent that the portion is not included in an amount described in paragraph a and can reasonably be considered

i.  to be in respect of taxable dividends received in respect of shares of the capital stock of a corporation (other than shares listed on a designated stock exchange or shares of a mutual fund corporation),

ii.  to arise because of the application of Division IV of Chapter II of Title III of Book III in respect of the ownership by any person of shares of the capital stock of a corporation (other than shares listed on a designated stock exchange),

iii.  to be income derived directly or indirectly from one or more related businesses in respect of the individual for the year, or

iv.  to be income derived from the rental of property by a partnership or trust, if a person who is related to the individual at any time in the year is actively engaged on a regular basis in the activities of the partnership or trust related to the rental of property;

(d)  an amount included in computing the individual’s income for the year to the extent that the amount is in respect of a debt obligation that

i.  is of a corporation (other than a mutual fund corporation or a corporation a class of shares of the capital stock of which is listed on a designated stock exchange), partnership or trust (other than a mutual fund trust), and

ii.  is not described in paragraph a of the definition of “fully exempt interest” in subsection 3 of section 212 of the Income Tax Act, listed or traded on a public market, or a deposit, standing to the credit of the individual,

(1)  within the meaning assigned by the Canada Deposit Insurance Corporation Act (R.S.C. 1985, c. 3), or

(2)  with a credit union or a branch in Canada of a bank; or

(e)  an amount in respect of a property, to the extent that

i.  the amount

(1)  is a taxable capital gain, or a profit, of the individual for the year from the disposition after 31 December 2017 of the property, or

(2)  is included under section 662 or 663 in computing the individual’s income for the year and can reasonably be considered to be attributable to a taxable capital gain, or a profit, of any person or partnership for the year from the disposition after 31 December 2017 of the property, and

ii.  the property is

(1)  a share of the capital stock of a corporation (other than a share of a class listed on a designated stock exchange or a share of the capital stock of a mutual fund corporation), or

(2)  a property in respect of which the conditions of the third paragraph are met.

(a)  the property is an interest in a partnership, an interest as a beneficiary under a trust (other than a mutual fund trust or a trust described in section 851.25, or a debt obligation (other than a debt obligation described in subparagraph ii of paragraph d), and

(b)  either an amount is included, in respect of the property, in the individual’s split income for the year or an earlier taxation year, or all or any part of the fair market value of the property, immediately before the disposition referred to in subparagraph 1 or 2 of subparagraph i, is derived, directly or indirectly, from a share described in subparagraph 1.

In the formula in the definition of “safe harbour capital return” in the first paragraph,

(a)  A is the fair market value of property contributed by the specified individual in support of a related business at the time it was contributed;

(b)  B is the number of days in the year that the property (or property substituted for it) is used in support of the related business and has not directly or indirectly, in any manner whatever, been returned to the specified individual; and

(c)  C is the number of days in the year.

The conditions to which subparagraph 2 of subparagraph ii of paragraph e of the definition of “split income” in the first paragraph refers in respect of a property are as follows:

(a)  the property is an interest in a partnership, an interest as a beneficiary under a trust (other than a mutual fund trust or a trust described in section 851.25) or a debt obligation (other than a debt obligation described in subparagraph ii of paragraph d of the definition of “split income”); and

(b)  either an amount is included, in respect of the property, in the individual’s split income for the year or an earlier taxation year, or all or any part of the fair market value of the property, immediately before the disposition referred to in subparagraph 1 or 2 of subparagraph i of paragraph e of the definition of “split income”, is derived, directly or indirectly, from a share described in subparagraph 1 of subparagraph ii of that paragraph e.

2015, c. 21, s. 306; 2017, c. 29, s. 154; 2020, c. 16, s. 109; 2021, c. 18, s. 63.

