VIII, s. 43, c. 21, s. 471995, c. 3, s. 29, c. 21, s. 351998, c. 19, s. 1282000, c. 12, s. 1422001, c. 17, s. 802009, c. 2, s. 262010, c. 12, s. 102013, c. 34, ss. 11, 233, c. 40, s. 442016, c. 12, s. 362017, c. 33, s. 362022, c. 19, s. 14
(a)in the case of an employee life and health trust, an employee trust or a trust described in paragraph (a.1) of the definitiontrustin subsection 108(1),(i)the trust shall be deemed to have disposed of the property immediately before that time for proceeds of disposition equal to its fair market value at that time, and(ii)the taxpayer shall be deemed to have acquired the property at a cost equal to its fair market value at that time;(b)in the case of a trust governed by an employee benefit plan,(i)the trust shall be deemed to have disposed of the property for proceeds of disposition equal to its cost amount to the trust immediately before that time, and(ii)the taxpayer shall be deemed to have acquired the property at a cost equal to the greater of(A)its fair market value at that time, and(B)the adjusted cost base to the taxpayer of the taxpayer’s interest or part thereof, as the case may be, immediately before that time;(c)the taxpayer shall be deemed to have disposed of the taxpayer’s interest or part thereof, as the case may be, for proceeds of disposition equal to the adjusted cost base to the taxpayer of that interest or part thereof immediately before that time; and(d)where the property was depreciable property of a prescribed class of the trust and the amount that was the capital cost to the trust of that property exceeds the cost at which the taxpayer is deemed by this section to have acquired the property, for the purposes of sections 13 and 20 and any regulations made under paragraph 20(1)(a),(i)the capital cost to the taxpayer of the property shall be deemed to be the amount that was the capital cost of the property to the trust, and(ii)the excess shall be deemed to have been allowed to the taxpayer in respect of the property under regulations made under paragraph 20(1)(a) in computing income for taxation years before the acquisition by the taxpayer of the property.
(i)the trust shall be deemed to have disposed of the property immediately before that time for proceeds of disposition equal to its fair market value at that time, and(ii)the taxpayer shall be deemed to have acquired the property at a cost equal to its fair market value at that time;
(i)the trust shall be deemed to have disposed of the property for proceeds of disposition equal to its cost amount to the trust immediately before that time, and(ii)the taxpayer shall be deemed to have acquired the property at a cost equal to the greater of(A)its fair market value at that time, and(B)the adjusted cost base to the taxpayer of the taxpayer’s interest or part thereof, as the case may be, immediately before that time;
(A)its fair market value at that time, and(B)the adjusted cost base to the taxpayer of the taxpayer’s interest or part thereof, as the case may be, immediately before that time;
(i)the capital cost to the taxpayer of the property shall be deemed to be the amount that was the capital cost of the property to the trust, and(ii)the excess shall be deemed to have been allowed to the taxpayer in respect of the property under regulations made under paragraph 20(1)(a) in computing income for taxation years before the acquisition by the taxpayer of the property.
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]R.S., 1985, c. 1 (5th Supp.), s. 107.12001, c. 17, s. 812010, c. 25, s. 17
(a)the trust shall be deemed to have disposed of the property for proceeds of disposition equal to its fair market value at that time;(b)the trust shall be deemed to have paid to the taxpayer as a distribution an amount equal to that fair market value;(c)the taxpayer shall be deemed to have acquired the property at a cost equal to that fair market value;(d)the taxpayer shall be deemed to have disposed of the taxpayer’s interest or part thereof, as the case may be, for proceeds of disposition equal to the adjusted cost base to the taxpayer of that interest or part thereof immediately before that time; and(e)where the property was depreciable property of a prescribed class of the trust and the amount that was the capital cost to the trust of that property exceeds the cost at which the taxpayer is deemed by this section to have acquired the property, for the purposes of sections 13 and 20 and any regulations made under paragraph 20(1)(a),(i)the capital cost to the taxpayer of the property shall be deemed to be the amount that was the capital cost of the property to the trust, and(ii)the excess shall be deemed to have been allowed to the taxpayer in respect of the property under regulations made under paragraph 20(1)(a) in computing the taxpayer’s income for taxation years before the acquisition by the taxpayer of the property.
