Bill 34 - An Act to Amend the New Brunswick Income Tax Act

BILL 34

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

(a) in subsection (3.2) in the portion preceding paragraph (a) by striking out “and subsequent taxation years”;

(b) by adding after subsection (3.2) the following:

14( 3.3) For the 2015 taxation year and subsequent taxation years, the tax payable under this Part for a taxation year by an individual on the individual’s taxable income or taxable income earned in Canada, as the case may be, referred to in this Division as the “amount taxable”, is the sum of the following:

(a) 9.68% of the portion of the amount taxable that is less than or equal to $39,973;

(b) 14.82% of the amount by which the amount taxable exceeds $39,973 and does not exceed $79,946;

(d) 17.84% of the amount by which the amount taxable exceeds $129,975 and does not exceed $150,000;

(e) 21% of the amount by which the amount taxable exceeds $150,000 and does not exceed $250,000; and

(f) 25.75% of the amount by which the amount taxable exceeds $250,000.

2 Section 16.1 of the Act is amended by adding after subsection (1.4) the following:

16.1( 1.5) This section does not apply to

(a) the amount “$150,000” referred to in paragraph 14(3.3)(d), and

(b) paragraphs 14(3.3)(e) and (f).

3 Section 35 of the Act is amended

(a) in paragraph (b) of the English version by striking out “and” at the end of the paragraph;

(b) in paragraph (c)

( i) by striking out the portion preceding subparagraph (i) and substituting the following:

( ii) by striking out the period at the end of the paragraph and substituting a semicolon;

(d) effective January 1, 2014, to December 31, 2014, both dates inclusive:

( i) the reference to the fraction in paragraph (a) of that section of the Federal Act shall be read as a reference to the fraction that yields a New Brunswick dividend tax credit rate of 5.3%; and

( ii) the reference to the fraction in paragraph (b) of that section of the Federal Act shall be read as a reference to the fraction that yields a New Brunswick dividend tax credit rate of 12%; and

(e) effective January 1, 2015,

( i) the reference to the fraction in paragraph (a) of that section of the Federal Act shall be read as a reference to the fraction that yields a New Brunswick dividend tax credit rate of 4%; and

( ii) the reference to the fraction in paragraph (b) of that section of the Federal Act shall be read as a reference to the fraction that yields a New Brunswick dividend tax credit rate of 12%.

4 Subsection 49(4) of the Act is amended

(a) in paragraph (b) of the English version by striking out “and” at the end of the paragraph;

(b) by adding after paragraph (b) the following:

(b.1) if, in computing a taxpayer’s income for a taxation year from a business carried on by the taxpayer in New Brunswick, an amount is included in respect of interest paid or payable to the taxpayer by a person resident in a country other than Canada, and the taxpayer has paid to the government of that other country a non-business income tax for the year with respect to the amount, the amount is, in applying the definition “qualifying incomes” referred to in paragraph (c) for the purpose of subsection (1), deemed to be income from a source in that other country; and

5 The heading “Seniors’ Tax Benefit” preceding section 52 of the Act is repealed and the following is substituted:

Seniors’ Benefits

6 The Act is amended by adding after section 52 the following:

Seniors’ home renovation tax credit

52.01( 1) The following definitions apply in this section.

“eligible individual” means an individual, other than a trust, who meets the following requirements: (particulier admissible)

(a) the individual resided in New Brunswick on the last day of the taxation year; and

(b) the individual

( i) was a senior at the end of the taxation year in which a qualifying expenditure was paid in respect of a qualifying renovation to the individual’s qualifying principal residence, or

( ii) was a qualifying relation of a senior at the end of the taxation year in which a qualifying expenditure was paid in respect of a qualifying renovation to the individual’s qualifying principal residence.

“principal residence”, in respect of an eligible individual, means premises, including a non-seasonal mobile home, that are occupied by the individual as the individual’s primary place of residence. (résidence principale)

“qualifying expenditure”, of an eligible individual for a taxation year, means an outlay or expense made or incurred by, or on behalf of, the individual in the taxation year that is directly attributable to a qualifying renovation by the individual and includes such an outlay or expense for permits required for, or for the rental of equipment used in the course of, the qualifying renovation, but does not include such an outlay or expense (dépense admissible)

(a) to acquire goods that have been used, or acquired for use or lease, by the individual or by a qualifying relation of the individual, for any purpose before they were acquired by the individual or the qualifying relation of the individual,

(b) made or incurred under the terms of an agreement entered into before January 1, 2015,

(d) that is the cost of annual, recurring or routine repair, maintenance or service,

(e) to acquire a household appliance,

(f) to acquire an electronic home-entertainment device,

(g) for financing costs in respect of the qualifying renovation,

(h) made or incurred for the purpose of gaining or producing income from a business or property, or

(i) in respect of goods or services provided by a person not dealing at arm’s length with the individual, unless the person is registered for the purposes of Part IX of the Excise Tax Act (Canada).