2020-09-24

766.3.3. In this division,

“arm’s length capital”, of a specified individual, means property of the individual if the property, or property for which it is a substitute, was not

(a)  acquired as income from, or a taxable capital gain or profit from the disposition of, another property that was derived directly or indirectly from a related business in respect of the specified individual;

(b)  borrowed by the specified individual under a loan or other indebtedness; or

(c)  transferred, directly or indirectly by any means whatever, to the specified individual from a person who was related to the specified individual (other than as a consequence of the death of the person);

“excluded amount”, in respect of an individual for a taxation year, means an amount that is the individual’s income for the year from, or the individual’s taxable capital gain or profit for the year from the disposition of, a property to the extent that the amount

(a)  where the individual has not attained the age of 24 years before the year, is from a property that was acquired by, or for the benefit of, the individual as a consequence of the death of a person who is

i.  the individual’s father or mother, or

ii.  any other person, if the individual is enrolled as a full-time student during the year at a prescribed educational institution for the purposes of paragraph d of the definition of “trust” in section 890.15, or an individual in respect of whom subparagraphs a to c of the first paragraph of section 752.0.14 apply for the year;

(b)  is from a property acquired by the individual under a transfer described in section 1034.0.1;

(c)  is a taxable capital gain that arises because of section 436;

(d)  is a taxable capital gain for the year from the disposition by the individual of property that is, at the time of the disposition, qualified farm or fishing property, within the meaning of section 726.6, or qualified small business corporation shares, within the meaning of section 726.6.1, unless the amount would be deemed to be a dividend under section 766.3.5 or 766.3.6 if this definition were read without reference to this paragraph;

(e)  where the individual has attained the age of 17 years before the year, is

i.  not derived directly or indirectly from a related business in respect of the individual for the year, or

ii.  derived directly or indirectly from an excluded business of the individual for the year;

(f)  where the individual has attained the age of 17 years but not the age of 24 years before the year, is

i.  a safe harbour capital return of the individual, or

ii.  a reasonable return in respect of the individual, having regard only to the contributions of arm’s length capital by the individual; or

(g)  where the individual has attained the age of 24 years before the year, is

i.  income from, or a taxable capital gain from the disposition of, excluded shares of the individual, or

ii.  a reasonable return in respect of the individual;

“excluded business”, of a specified individual for a taxation year, means a business if the specified individual is actively engaged on a regular, continuous and substantial basis in the activities of the business in either

(a)  the taxation year, except in respect of an amount described in paragraph e of the definition of “split income”; or

(b)  any five prior taxation years of the specified individual;

“excluded shares”, of a specified individual at a particular time, means shares of the capital stock of a corporation owned by the specified individual if the following conditions are met:

(a)  less than 90% of the business income of the corporation for the last taxation year of the corporation that ends at or before the particular time (or, if the corporation has no such taxation year, for the taxation year of the corporation that includes the particular time) was from the provision of services;

(b)  the corporation is not a professional corporation;

(c)  immediately before the particular time, the specified individual owns shares of the capital stock of the corporation that

i.  give the holders thereof 10% or more of the votes that could be cast at the annual meeting of the shareholders of the corporation, and

ii.  have a fair market value of 10% or more of the fair market value of all of the issued and outstanding shares of the capital stock of the corporation; and

(d)  all or substantially all of the income of the corporation for the relevant taxation year in paragraph a is income that is not derived, directly or indirectly, from one or more related businesses in respect of the specified individual other than a business of the corporation;

“reasonable return”, in respect of a specified individual for a taxation year, means a particular amount derived directly or indirectly from a related business in respect of the specified individual that

(a)  would be an amount described in the definition of “split income” in respect of the specified individual for the year if the definition of “excluded amount” were read without reference to subparagraph ii of paragraphs f and g; and

(b)  is reasonable having regard to the following factors relating to the relative contributions of the specified individual, and each source individual in respect of the specified individual, in respect of the related business:

i.  the work they performed in support of the related business,

ii.  the property they contributed, directly or indirectly, in support of the related business,

iii.  the risks they assumed in respect of the related business,

iv.  the total of all amounts that were paid or that became payable, directly or indirectly, by any person or partnership to, or for the benefit of, them in respect of the related business, and

v.  such other factors as may be relevant;

