I-3 - Taxation Act

Section 851.34 Disposition versions

2017-02-08

851.34. The rules set out in the second paragraph apply if, at any time,

(a)  a national sport organization that is a registered Canadian amateur athletic association receives an amount for the benefit of an individual under an arrangement made under rules of an international sport federation that require amounts to be held, controlled and administered by the organization in order to preserve the eligibility of the individual to compete in a sporting event sanctioned by the federation; or

(b)  an individual enters into an arrangement that

i.  is an account with an issuer described in paragraph b of the definition of “qualifying arrangement” in subsection 1 of section 146.2 of the Income Tax Act (R.S.C. 1985, c. 1, (5th Suppl.)), or that would be so described if that definition applied at that time,

ii.  provides that no amount may be deposited, credited or added to the account, other than an amount that is qualifying performance income of the individual or that is interest or other income in respect of the property deposited, credited or added to the account,

iii.  provides that a third party must authorize all payments from the account, and

iv.  is not a registered retirement savings plan or a tax-free savings account.

The rules to which the first paragraph refers, in respect of an arrangement, are the following:

(a)  a trust (in this Title referred to as the “amateur athlete trust”) is deemed to be created on the day on which the first amount under the arrangement is received by the national sport organization or by the issuer, as the case may be, and to exist continuously afterwards until section 851.36 or 851.37 applies in respect of the trust;

(b)  the property held under the arrangement is deemed to be the property of the amateur athlete trust and not property of any other person;

(c)  if, at any time, the national sport organization or the issuer, as the case may be, receives an amount under the arrangement and the amount would, in the absence of this paragraph, be included in computing the income of the individual in respect of the arrangement for the individual’s taxation year that includes that time, the amount is deemed to be income of the amateur athlete trust for the taxation year and not to be income of the individual;

(d)  if, at any time, the national sport organization or the issuer, as the case may be, pays or transfers an amount under the arrangement to or for the benefit of the individual, the amount is deemed to be an amount distributed at that time to the individual by the amateur athlete trust;

(e)  the individual is deemed to be the beneficiary under the amateur athlete trust;

(f)  the national sport organization or the third party, as the case may be, in respect of the arrangement is deemed to be the trustee of the amateur athlete trust; and

(g)  no tax is payable under this Part by the amateur athlete trust on its taxable income for any taxation year.

1994, c. 22, s. 283; 1999, c. 83, s. 122; 2000, c. 5, s. 187; 2005, c. 23, s. 122; 2010, c. 5, s. 82; 2017, c. 1, s. 250.

2010-04-20

851.34. The rules set out in the second paragraph apply if, at any time,

(a)  a national sport organization that is a registered Canadian amateur athletic association receives an amount for the benefit of an individual under an arrangement made under rules of an international sport federation that require amounts to be held, controlled and administered by the organization in order to preserve the eligibility of the individual to compete in a sporting event sanctioned by the federation; or

(b)  an individual enters into an arrangement that

i.  is an account with an issuer described in paragraph b of the definition of “qualifying arrangement” in subsection 1 of section 146.2 of the Income Tax Act (R.S.C. 1985, c. 1, (5th Suppl.)), or that would be so described if that definition applied at that time,

ii.  provides that no amount may be deposited, credited or added to the account, other than an amount that is qualifying performance income of the individual or that is interest or other income in respect of the property deposited, credited or added to the account,

iii.  provides that a third party must authorize all payments from the account, and

iv.  is not a registered retirement savings plan or a tax-free savings account.

The rules to which the first paragraph refers, in respect of an arrangement, are the following:

(a)  an inter vivos trust (in this Title referred to as the “amateur athlete trust”) is deemed to be created on the day on which the first amount under the arrangement is received by the national sport organization or by the issuer, as the case may be, and to exist continuously afterwards until section 851.36 or 851.37 applies in respect of the trust;

(b)  the property held under the arrangement is deemed to be the property of the amateur athlete trust and not property of any other person;

(c)  if, at any time, the national sport organization or the issuer, as the case may be, receives an amount under the arrangement and the amount would, in the absence of this paragraph, be included in computing the income of the individual in respect of the arrangement for the individual’s taxation year that includes that time, the amount is deemed to be income of the amateur athlete trust for the taxation year and not to be income of the individual;

(d)  if, at any time, the national sport organization or the issuer, as the case may be, pays or transfers an amount under the arrangement to or for the benefit of the individual, the amount is deemed to be an amount distributed at that time to the individual by the amateur athlete trust;

(e)  the individual is deemed to be the beneficiary under the amateur athlete trust;

(f)  the national sport organization or the third party, as the case may be, in respect of the arrangement is deemed to be the trustee of the amateur athlete trust; and

(g)  no tax is payable under this Part by the amateur athlete trust on its taxable income for any taxation year.

1994, c. 22, s. 283; 1999, c. 83, s. 122; 2000, c. 5, s. 187; 2005, c. 23, s. 122; 2010, c. 5, s. 82.

2006-03-01

851.34. Where a national sport organization that is a registered Canadian amateur athletic association receives an amount for the benefit of an individual under an arrangement made under rules of an international sport federation that require amounts to be held, controlled and administered by the organization in order to preserve the eligibility of the individual to compete in a sporting event sanctioned by the federation,

(a)  an inter vivos trust, in this Title referred to as an “amateur athlete trust”, is deemed to be created on the day that is the later of the day on which the first such amount is received by the organization and 1 January 1992, and to exist continuously thereafter until section 851.36 or 851.37 applies in respect of the trust;

(b)  all property required to be held after 31 December 1991 under the arrangement is deemed to be property of the trust and not property of any other person;

(c)  any amount received at any time by the organization under the arrangement is, to the extent that it would, but for this section, have been included in computing the individual’s income for his taxation year that includes that time, deemed to be income of the trust for the taxation year and not to be income of the individual;

(d)  all amounts paid at any time by the organization under the arrangement to or for the benefit of the individual are deemed to be amounts distributed at that time to the individual by the trust;

(e)  the individual is deemed to be the beneficiary under the trust;

(f)  the organization is deemed to be the trustee of the trust; and

(g)  no tax is payable under this Part by the trust on its taxable income for any taxation year.

1994, c. 22, s. 283; 1999, c. 83, s. 122; 2000, c. 5, s. 187; 2005, c. 23, s. 122.