BILL 37

An Act to Amend the New Brunswick Income Tax Act

Her Majesty, by and with the advice and consent of the Legislative Assembly of New Brunswick, enacts as follows:

1 Section 50 of the New Brunswick Income Tax Act, chapter N-6.001 of the Acts of New Brunswick, 2000, is amended

(a)  in subsection (1)

(i) by repealing the definition “approved share” and substituting the following:

“approved share” means a share of the capital stock of a prescribed registered labour-sponsored venture capital corporation acquired or irrevocably subscribed and paid for by an individual, or by a qualifying trust for the individual in respect of the share, where the individual is or will be the first person, other than a broker or dealer in securities, to be a registered holder thereof; (action approuvée)

(ii) by adding the following definition in alphabetical order:

“qualifying trust” means qualifying trust as defined in subsection 127.4(1) of the Federal Act; (fiducie admissible)

(b)  in paragraph (2)(b)

(i) in the portion preceding subparagraph (i) by striking out “to the individual” and substituting “to the individual, or to a qualifying trust for the individual in respect of the share,”;

(ii) in subparagraph (i) by striking out “by the individual” and substituting “by the individual, or by the qualifying trust for the individual in respect of the share,”;

(c)  by adding after subsection (2) the following:

50(2.1) Subject to subsection (2.2), the holder of an approved share in respect of which a deduction has been allowed under this section who disposes of the share less than 8 years after the date it was acquired or irrevocably subscribed and paid for shall remit to the Minister of Finance of New Brunswick within 30 days after the disposition of the share

(a)  an amount equal to the amount deducted in respect of that share, including interest thereon where prescribed, or

(b)  in circumstances prescribed by regulation, a lesser amount determined in accordance with the regulations.

50(2.2) Subsection (2.1) does not apply where the holder of an approved share disposes of it in February or on the first day of March of a calendar year and the date of disposition is not more than 31 days before the day that is 8 years after the date it was acquired or irrevocably subscribed and paid for.

50(2.3) The holder of an approved share in respect of which a deduction has been allowed under this section who disposes of the share more than 8 years after the date it was acquired or irrevocably subscribed and paid for may make a deduction under subsection (2) in respect of a subsequent acquisition or purchase of the same share or substantially the same share.

(d)  in subsection (3) by striking out “This section” and substituting “Subject to subsection (4), this section”;

(e)  by adding after subsection (3) the following:

50(4) Paragraph (2)(b) as it relates to a qualifying trust and subsection (2.3) apply to the 2007 and subsequent taxation years.

COMMENCEMENT

2(1) Subject to subsection (2), this Act shall be deemed to have come into force on January 1, 2008.

2(2) Subsections 50(2.1) and (2.2) as enacted by paragraph 1(c) of this Act shall be deemed to have come into force on January 1, 2000.

EXPLANATORY NOTES

Section 1

(a)  

i)  The existing definition is as follows:

“approved share” means a share of the capital stock of a prescribed registered labour-sponsored venture capital corporation acquired or irrevocably subscribed and paid for by an individual where the individual is or will be the first person, other than a broker or dealer in securities, to be a registered holder thereof; (action approuvée)

ii)  New definition.

(b)  

i)  The existing provision is as follows:

50(2) There may be deducted from the tax otherwise payable under this Act for a taxation year by an individual an amount equal to the lesser of

(b)  15% of the total of all amounts each of which is the net cost to the individual of an approved share of a prescribed registered labour-sponsored venture capital corporation

ii)  The existing provision is as follows:

(i) that was acquired or irrevocably subscribed and paid for by the individual in the taxation year or within 60 days after the end of the taxation year,

(c)  New provisions.

(d)  The existing provision is as follows:

50(3) This section applies to the 2000 taxation year and to any subsequent taxation year that is prescribed.

(e)  New provision.

Section 2

Commencement provision.