“qualifying principal residence”, of an eligible individual for a taxation year, means a residence located in New Brunswick that is (résidence principale admissible)

(a) if the individual is a senior at the end of the taxation year, the principal residence of the individual at any time during the taxation year or a residence that is reasonably expected to become the principal residence of the individual within 24 months after the end of the taxation year, or

(b) if the individual is not a senior at the end of the taxation year, the principal residence of the individual at any time during the taxation year and that is, at the same time, also the principal residence of a qualifying relation of the individual who is a senior at the end of the taxation year, or a residence that is reasonably expected to become such a shared principal residence within 24 months after the end of the taxation year.

“qualifying relation”, of an eligible individual, means a person who is connected or related to the individual in any manner described in subsection 251(6) or 252(2) of the Federal Act. (proche admissible)

“qualifying renovation” means an improvement prescribed by regulation or an improvement (rénovation admissible)

(a) that is part of a renovation or alteration of a qualifying principal residence of a senior or of the land on which the residence is situated, or that is part of the construction of the residence, that can reasonably be considered to be undertaken

( i) to enable the senior to gain access to, or to be mobile or functional within, the residence or the land, or

( ii) to reduce the risk of harm to the senior within the residence or the land, or in gaining access to the residence or the land,

(b) that

( i) is of an enduring nature and that is integral to the residence or the land on which the residence is situated, or

( ii) relates to the purchase and installation of a modular or removable version of an item of a type that can otherwise be installed as a permanent fixture to the residence or the land, including modular ramps and non-fixed bath lifts,

(d) that would ordinarily be undertaken by, or on behalf of, a person who has an impairment to enable the person to gain access to, or to be mobile or functional within, the person’s residence or land, and

(e) that is not an improvement excluded by regulation.

“senior” means an individual who is at least 65 years of age. (personne âgée)

52.01( 2) Subject to subsections (3) to (10), if an eligible individual applies on a form provided by the Minister for a tax credit under this section in respect of a taxation year and files the application and any other records required by the Minister with the individual’s return of income for the taxation year, the individual may claim a tax credit for the taxation year in the amount determined by the following formula:

A × B

where

A is 10%, and

B is the lesser of $10,000 and the amount determined by the following formula:

C - D

where

C is the total of all amounts each of which is a qualifying expenditure of the individual that was paid by or on behalf of the individual during the taxation year and that has not been used by another individual in the calculation of a credit claimed by that other individual under this section, and

D is the total of all amounts each of which is received or receivable by a person, or that can reasonably be expected to be received by a person, in respect of a qualifying expenditure of the individual referred to in “C” and that is

(a) provided under a program financed by a municipal, provincial or federal government, except the home accessibility tax credit under section 118.041 of the Federal Act, and that is designed to provide assistance with the cost of the construction, alteration or renovation of a residence or land on which the residence is situated,

(b) provided as a forgivable loan by a municipal, provincial or federal government and that is designed to provide permanent or temporary assistance with, or financing for, the cost of the construction, alteration or renovation of a residence or land on which the residence is situated, but only to the extent that the loan, or a portion of it, has not been repaid under a legal obligation to do so, or

52.01( 3) Subject to subsection (4), for the purposes of this section, a qualifying expenditure shall be deemed to have been paid on the earlier of the date on which the expenditure was paid and the date the expenditure became payable.

52.01( 4) If a qualifying expenditure in respect of a qualifying renovation is paid by or on behalf of the eligible individual in two or more instalments, the total of all instalments with respect to the qualifying expenditure shall be deemed to have been paid on the earlier of the date on which the last instalment was paid and the date the last instalment became payable.

52.01( 5) A qualifying expenditure of an eligible individual includes an outlay or expense made or incurred by a cooperative housing corporation, a condominium corporation or a similar entity, in this subsection referred to as the “corporation”, in respect of a property that is owned, administered or managed by the corporation and that includes the qualifying principal residence of the individual, to the extent of the individual’s share of that outlay or expense, if

(a) the outlay or expense would be a qualifying expenditure of the corporation if the corporation were a natural person and the property were the principal residence of that natural person, and

(b) the corporation has notified the individual, in writing, of the individual’s share of the outlay or expense.

52.01( 6) A qualifying expenditure of an eligible individual includes an outlay or expense made or incurred by a trust, in respect of a property that is owned by the trust and that includes the qualifying principal residence of the individual, to the extent of the share of that outlay or expense that is reasonably attributable to the individual, having regard to the amount of the outlays or expenses made or incurred in respect of the principal residence of the individual including, for this purpose, common areas relevant to more than one principal residence, if

(a) the outlay or expense would be a qualifying expenditure of the trust if the trust were a natural person and the property were the principal residence of that natural person, and

(b) the trust has notified the individual, in writing, of the individual’s share of the outlay or expense.

