CRA illustrates the effective date of the passive income rules

New s. 125(5.1)(b), which eliminates the business limit of a Canadian-controlled private corporation if it or associated corporations had significant passive income (a.k.a. “aggregate investment income”) in their taxation years ending in the preceding calendar year, is stated to apply to taxation years that begin after 2018. This means that a calendar CCPC with an associated corporation (BCo ) with a November 30 year end must account, in its 2019 taxation year, for its own passive income for the preceding 2018 calendar taxation year and for the passive income of BCo for its year ending on November 30, 2018.

Neal Armstrong. Summary of 20 September 2018 External T.I. 2018-0771871E5 under s. 125(5.1)(b).