“related business”, in respect of a specified individual for a taxation year, means

(a)  a business carried on by

i.  a source individual in respect of the specified individual at any time in the year, or

ii.  a corporation, partnership or trust if a source individual in respect of the specified individual at any time in the year is actively engaged on a regular basis in the activities of the corporation, partnership or trust, as the case may be, related to earning income from the business;

(b)  a business of a particular partnership, if a source individual in respect of the specified individual at any time in the year has an interest—including directly or indirectly—in the particular partnership; or

(c)  a business of a corporation, if the following conditions are met at any time in the year:

i.  a source individual in respect of the specified individual owns

(1)  shares of the capital stock of the corporation, or

(2)  property that derives, directly or indirectly, all or part of its fair market value from shares of the capital stock of the corporation, and

ii.  the amount that is 10% of the total fair market value of all of the issued and outstanding shares of the capital stock of the corporation is equal to or less than the aggregate of

(1)  the total fair market value of shares described in subparagraph 1 of subparagraph i, and

(2)  the portion of the total fair market value of property described in subparagraph 2 of subparagraph i that is derived from shares of the capital stock of the corporation;

“safe harbour capital return”,of a specified individual for a taxation year, means an amount that does not exceed the product obtained by multiplying the amount that is the highest of the rates that are determined in accordance with paragraph c of section 4301 of the Income Tax Regulations made under the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) in effect for a quarter in the year by the aggregate of all amounts each of which is determined by the formula

A × B / C;

“source individual”, in respect of a specified individual for a taxation year, means an individual (other than a trust) who, at any time in the year, is resident in Canada and is related to the specified individual;

“specified individual”, for a taxation year, means an individual (other than a trust) who meets the following conditions:

(a)  the individual is resident in Canada at the end of the year or, if the individual dies in the year, is resident in Canada immediately before the death; and

(b)  if the individual has not attained the age of 17 years before the year, the individual’s father or mother is resident in Canada in the year;

“split income” of a specified individual for a taxation year means the aggregate of all amounts, other than excluded amounts, each of which is

(a)  an amount required to be included in computing the individual’s income for the year in respect of taxable dividends received by the individual in respect of shares of the capital stock of a corporation, other than shares listed on a designated stock exchange or shares of a mutual fund corporation, or because of the application of Division IV of Chapter II of Title III of Book III in respect of the ownership by any person of shares of the capital stock of a corporation, other than shares listed on such a stock exchange;

(b)  a portion of an amount included because of the application of paragraph f of section 600 in computing the individual’s income for the year, to the extent that the portion is not included in an amount described in paragraph a and can reasonably be considered to be income derived directly or indirectly from

i.  one or more related businesses in respect of the individual for the year, or

ii.  the rental of property by a partnership or trust, if a person who is related to the individual at any time in the year is actively engaged on a regular basis in the activities of the partnership or trust related to the rental of property or, in the case of a partnership, has an interest in the partnership directly or indirectly through one or more other partnerships;

(c)  a portion of an amount included because of the application of section 662 or 663 in respect of a trust (other than a mutual fund trust or a trust referred to in section 851.25) in computing the individual’s income for the year, to the extent that the portion is not included in an amount described in paragraph a and can reasonably be considered

i.  to be in respect of taxable dividends received in respect of shares of the capital stock of a corporation (other than shares listed on a designated stock exchange or shares of a mutual fund corporation),

ii.  to arise because of the application of Division IV of Chapter II of Title III of Book III in respect of the ownership by any person of shares of the capital stock of a corporation (other than shares listed on a designated stock exchange),

iii.  to be income derived directly or indirectly from one or more related businesses in respect of the individual for the year, or

iv.  to be income derived from the rental of property by a partnership or trust, if a person who is related to the individual at any time in the year is actively engaged on a regular basis in the activities of the partnership or trust related to the rental of property;

