Income Tax Act — I-3.3 146.6
dited to a deposit (3.1) An amount that is credited or added to a deposit that is a FHSA as interest or other income in respect of the FHSA is deemed not to be received by the holder of the FHSA or any other person solely because of that crediting or adding. Carrying on a business (4) If tax is payable under this Part for a taxation year by application of subsection (3) by a trust that is governed by a FHSA that carries on one or more businesses at any time in the taxation year, (a) the holder of the FHSA is jointly and severally, or solidarily, liable with the trust to pay each amount payable under this Act by the trust that is attributable to that business or those businesses; and (b) the issuer’s liability at any time for amounts payable under this Act in respect of that business or those businesses may not exceed the total of (i) the amount of property of the trust that the issuer is in possession or control of at that time in its capacity as legal representative of the trust, and (ii) the total amount of all distributions of property from the trust on or after the date that the notice of assessment was sent in respect of the taxation year and before that time. FHSA deduction (5) There may be deducted in computing a taxpayer’s income for a taxation year an amount not exceeding the lesser of (a) the amount determined by the formula A − B where A is the total of all amounts each of which is the taxpayer’s annual FHSA limit for the year and each preceding taxation year, and B is the total of all amounts each of which is an amount deducted under this subsection in computing the individual’s income for preceding taxation years, and (b) the amount by which $40,000 exceeds the total of (i) the amount determined for B in paragraph (a), and (ii) the taxpayer’s net RRSP-to-FHSA transfer amount as at the end of the year. Withdrawals included in income (6) There shall be included in computing the income of a taxpayer for a taxation year the total of all amounts received by the taxpayer in the year out of or under a FHSA of which the taxpayer is the holder, other than an amount that is (a) a qualifying withdrawal; (b) a designated amount as defined in subsection 207.01(1); or (c) otherwise included in computing the income of the taxpayer. Transfer of amounts (7) Subsection (8) applies to an amount transferred at a particular time from a FHSA (in this subsection referred to as the “transferor FHSA”) if the following conditions are met: (a) the amount is transferred on behalf of an individual who is (i) the holder of the transferor FHSA, (ii) a spouse or common-law partner or former spouse or common-law partner of the holder of the transferor FHSA and who is entitled to the amount under a decree, order or judgment of a competent tribunal, or under a written agreement, relating to a division of property between the holder and the individual, in settlement of rights arising out of, or on a breakdown of, their marriage or common-law partnership, or (iii) entitled to the amount as a consequence of the death of the holder of the transferor FHSA and was a spouse or common-law partner of the holder immediately before the death; (b) the amount is transferred directly to (i) another FHSA of the individual, or (ii) an RRSP or a RRIF under which the individual is the annuitant; and (c) if the transfer is not made to another FHSA of the holder of the transferor FHSA, the amount does not exceed the amount determined by the formula A − B where A is the amount that is the total fair market value, immediately before the particular time, of all property held by a FHSA under which the last holder of the transferor FHSA is the last holder, and B is the excess FHSA amount (as defined in subsection 207.‍01(1)) of the last holder of the transferor FHSA immediately before the particular time. Tax-free transfer (8) If this subsection applies to an amount transferred from a FHSA, (a) the amount shall not, by reason only of the transfer, be included in computing