I-3 - Taxation Act

Section 772.9.3 Disposition versions

2006-06-13

772.9.3. If at any particular time in a taxation year an individual who is not resident in Canada disposes of a property that the individual last acquired at any time, in this section referred to as the “acquisition time”, on a distribution by a trust after 1 October 1996 to which subparagraphs a to c of the first paragraph of section 688 do not apply only because of the application of section 692, the trust may deduct from its tax otherwise payable under this Part for the year, in this section referred to as the “distribution year”, that includes the acquisition time, an amount not exceeding the lesser of

(a)  the amount by which the aggregate of all amounts each of which is the amount of any business-income tax or non-business-income tax paid by the individual for the taxation year to the government described in the second paragraph, that can reasonably be regarded as having been paid in respect of the portion of any gain or profit from the disposition of the property that accrued before the distribution and after the latest of the following times before the distribution, exceeds the deduction relating to the portion of the gain or profit that is granted to the trust for the distribution year under subsection 2.22 of section 126 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement):

i.  the time at which the trust became resident in Canada,

ii.  the time at which the individual became a beneficiary under the trust, or

iii.  the time at which the trust acquired the property; and

(b)  the amount by which the amount of tax under this Part that was, after taking into account the application of this section to dispositions that occurred before the particular time, otherwise payable by the trust for the distribution year, exceeds the amount of such tax that would otherwise have been payable by the trust if the property had not been distributed to the individual.

The government to which subparagraph a of the first paragraph refers is,

(a)  if the property is immovable property situated in a country other than Canada,

i.  the government of that country, or

ii.  the government of a country in which the individual is resident at the particular time described in the first paragraph and with which the Gouvernement du Québec or the Government of Canada has a tax agreement at that time; or

(b)  if the property is not immovable property, the government of a country in which the individual is resident at the particular time described in the first paragraph and with which the Gouvernement du Québec or the Government of Canada has a tax agreement at that time.

2005, c. 23, s. 109; 2006, c. 13, s. 64.

2006-03-01

772.9.3. If at any particular time in a taxation year an individual who is not resident in Canada disposes of a property that the individual last acquired at any time, in this section referred to as the "acquisition time", on a distribution by a trust after 1 October 1996 to which subparagraphs a to c of the first paragraph of section 688 do not apply only because of the application of section 692, the trust may deduct from its tax otherwise payable under this Part for the year, in this section referred to as the "distribution year", that includes the acquisition time, an amount not exceeding the lesser of

(a)  the aggregate of all amounts each of which is the amount of any business-income tax or non-business-income tax paid by the individual for the taxation year to the government described in the second paragraph, that can reasonably be regarded as having been paid in respect of that portion of any gain or profit from the disposition of the property that accrued before the distribution and after the latest of the times, before the distribution, at which

i.  the trust became resident in Canada,

ii.  the individual became a beneficiary under the trust, or

iii.  the trust acquired the property; and

(b)  the amount by which the amount of tax under this Part that was, after taking into account the application of this section to dispositions that occurred before the particular time, otherwise payable by the trust for the distribution year, exceeds the amount of such tax that would otherwise have been payable by the trust if the property had not been distributed to the individual.

The government to which subparagraph a of the first paragraph refers is,

(a)  if the property is immovable property situated in a country other than Canada,

i.  the government of that country, or

ii.  the government of a country with which Canada has a tax treaty at the particular time referred to in the first paragraph and in which the individual is resident at that time; or

(b)  if the property is not immovable property, the government of a country with which Canada has a tax treaty at the particular time referred to in the first paragraph and in which the individual is resident at that time.

2005, c. 23, s. 109.