(i)the capital cost to the taxpayer of the property shall be deemed to be the amount that was the capital cost of the property to the trust, and(ii)the excess shall be deemed to have been allowed to the taxpayer in respect of the property under regulations made under paragraph 20(1)(a) in computing the taxpayer’s income for taxation years before the acquisition by the taxpayer of the property.
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]R.S., 1985, c. 1 (5th Supp.), s. 107.22013, c. 34, s. 234(F)
107.3(1)Where a taxpayer is a beneficiary under a qualifying environmental trust in a taxation year of the trust (in this subsection referred to as the “trust’s year”) that ends in a particular taxation year of the taxpayer,(a)subject to paragraph 107.3(1)(b), the taxpayer’s income, non-capital loss and net capital loss for the particular year shall be computed as if the amount of the income or loss of the trust for the trust’s year from any source or from sources in a particular place were the income or loss of the taxpayer from that source or from sources in that particular place for the particular year, to the extent of the portion thereof that can reasonably be considered to be the taxpayer’s share of such income or loss; and(b)if the taxpayer is non-resident at any time in the particular year and an income or loss described in paragraph 107.3(1)(a) or an amount to which paragraph 12(1)(z.1) or (z.2) applies would not otherwise be included in computing the taxpayer’s taxable income or taxable income earned in Canada, as the case may be, notwithstanding any other provision of this Act, the income, the loss or the amount shall be attributed to the carrying on of business in Canada by the taxpayer through a fixed place of business located in the province in which the site to which the trust relates is situated.Marginal note:Transfers to beneficiaries(2)Where property of a qualifying environmental trust is transferred at any time to a beneficiary under the trust in satisfaction of all or any part of the beneficiary’s interest as a beneficiary under the trust,(a)the trust shall be deemed to have disposed of the property at that time for proceeds of disposition equal to its fair market value at that time; and(b)the beneficiary shall be deemed to have acquired the property at that time at a cost equal to its fair market value at that time.Marginal note:Ceasing to be qualifying environmental trust(3)If at any time a trust ceases to be a qualifying environmental trust,(a)for the purposes of subsections 111(5.5) and 149(10), the trust is deemed to cease at that time to be exempt from tax under this Part on its taxable income;(b)each beneficiary under the trust immediately before that time is deemed to receive at that time from the trust an amount equal to the percentage of the fair market value of the properties of the trust immediately after that time that can reasonably be considered to be the beneficiary’s interest in the trust; and(c)each beneficiary under the trust is deemed to acquire immediately after that time an interest in the trust at a cost equal to the amount deemed by paragraph (b) to be received by the beneficiary from the trust.Marginal note:Application(4)Subsection 104(13) and sections 105 to 107 do not apply to a trust with respect to a taxation year during which it is a qualifying environmental trust.
(a)subject to paragraph 107.3(1)(b), the taxpayer’s income, non-capital loss and net capital loss for the particular year shall be computed as if the amount of the income or loss of the trust for the trust’s year from any source or from sources in a particular place were the income or loss of the taxpayer from that source or from sources in that particular place for the particular year, to the extent of the portion thereof that can reasonably be considered to be the taxpayer’s share of such income or loss; and(b)if the taxpayer is non-resident at any time in the particular year and an income or loss described in paragraph 107.3(1)(a) or an amount to which paragraph 12(1)(z.1) or (z.2) applies would not otherwise be included in computing the taxpayer’s taxable income or taxable income earned in Canada, as the case may be, notwithstanding any other provision of this Act, the income, the loss or the amount shall be attributed to the carrying on of business in Canada by the taxpayer through a fixed place of business located in the province in which the site to which the trust relates is situated.
(a)the trust shall be deemed to have disposed of the property at that time for proceeds of disposition equal to its fair market value at that time; and(b)the beneficiary shall be deemed to have acquired the property at that time at a cost equal to its fair market value at that time.
