Income Tax Act — I-3.3 132
Capital gains refund to mutual fund trust 132 (1) Where a trust was, throughout a taxation year, a mutual fund trust and a return of its income for the year has been made within 3 years from the end of the year, the Minister (a) may, on sending the notice of assessment for the year, refund an amount (in this subsection referred to as its “capital gains refund” for the year) equal to the lesser of (i) the total of (A) 16.5% of the total of the trust’s capital gains redemptions for the year, and (B) the positive or negative amount, if any, that the Minister determines to be reasonable in the circumstances, after giving consideration to the percentages applicable in determining the trust’s capital gains refunds for the year or any previous taxation year and the percentages applicable in determining the trust’s refundable capital gains tax on hand at the end of the year, and (ii) the trust’s refundable capital gains tax on hand at the end of the year; and (b) shall, with all due dispatch, make that capital gains refund after sending the notice of assessment if an application for it has been made in writing by the trust within the period within which the Minister would be allowed under subsection 152(4) to assess tax payable under this Part by the trust for the year if that subsection were read without reference to paragraph 152(4)(a). Application to other liability (2) Instead of making a refund that might otherwise be made under subsection 132(1) the Minister may, where the trust is liable or about to become liable to make any payment under this Act, apply the amount that would otherwise be refunded to that other liability and notify the trust of that action. Interest on capital gains refund (2.1) If a capital gains refund for a taxation year is paid to, or applied to a liability of, a mutual fund trust, the Minister shall pay or apply interest on the refund at the prescribed rate for the period beginning on the day that is 30 days after the later of (a) the day that is 90 days after the end of the year, and (b) the day on which the trust’s return of income under this Part for the year was filed under section 150 and ending on the day on which the refund is paid or applied. Excess interest on capital gains refund (2.2) Where at any particular time interest has been paid to, or applied to a liability of, a trust under subsection 132(2.1) in respect of a capital gains refund and it is determined at a subsequent time that the capital gains refund was less than that in respect of which interest was so paid or applied, (a) the amount by which the interest that was so paid or applied exceeds the interest, if any, computed in respect of the amount that is determined at the subsequent time to be the capital gains refund shall be deemed to be an amount (in this subsection referred to as the “amount payable”) that became payable under this Part by the trust at the particular time; (b) the trust shall pay to the Receiver General interest at the prescribed rate on the amount payable, computed from the particular time to the day of payment; and (c) the Minister may at any time assess the trust in respect of the amount payable and, where the Minister makes such an assessment, the provisions of Divisions I and J apply, with such modifications as the circumstances require, in respect of the assessment as though it had been made under section 152. Application of s. 104(20) (3) In its application in respect of a mutual fund trust, subsection 104(20) shall be read as if the reference therein to “a dividend (other than a taxable dividend)” were read as a reference to “a capital dividend”. Definitions (4) In this section, capital gains redemptions of a mutual fund trust for a taxation year means the amount determined by the formula (A/B × (C + D)) - E where A is the total of all amounts each of which is the portion of an amount paid by the trust in the year on the redemption of a unit in the trust that is included in the proceeds of disposition in re