Income Tax Act — I-3.3 146.6
y 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 the income of any taxpayer; and (b) no deduction may be made under this Part in respect of the amount in computing the income of any taxpayer. Taxable transfer (9) If an amount is transferred from a FHSA to a plan or fund (in this subsection referred to as the “transferee plan”) that is a FHSA, RRSP or RRIF and subsection (8) does not apply to the amount transferred, (a) the amount is deemed to have been received from the FHSA by the holder of the FHSA; (b) the holder or annuitant of the transferee plan is deemed to have paid the amount as a contribution or premium to the transferee plan; and (c) in the case that the transferee plan is a RRIF, for the purposes of subsection 146(5) and Part X.1, the annuitant of the transferee plan is deemed to have paid the amount at the time of the transfer as a premium under a RRSP under which the annuitant is the annuitant (as defined in subsection 146(1)). Apportionment of transferred amount (10) If an amount is transferred from a FHSA to another FHSA, or to a RRSP or RRIF, and a portion but not all of the amount is transferred in accordance with subsection (7), (a) subsection (8) applies to the portion of the amount transferred in accordance with subsection (7), and (b) subsection (9) applies with respect to the remainder of the amount. Security for loan (11) If at any time in a taxation year a trust governed by a FHSA uses or permits to be used any property of the trust as security for a loan, the fair market value of the property at the time it commenced to be so used shall be included in computing the income for the year of the holder of the FHSA at that time. Recovery of property used as security (12) If in a taxation year a property described in subsection (11) ceases to be used as security for a loan, there may be deducted, in computing the income of the holder of the relevant FHSA for the taxation year, an amount equal to the amount determined by the formula A − B where A is the amount included by application of subsection (11) in computing the income of the holder as a consequence of the property being used as security for a loan; and B is the net loss (exclusive of payments by the trust as or on account of interest) sustained by the trust in consequence of its using the property, or permitting it to be used, as security for the loan and not as a result of a change in the fair market value of the property. Successor holder (13) If the holder of a FHSA dies and the holder’s survivor is designated as the successor holder of the FHSA, the survivor is, immediately after the time of death, deemed to have entered into a new qualifying arrangement in respect of the FHSA unless (a) the survivor is a qualifying individual at that time and (i) no contributions or transfers are made to the FHSA by the survivor after that time, (ii) no qualifying withdrawals are made from the FHSA after that time, and (iii) the balance of the FHSA is transferred to a RRSP or RRIF of the survivor or distributed to the survivor in accordance with subsection (14), by the end of the year following the year of death; or (b) the survivor is not a qualifying individual at that time, in which case the balance of the FHSA is to be transferred to a FHSA, RRSP or RRIF of the survivor, or distributed to the survivor in accordance with subsection (14), by the end of the year following the year of death. Distribution on death (14) If, as a consequence of the death of the holder of a FHSA, an amount is distributed in a taxation year from the FHSA to, or on behalf of, a beneficiary, the amount shall be included in computing the beneficiary’s income for the year. Deemed transfer or distribution (15) If an amount is received at any time from the FHSA of a deceased holder by the holder’s legal representative and a survivor of the h