(a)for the purposes of subsections 111(5.5) and 149(10), the trust is deemed to cease at that time to be exempt from tax under this Part on its taxable income;(b)each beneficiary under the trust immediately before that time is deemed to receive at that time from the trust an amount equal to the percentage of the fair market value of the properties of the trust immediately after that time that can reasonably be considered to be the beneficiary’s interest in the trust; and(c)each beneficiary under the trust is deemed to acquire immediately after that time an interest in the trust at a cost equal to the amount deemed by paragraph (b) to be received by the beneficiary from the trust.
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]1995, c. 3, s. 301998, c. 19, s. 182013, c. 40, s. 45
107.4(1)In this section, aqualifying dispositionof a property means a disposition of the property before December 21, 2002 by a person or partnership, and a disposition of property after December 20, 2002 by an individual, (which person, partnership or individual is referred to in this subsection as the “contributor”) as a result of a transfer of the property to a particular trust where(a)the disposition does not result in a change in the beneficial ownership of the property;(b)the proceeds of disposition would, if this Act were read without reference to this section and sections 69 and 73, not be determined under any provision of this Act;(c)the particular trust is resident in Canada at the time of the transfer;(d)[Repealed, 2013, c. 34, s. 235](e)unless the contributor is a trust, there is immediately after the disposition no absolute or contingent right of a person or partnership (other than the contributor or, where the property was co-owned, each of the joint contributors) as a beneficiary (determined with reference to subsection 104(1.1)) under the particular trust;(f)the contributor is not an individual (other than a trust described in any of paragraphs (a) to (e.1) of the definitiontrustin subsection 108(1)), if the particular trust is described in any of paragraphs (a) to (e.1) of the definitiontrustin subsection 108(1);(g)the disposition is not part of a series of transactions or events(i)that begins after December 17, 1999 and that includes the subsequent acquisition, for consideration given to a personal trust, of a capital interest or an income interest in the trust,(ii)that begins after December 17, 1999 and that includes the disposition of all or part of a capital interest or an income interest in a personal trust, other than a disposition solely as a consequence of a distribution from a trust to a person or partnership in satisfaction of all or part of that interest, or(iii)that begins after June 5, 2000 and that includes the transfer to the particular trust of particular property as consideration for the acquisition of a capital interest in the particular trust, if the particular property can reasonably be considered to have been received by the particular trust in order to fund a distribution (other than a distribution that is proceeds of disposition of a capital interest in the particular trust);(h)the disposition is not, and is not part of, a transaction(i)that occurs after December 17, 1999, and(ii)that includes the giving to the contributor, for the disposition, of any consideration (other than consideration that is an interest of the contributor as a beneficiary under the particular trust or that is the assumption by the particular trust of debt for which the property can, at the time of the disposition, reasonably be considered to be security);(i)subsection 73(1) does not apply to the disposition and would not apply to the disposition if(i)no election had been made under that subsection, and(ii)section 73 were read without reference to subsection 73(1.02); and(j)if the contributor is an amateur athlete trust, a cemetery care trust, an employee life and health trust, an employee trust, a trust deemed by subsection 143(1) to exist in respect of a congregation that is a constituent part of a religious organization, a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)), a trust described in paragraph 149(1)(o.4) or a trust governed by an eligible funeral arrangement, an employees profit sharing plan, a registered disability savings plan, a registered education savings plan, a registered supplementary unemployment benefit plan or a TFSA, the particular trust is the same type of trust.Marginal note:Application of paragraph (1)(a)(2)For the purpose of paragraph (1)(a),(a)except where paragraph (b) applies, where a trust (in this paragraph and subsection (2.1) referred to as the “transferor trust”), in a period that does not exceed one day, disposes of one or more properties in the period to one or more other trusts, there is deemed to be no resulting change in the beneficial ownership of those properties if(i)the transferor trust receives no consideration for the disposition, and(ii)as a consequence of the disposition, the value of each beneficiary’s beneficial ownership at the beginning of the period under the transferor trust in each particular property of the transferor trust (or group of two or more properties of the transferor trust that are identical to each other) is the same as the value of the beneficiary’s beneficial ownership at the end of the period