Tax wiki
s. 207.61
PART XI.3 — Tax in Respect of Retirement Compensation Arrangements
Tax payable on prohibited investment
Not yet annotated · Text current to 2026-06-21 · section last amended 2012-12-14
Current text
A custodian of a retirement compensation arrangement shall pay a tax under this Part for a calendar year if, at any time in the year,
the arrangement acquires property that is a prohibited investment for the arrangement; or
subject property of the arrangement becomes a prohibited investment for the arrangement after March 29, 2012.
Amount of tax payable
(2)The amount of tax payable in respect of each property described in subsection (1) is 50% of the fair market value of the property at the time referred to in that subsection.
Refund
(3)If in a calendar year an RCA trust disposes of a property in respect of which a tax is imposed under subsection (1) on the custodian of the retirement compensation arrangement, the custodian is entitled to a refund for the year of an amount equal to
the amount of the tax so imposed, unless paragraph (b) applies; or
nil,
if it is reasonable to consider that the custodian, or a specified beneficiary of the arrangement, knew, or ought to have known, at the time the property was acquired by the arrangement, that it was, or would become, a property described in subsection (1), or
if the property is not disposed of by the arrangement before the end of the calendar year following the calendar year in which the tax arose, or any later time that the Minister considers reasonable in the circumstances.
Deemed disposition and reacquisition
(4)If, at any time, a property held by an RCA trust ceases to be, or becomes, a prohibited investment for the RCA trust, the RCA trust is deemed to have disposed of the property immediately before that time for proceeds of disposition equal to the fair market value of the property at that time and to have reacquired the property at that time at a cost equal to that fair market value.
Source: Justice Laws Website. Not an official version.
Historic text
This section has not been amended since it was enacted (2012, c. 31, s. 45), so there is no earlier version.
Earlier versions: Justice Laws point-in-time versions of the Act (from 31 August 2004), and CanLII (under “Versions”). On Justice Laws, each version of section 207.61 links to the one before it.
Enacting and amending legislation
- 2012, c. 31, s. 45
Text before 2004 is found in the annual Statutes of Canada cited above. Application and coming-into-force provisions are not part of the consolidation; see the amending Acts.
Cross-references
Citation
Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), s. 207.61.