Income Tax Act — I-3.3 126
mer resident — trust beneficiary (2.22) If at any particular time in a particular taxation year a non-resident individual disposes of a property that the individual last acquired at any time (in this subsection referred to as the “acquisition time”) on a distribution after October 1, 1996 to which paragraphs 107(2)(a) to (c) do not apply only because of subsection 107(5), the trust may deduct from its tax otherwise payable under this Part for the year (in this subsection referred to as the “distribution year”) that includes the acquisition time an amount not exceeding the lesser of (a) the total 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 particular year (i) where the property is real or immovable property situated in a country other than Canada, (A) to the government of that country, or (B) to the government of a country with which Canada has a tax treaty at the particular time and in which the individual is resident at the particular time, or (ii) where the property is not real or immovable property, to the government of a country with which Canada has a tax treaty at the particular time and in which the individual is resident at the particular time, 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 (iii) the trust became resident in Canada, (iv) the individual became a beneficiary under the trust, or (v) the trust acquired the property, and (b) the amount, if any, by which (i) the amount of tax under this Part that was, after taking into account the application of this subsection in respect of dispositions that occurred before the particular time, otherwise payable by the trust for the distribution year exceeds (ii) the amount of such tax that would have been payable by the trust for the distribution year if the property had not been distributed to the individual. Where foreign credit available (2.23) For the purposes of subsections (2.21) and (2.22), in computing, in respect of the disposition of a property by an individual in a taxation year, the total amount of taxes paid by the individual for the year to one or more governments of countries other than Canada, there shall be deducted any tax credit (or other reduction in the amount of a tax) to which the individual was entitled for the year, under the law of any of those countries or under a tax treaty between Canada and any of those countries, because of taxes paid or payable by the individual under this Act in respect of the disposition or a previous disposition of the property. Rules relating to unused foreign tax credit (2.3) For the purposes of this section, (a) the amount claimed under paragraph 126(2)(a) by a taxpayer for a taxation year in respect of a country shall be deemed to be in respect of the business-income tax paid by the taxpayer for the year in respect of businesses carried on by the taxpayer in that country to the extent of the amount of that tax, and the remainder, if any, of the amount so claimed shall be deemed to be in respect of the taxpayer’s unused foreign tax credits in respect of that country that may be claimed for the taxation year; (b) no amount may be claimed under paragraph (2)(a) in computing a taxpayer’s tax payable under this Part for a particular taxation year in respect of the taxpayer’s unused foreign tax credit in respect of a country for a taxation year until the taxpayer’s unused foreign tax credits in respect of that country for taxation years preceding the taxation year that may be claimed for the particular taxation year have been claimed; and (c) an amount in respect of a taxpayer’s unused foreign tax credit in respect of a country for a taxation year may be claimed under paragraph (2)(a) in computing the taxpayer’s tax payable under this Part for a pa