T1206 - fill out and auto calculate/complete form online

Canada Revenue
Agency

Agence du revenu
du Canada

Tax on Split Income – 2023

Protected B when completed

Before you complete this form, read the attached information section. Attach this form to your return.

Dispositions of certain capital property – shares subject to tax on split income (TOSI)

Complete this part if you (or a trust of which you are the beneficiary) disposed of shares to a person with whom you do not
deal at arm's length, and the dividends from those shares would be subject to TOSI.

Capital gain on dispositions in 2023

Amount of 2022 reserve (from line C of Form T1206 for 2022)

Amount of 2023 reserve (calculated below)

–

Line B minus line C (if negative, show in brackets)

►

Line A plus line D

Capital gains from box 21 of your T3 slip(s) (relating to dispositions in 2023)

Line E plus line F

If you were under 18 years of age at the end of the year, the amount at line G is deemed to be a dividend (other than
eligible dividend). Multiply the amount from line G by 1.15 and include this amount under "Taxable amount of dividends
(eligible and other than eligible)" on the Federal Worksheet, and on lines 12000 and 12010 of your return. In addition, enter
this amount on lines 1 and 2 as indicated in Part 1 on page 7. Do not include this amount on Schedule 3.

If you were 18 years of age or older in 2023, enter the amount from line G on the applicable line(s) of Schedule 3.
In addition, enter 50% of the amount from line G on line 3 in Part 1 on page 7.

Calculation of reserve

Complete this calculation and include the total amount of your 2023 reserve on line C above. You can claim a reserve up to a
maximum of four years for each disposition. Your reserve in each year cannot be more than whichever of the following two
calculations is less (use a separate sheet of paper for multiple dispositions):

Amount payable after the

(1)

Year

(i)

Capital gain

end of the year

of sale

after sale

Proceeds of

80%

1st year: 60%

disposition

2nd year: 40%

Applicable percentage for year

3rd year: 20%

(ii)

Capital gain

of sale or year after sale (1)

4th year: 0%

T1206 E(23)

(Ce formulaire est disponible en français.)

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Protected B when completed

Part 1 – TOSI-adjusted net income

Part of the taxable amount of dividends (eligible and other than eligible)

described in the information section received from taxable Canadian corporations

68330

Part of the taxable amount of dividends other than eligible dividends,

included on line 1, from taxable Canadian corporations

68340

All other split income (see "Split income" on page 1)

Total split income: line 1 plus line 3. Enter this amount on line 23200 of your return.

68360

Net income from line 23600 of your tax return

TOSI-adjusted net income: line 4 plus line 5 (see note below)

Note

Use the TOSI-adjusted net income from line 6 of this form in place of your net income from line 23600 to calculate the federal
amounts you can claim, if applicable, for the following amounts:

•

the basic personal amount on line 30000 of your tax return (use line 6 of this form at line 3 of your Federal Worksheet for
line 30000)

•

the age amount on line 30100 of your tax return (use line 6 of this form at line 2 of your Federal Worksheet for line 30100)

•

the refundable medical expenses supplement on line 45200 of your tax return (use line 6 of this form at line 1 of your Federal
Worksheet for line 45200)

•

the Canada workers benefit (CWB) on line 45300 of your tax return (use line 6 of this form at line 7 of column 1 of Schedule 6)

Also, add the amount from line 4 of this form to line 6 of your Federal Worksheet in the calculation of the social benefits
repayment for the calculation of lines 23500 and 42200 of your tax return, if applicable.

Use the TOSI-adjusted net income from line 6 of this form in place of your net income from line 23600 to calculate the
provincial and territorial amounts you can claim, if applicable, for the following amounts:

•

except for Nova Scotia, the age amount on Form 428 or Form 428MJ for all provinces and territories (use line 6 of this form at
line 2 of the calculation of line 58080 of your provincial or territorial worksheet)

•

the low income tax reductions on Form 428 or Form 428MJ for New Brunswick (use line 6 of this form at column 1 of line 68
of Form NB428 or line 34 of Form NB428MJ), for Prince Edward Island (use line 6 of this form at column 1 of line 70 of
Form PE428 or line 39 of Form PE428MJ), for British Columbia (use line 6 of this form at line 74 of Form BC428 or line 40 of
Form BC428MJ), and for Newfoundland and Labrador (use line 6 of this form at column 1 of line 88 of Form NL428 or line 52
of Form NL428MJ)

•

the sales tax credit and the British Columbia renter's tax credit on Form BC479 for British Columbia (use line 6 of this form at
column 1 of line 1 of Form BC479)

•

the Childcare access and relief from expenses tax credit for Ontario (use line 6 of this form at column 1 of line 1 of
Schedule ON479—A)

•

the Low-income individuals and families tax credit for Ontario (use line 6 of this form at line 6 of Schedule ON428—A or
Schedule ON428—A MJ)

•

Saskatchewan active families benefit (use line 6 of this form at column 1 of line 1 of Form SK479)

•

the Ontario seniors care at home tax credit (line 7 of Form ON479)

•

the family income calculation for Manitoba (column 1 of line 1 of Form MB479)

For more information and further instructions, see "TOSI-adjusted net income" on page 4.