52.01( 7) For the purposes of this section, the following rules apply with respect to qualifying expenditures:

(a) if more than one individual is entitled to claim a tax credit under this section for a taxation year in respect of a single residence that is the qualifying principal residence of all of the individuals at the same time during the taxation year, the total amount of qualifying expenditures that may be claimed by all of the individuals in respect of the residence cannot exceed $10,000; and

(b) subject to subsection (9), if an eligible individual and the individual’s spouse or common-law partner on December 31 of a taxation year are both entitled to claim a tax credit under this section, the total amount of qualifying expenditures that may be claimed by the two individuals for the taxation year cannot exceed $10,000.

52.01( 8) If the eligible individuals cannot agree as to what portion of the amount each can claim under paragraph (7)(a) or (b), the Minister may fix the portions.

52.01( 9) Paragraph (7)(b) does not apply if, on December 31 of the taxation year, the eligible individual and the individual’s spouse or common-law partner

(a) have been living separate and apart for a period of at least 90 days because of a breakdown of their marriage or common-law partnership, or

(b) are living separate and apart because of medical necessity.

52.01( 10) An outlay or expense is not a qualifying expenditure unless the work to implement the qualifying renovation to which that outlay or expense is directly attributable begins within a reasonable time after the outlay or expense is made or incurred.

52.01( 11) Subject to subsection (12), an eligible individual who is resident in Canada for only part of a taxation year is entitled to claim for the year only the amount the individual would be entitled to claim for the year under this section that can reasonably be considered wholly applicable to any period in the year throughout which the individual was resident in Canada, computed as though that period were the whole taxation year.

52.01( 12) The amount that may be claimed under this section shall not exceed the amount that the eligible individual would have been entitled to claim under this section if the individual had been resident in Canada throughout the year.

52.01( 13) Subject to subsection (14), an eligible individual who becomes bankrupt in a calendar year is entitled to claim, for each taxation year that ends in the calendar year, only those amounts that the individual is entitled to claim for the taxation year under this section as can reasonably be considered wholly applicable to the taxation year.

52.01( 14) The sum of all amounts that may be claimed under this section for all taxation years of the eligible individual ending in a calendar year shall not exceed the total amount that the individual would have been entitled to claim under this section in respect of the calendar year if the individual had not become bankrupt.

52.01( 15) If an eligible individual becomes bankrupt in a calendar year and, when the bankruptcy occurs, he or she is not a senior but becomes a senior by the end of the calendar year, the bankrupt individual is eligible to claim a tax credit under this section for the taxation year that ends at the time of the bankruptcy.

52.01( 16) If an eligible individual becomes bankrupt in a calendar year and, when the bankruptcy occurs, he or she is a qualifying relation of another individual who is not a senior at that time but becomes a senior by the end of the calendar year, the bankrupt individual is eligible to claim a tax credit under this section for the taxation year that ends at the time of the bankruptcy.

52.01( 17) If, when an individual dies, he or she is not a senior but would have become a senior by the end of the calendar year in which he or she dies, the individual is eligible to claim a tax credit under this section for the taxation year that ends on the date of death.

52.01( 18) If, when an individual dies, he or she is a qualifying relation of another individual who is not a senior at that time but becomes a senior by the end of the calendar year in which the death occurs, the deceased individual is eligible to claim a tax credit under this section for the taxation year that ends on the date of death.

52.01( 19) If an individual is a qualifying relation of another individual who, immediately before death, is not a senior but who would have become a senior by the end of the calendar year in which he or she dies, the individual who is the qualifying relation is eligible to claim a tax credit under this section for a taxation year that ends in the calendar year as if the other individual had not died.

52.01( 20) Subsection 248(28) of the Federal Act applies for the purposes of this section.

52.01( 21) Despite paragraph 248(28)(b) of the Federal Act, an eligible individual may include the same qualifying expenditure for the purpose of his or her tax credit under this section and for the purpose of determining his or her entitlement to the tax credit under subsection 26(1).

52.01( 22) An individual who has claimed and is eligible for a tax credit under this section for a taxation year is deemed to have paid, at the time referred to in subsection 156.1(4) of the Federal Act, as that section relates to the taxation year, the amount of the credit on account of the individual’s tax payable under this Act.

7 Paragraph 53(1)(a) of the Act is amended by striking out “paragraph 117(2)(c)” and substituting “paragraph 117(2)(d)”.

8 Section 82 of the Act is amended by adding “(1.51) to (1.53),” after “(1.5),”.

9 Subsection 124(1) of the Act is amended by adding after paragraph (c) the following:

(c.01) excluding improvements for the purpose of paragraph (e) of the definition “qualifying renovation” in subsection 52.01(1);

10( 1) Sections 1, 2, 5, 6 and 9 of this Act shall be deemed to have come into force on January 1, 2015.

10( 2) Section 3 of this Act shall be deemed to have come into force on January 1, 2014.

10( 3) Section 4 of this Act shall be deemed to have come into force on February 28, 2004.

10( 4) Section 7 of this Act shall be deemed to have come into force on January 1, 2007.

10( 5) Section 8 of this Act shall be deemed to have come into force on June 26, 2013.