(d)  an amount included in computing the individual’s income for the year to the extent that the amount is in respect of a debt obligation that

i.  is of a corporation (other than a mutual fund corporation or a corporation a class of shares of the capital stock of which is listed on a designated stock exchange), partnership or trust (other than a mutual fund trust), and

ii.  is not described in paragraph a of the definition of “fully exempt interest” in subsection 3 of section 212 of the Income Tax Act, listed or traded on a public market, or a deposit, standing to the credit of the individual,

(1)  within the meaning assigned by the Canada Deposit Insurance Corporation Act (R.S.C. 1985, c. 3), or

(2)  with a credit union or a branch in Canada of a bank; or

(e)  an amount in respect of a property, to the extent that

i.  the amount

(1)  is a taxable capital gain, or a profit, of the individual for the year from the disposition after 31 December 2017 of the property, or

(2)  is included under section 662 or 663 in computing the individual’s income for the year and can reasonably be considered to be attributable to a taxable capital gain, or a profit, of any person or partnership for the year from the disposition after 31 December 2017 of the property, and

ii.  the property is

(1)  a share of the capital stock of a corporation (other than a share of a class listed on a designated stock exchange or a share of the capital stock of a mutual fund corporation), or

(2)  a property in respect of which the following conditions are met:

(a)  the property is an interest in a partnership, an interest as a beneficiary under a trust (other than a mutual fund trust or a trust described in section 851.25, or a debt obligation (other than a debt obligation described in subparagraph ii of paragraph d), and

(b)  either an amount is included, in respect of the property, in the individual’s split income for the year or an earlier taxation year, or all or any part of the fair market value of the property, immediately before the disposition referred to in subparagraph 1 or 2 of subparagraph i, is derived, directly or indirectly, from a share described in subparagraph 1.

In the formula in the definition of “safe harbour capital return” in the first paragraph,

(a)  A is the fair market value of property contributed by the specified individual in support of a related business at the time it was contributed;

(b)  B is the number of days in the year that the property (or property substituted for it) is used in support of the related business and has not directly or indirectly, in any manner whatever, been returned to the specified individual; and

(c)  C is the number of days in the year.

2015, c. 21, s. 306; 2017, c. 29, s. 154; 2020, c. 16, s. 109.

2017-12-07

766.3.3. In this division,

“excluded amount”, in respect of an individual for a taxation year, means an amount that is an income from, or the taxable capital gain from the disposition of, a property acquired by or for the benefit of the individual as a consequence of the death of

(a)  the individual’s father or mother; or

(b)  any other person, if the individual is enrolled as a full-time student during the year at a prescribed educational institution for the purposes of paragraph d of the definition of “trust” in section 890.15, or an individual in respect of whom subparagraphs a to c of the first paragraph of section 752.0.14 apply for the year;

“specified individual”, in relation to a taxation year, means an individual

(a)  who had not attained the age of 17 years before the year;

(b)  who was resident in Canada throughout the year; and

(c)  whose father or mother was resident in Canada in the year;

“split income” of a specified individual for a taxation year means the aggregate of all amounts, other than excluded amounts, each of which is

(a)  an amount required to be included in computing the individual’s income for the year in respect of taxable dividends received by the individual in respect of shares of the capital stock of a corporation, other than shares listed on a designated stock exchange or shares of a mutual fund corporation, or because of the application of Division IV of Chapter II of Title III of Book III in respect of the ownership by any person of shares of the capital stock of a corporation, other than shares listed on such a stock exchange;

(b)  a portion of an amount included because of the application of paragraph f of section 600 in computing the individual’s income for the year, to the extent that the portion is not included in an amount described in paragraph a and can reasonably be considered to be income derived

i.  from the provision of property or services by a partnership or trust to, or in support of, a business carried on by

(1)  a person who is related to the individual at any time in the year,

(2)  a corporation of which a person related to the individual is a specified shareholder at any time in the year, or

(3)  a professional corporation of which a person related to the individual is a shareholder at any time in the year, or

ii.  from a business carried on by a partnership or trust or from the rental of property by a partnership or trust, if a person who is related to the individual at any time in the year is actively engaged on a regular basis in the activities of the partnership or trust that are carried on for earning income from a business or the rental of property, or in the case of a partnership, has an interest in the partnership directly or indirectly through one or more other partnerships; or