T1206 E(23)

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Protected B when completed

Part 2 – Federal tax on split income

Calculation of line 42000 of your return

Total split income from line 4

Amount from line 7 multiplied by 33%

Enter this amount on line 40424 of your return.

Federal tax on split income

TOSI-adjusted taxable income

Amount from line 8

÷ 15% =

Use the amount from line 8A to adjust your taxable income for certain amounts.
For more information, see "TOSI-adjusted taxable income" on page 5.

Amount from line 41500 of your return

Line 8 plus line 9

Federal disability tax credit

Amount from line 31600

of your return

Amount from line 31800

of your return

Line 11 plus line 12

x 15% =

–

Line 10 minus line 14

Federal dividend tax credit on split income

Amount from line 1 of Part 1

Amount from line 2 of Part 1

–

x 9.0301% =

Line 16 minus line 17 (if negative, enter "0")

x 15.0198% =

Line 19 plus line 20

►

–

Line 15 minus line 21

Note

If the amount on line 22 is more than the amount on line 42900 of your return, use the amount on line 22
instead of the amount on line 42900 of your return when you calculate the refundable Quebec or Yukon
First Nations abatement and the federal surtax on income earned outside Canada.

Federal foreign tax credit on split income

Part of the amount on line 3

Amount from

that is from foreign sources

68370

line 40500 of

–

Total income from

68380

your return

foreign sources

Line 22 minus line 23 (if negative, enter "0")

Amount from line 40600 of your return

Amount from line 41600 of your return

–

Line 25 minus line 26 (if negative, enter "0")

Amount from line 41500 of your return

Line 27 plus line 28

Enter whichever is more: the amount from line 24 or line 29.

Add the amount from line 30 to the amount from line 41800 of your return, and enter the result on line 42000 of your return.

T1206 E(23)

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Protected B when completed

Part 3 – Provincial or territorial tax payable by an individual with split income

If you are not completing Form T2203, Provincial and Territorial Taxes for Multiple Jurisdictions, complete lines 31 to 52 only.
Enter your total split income from line 4 on line 31 below.

If you are completing Form T2203, Provincial and Territorial Taxes for Multiple Jurisdictions, do not complete lines 31 to 52.
Enter your total split income from line 4 on line 53 in Part 4, Tax on Split Income for Multiple Jurisdictions, and complete
lines 54 to 92.

Provincial or territorial tax on split income

Total split income from line 4

Tax rate that applies to your province or territory of residence from column 2 in Chart C on page 5

x 20.53%

The amount from line 31 multiplied by the tax rate you entered on line 32. Enter this amount on the

line of your Form 428 shown in column 4 in Chart C on page 5.

TOSI-adjusted taxable income

Amount from line 33

33A

Tax rate that applies to your province or territory from column 3 in

Chart C on page 5

÷ 5.05%

33B

Amount from line 33A divided by the tax rate you entered on line 33B.

33C

Use the amount from line 33C to adjust your taxable income for certain amounts. For more
information, see "TOSI-adjusted taxable income" on page 5.

Calculation of line 42800 of your return

Provincial or territorial disability tax credit (DTC)

DTC from line 58440 of your provincial or territorial Form 428

DTC transferred from a dependant from line 58480 of your provincial or

territorial Form 428

Line 34 plus line 35

Tax rate that applies to your province or territory from column 3 in Chart C

on page 5

x 5.05%

Amount from line 36 multiplied by the tax rate you entered on line 37

►

–

Line 33 minus line 38

Provincial or territorial dividend tax credit on split income for eligible
dividends and dividends other than eligible dividends

Amount from line 18

Eligible dividend tax credit rate that applies to
your province or territory from column 5 in

Chart C on page 5

x 10%

Amount from line 40 multiplied by the rate on line 41

►

Amount from line 17

Dividend other than eligible dividend tax credit
rate that applies to your province or territory from

column 6 in Chart C on page 5

x 2.9863%

Amount from line 43 multiplied by the rate on line 44

►

Line 42 plus line 45

►

–

Line 39 minus line 46

T1206 E(23)

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Part 3 – Provincial or territorial tax payable by an individual with split income (continued)

Provincial or territorial foreign tax credit on split income

Amount from line 47 on the previous page

Part of the amount from
line 68370 on page 8 that is

Amount from line number of your
Form 428 shown in column 7 in

non-business income

Chart C on page 5

–

Part of the amount from

The part of the amount from
line 68380 on page 8 that is
non-business income

Line 48 minus line 49

Amount from the line number of your Form 428 shown in column 8 of Chart C on page 5

Enter whichever is more: the amount from line 50 or line 51.

Enter the amount from line 52 on line 42800 of your return. (2)

(2) If you were a resident of Ontario, enter this amount on line 88 of Form ON428 and complete the remaining lines of that form.

continue on the next page.

T1206 E(23)

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