Income Tax Act — I-3.3 56
 of the particular individual for a taxation year from the property referred to in paragraph 56(4.1)(b) that relates to the period or periods in the year throughout which the creditor or the creditor trust, as the case may be, was resident in Canada and the particular individual was not dealing at arm’s length with the creditor or the original transferor, as the case may be, shall be deemed, (i) where subparagraph 56(4.1)(a)(i) applies, to be income of the creditor for that year and not of the particular individual except to the extent that (A) section 74.1 applies or would, but for subsection 74.5(3), apply, or (B) subsection 75(2) applies to that income, and (ii) where subparagraph 56(4.1)(a)(ii) applies, to be income of the creditor trust for that year and not of the particular individual except to the extent that (A) subparagraph 56(4.1)(c)(i) applies, (B) section 74.1 applies or would, but for subsection 74.5(3), apply, or (C) subsection 75(2) applies (otherwise than because of paragraph 56(4.1)(d)) to that income; and (d) where subsection 75(2) applies to any of the property referred to in paragraph 56(4.1)(b) and subparagraph 56(4.1)(c)(ii) applies to income from the property, subsection 75(2) applies after subparagraph 56(4.1)(c)(ii) is applied. Exception (4.2) Notwithstanding any other provision of this Act, subsection 56(4.1) does not apply to any income derived in a particular taxation year where (a) interest was charged on the loan or indebtedness at a rate equal to or greater than the lesser of (i) the prescribed rate of interest in effect at the time the loan was made or the indebtedness arose, and (ii) the rate that would, having regard to all the circumstances, have been agreed on, at the time the loan was made or the indebtedness arose, between parties dealing with each other at arm’s length; (b) the amount of interest that was payable in respect of the particular year in respect of the loan or indebtedness was paid not later than 30 days after the end of the particular year; and (c) the amount of interest that was payable in respect of each taxation year preceding the particular year in respect of the loan or indebtedness was paid not later than 30 days after the end of each of those preceding taxation years. Repayment of existing indebtedness (4.3) For the purposes of subsection 56(4.1), where at any time a particular property is used to repay, in whole or in part, a loan or indebtedness that enabled or assisted an individual to acquire another property, there shall be included in computing the income from the particular property that proportion of the income or loss, as the case may be, derived after that time from the other property or from property substituted therefor that the amount so repaid is of the cost to the individual of the other property, but for greater certainty nothing in this subsection shall affect the application of subsection 56(4.1) to any income or loss derived from the other property or from property substituted therefor. Exception for split income (5) Subsections (2), (4) and (4.1) do not apply to any amount that is included in computing a specified individual’s split income for a taxation year. Child care benefit (6) There shall be included in computing the income of a taxpayer for a taxation year the total of all amounts each of which is a benefit paid under section 4 of the Universal Child Care Benefit Act that is received in the taxation year by (a) the taxpayer, if (i) the taxpayer does not have a cohabiting spouse or common-law partner (within the meaning assigned by section 122.6) at the end of the year and the taxpayer does not make a designation under subsection (6.1) for the taxation year, or (ii) the income, for the taxation year, of the person who is the taxpayer’s cohabiting spouse or common-law partner at the end of the taxation year is equal to or greater than the income of the taxpayer for the taxation year; (b) the taxpayer’s cohabiting spouse or common-law partner a