(c)  a portion of an amount included because of the application of section 662 or 663 in respect of a trust (other than a mutual fund trust or a trust referred to in section 851.25) in computing the individual’s income for the year, to the extent that the portion is not included in an amount described in paragraph a and can reasonably be considered

i.  to be in respect of taxable dividends received in respect of shares of the capital stock of a corporation (other than shares listed on a designated stock exchange or shares of a mutual fund corporation),

ii.  to arise because of the application of Division IV of Chapter II of Title III of Book III in respect of the ownership by any person of shares of the capital stock of a corporation (other than shares listed on a designated stock exchange),

iii.  to be income derived from the provision of property or services by a partnership or trust to, or in support of, a business carried on by

(1)  a person who is related to the individual at any time in the year,

(2)  a corporation of which a person related to the individual is a specified shareholder at any time in the year, or

(3)  a professional corporation of which a person related to the individual is a shareholder at any time in the year, or

iv.  to be income derived from a business carried on by a partnership or trust or from the rental of property by a partnership or trust, if a person who is related to the individual at any time in the year is actively engaged on a regular basis in the activities of the partnership or trust that are carried on for earning income from a business or the rental of property.

2015, c. 21, s. 306; 2017, c. 29, s. 154.

2015-10-21

766.3.3. In this division,

“excluded amount”, in respect of an individual for a taxation year, means an amount that is an income from, or the taxable capital gain from the disposition of, a property acquired by or for the benefit of the individual as a consequence of the death of

(a)  the individual’s father or mother; or

(b)  any other person, if the individual is enrolled as a full-time student during the year at a prescribed educational institution for the purposes of paragraph d of the definition of “trust” in section 890.15, or an individual in respect of whom subparagraphs a to c of the first paragraph of section 752.0.14 apply for the year;

“specified individual”, in relation to a taxation year, means an individual

(a)  who had not attained the age of 17 years before the year;

(b)  who was resident in Canada throughout the year; and

(c)  whose father or mother was resident in Canada in the year;

“split income” of a specified individual for a taxation year means the aggregate of all amounts, other than excluded amounts, each of which is

(a)  an amount required to be included in computing the individual’s income for the year in respect of taxable dividends received by the individual in respect of shares of the capital stock of a corporation, other than shares listed on a designated stock exchange or shares of a mutual fund corporation, or because of the application of Division IV of Chapter II of Title III of Book III in respect of the ownership by any person of shares of the capital stock of a corporation, other than shares listed on such a stock exchange;

(b)  a portion of an amount included in accordance with paragraph f of section 600 in computing the individual’s income for the year, to the extent that the portion

i.  is not included in an amount described in paragraph a, and

ii.  can reasonably be considered to be income derived from the provision of property or services by a partnership or trust to or in support of a business carried on by

(1)  a person who is related to the individual at any time in the year,

(2)  a corporation of which a person related to the individual is a specified shareholder at any time in the year, or

(3)  a professional corporation of which a person related to the individual is a shareholder at any time in the year; or

(c)  a portion of an amount included because of section 662 or 663 in respect of a trust, other than a mutual fund trust, in computing the individual’s income for the year, to the extent that the portion

i.  is not included in an amount described in paragraph a, and

ii.  can reasonably be considered to be in respect of taxable dividends received in respect of shares of the capital stock of a corporation, other than shares listed on a designated stock exchange or shares of a mutual fund corporation, to arise because of the application of Division IV of Chapter II of Title III of Book III in respect of the ownership by any person of shares of the capital stock of a corporation, other than shares listed on such a stock exchange, or to be income derived from the provision of property or services by a partnership or trust to or in support of a business carried on by

(1)  a person who is related to the individual at any time in the year,

(2)  a corporation of which a person related to the individual is a specified shareholder at any time in the year, or

(3)  a professional corporation of which a person related to the individual is a shareholder at any time in the year.

2015, c. 21, s. 306.