under the transferor trust and the other trust or trusts in each particular property (or in property that was immediately before the disposition included in the group of identical properties referred to above); and(b)where a trust (in this paragraph referred to as the “transferor”) governed by a registered retirement savings plan or by a registered retirement income fund transfers a property to a trust (in this paragraph referred to as the “transferee”) governed by a registered retirement savings plan or by a registered retirement income fund, the transfer is deemed not to result in a change in the beneficial ownership of the property if the annuitant of the plan or fund that governs the transferor is also the annuitant of the plan or fund that governs the transferee.Marginal note:Fractional interests(2.1)For the purpose of applying paragraph (2)(a) in respect of a transfer by a transferor trust of property that includes a share and money, the other trust or trusts referred to in that paragraph may receive, in lieu of a transfer of a fractional interest in a share that would otherwise be required, a disproportionate amount of money or interest in the share (the value of which does not exceed the lesser of $200 and the fair market value of the fractional interest).Marginal note:Tax consequences of qualifying dispositions(3)Where at a particular time there is a qualifying disposition of a property by a person or partnership (in this subsection referred to as the “transferor”) to a trust (in this subsection referred to as the “transferee trust”),(a)the transferor’s proceeds of disposition of the property are deemed to be(i)where the transferor so elects in writing and files the election with the Minister on or before the transferor’s filing-due date for its taxation year that includes the particular time, or at any later time that is acceptable to the Minister, the amount specified in the election that is not less than the cost amount to the transferor of the property immediately before the particular time and not more than the fair market value of the property at the particular time, and(ii)in any other case, the cost amount to the transferor of the property immediately before the particular time;(b)the transferee trust’s cost of the property is deemed to be the amount, if any, by which(i)the proceeds determined under paragraph (a) in respect of the qualifying dispositionexceed(ii)the amount by which the transferor’s loss otherwise determined from the qualifying disposition would be reduced because of subsection 100(4), paragraph 107(1)(c) or (d) or any of subsections 112(3) to (4.2), if the proceeds determined under paragraph (a) were equal to the fair market value of the property at the particular time;(c)[Repealed, 2005, c. 30, s. 4](d)if the property was depreciable property of a prescribed class of the transferor and its capital cost to the transferor exceeds the cost at which the transferee trust is deemed by this subsection to have acquired the property, for the purposes of sections 13 and 20 and any regulations made for the purpose of paragraph 20(1)(a),(i)the capital cost of the property to the transferee trust is deemed to be the amount that was the capital cost of the property to the transferor, and(ii)the excess is deemed to have been allowed to the transferee trust in respect of the property under regulations made for the purpose of paragraph 20(1)(a) in computing income for taxation years that ended before the particular time;(e)[Repealed, 2016, c. 12, s. 37](f)if, as a result of a transaction or event, the property was deemed to be taxable Canadian property of the transferor by this paragraph or any of paragraphs 44.1(2)(c), 51(1)(f), 85(1)(i) and 85.1(1)(a), subsection 85.1(5), paragraph 85.1(8)(b), subsections 87(4) and (5) and paragraphs 97(2)(c) and 107(3.1)(d), the property is also deemed to be, at any time that is within 60 months after the transaction or event, taxable Canadian property of the transferee trust;(g)where the transferor is a related segregated fund trust (in this paragraph having the meaning assigned by section 138.1),(i)paragraph 138.1(1)(i) does not apply in respect of a disposition of an interest in the transferor that occurs in connection with the qualifying disposition, and(ii)in computing the amount determined under paragraph 138.1(1)(i) in respect of a subsequent disposition of an interest in the transferee trust where the interest is deemed to exist in connection with a particular life insurance policy, the acquisition fee (as defined by subsection 138.1(6)) in respect of the particular policy shall be determined as if each amount determined under any of paragraphs 138.1(6)(a) to (d) in respect of the policyholder’s interest in the transferor had been determined in respect of the policyholder’s interest in the transferee trust;(h)if the transferor is a trust to which property had been transferred by an individual (other than a trust),(i)where subsection 73(1) applied in respect of the property so transferred and it is reasonable to consider that the property was so transferred in anticipation of the individual ceasing to be resident in Canada, for the purposes of paragraph 104(4)(a.3) and the application of this paragraph to a disposition by the transferee trust after the particular time, the transferee trust is deemed after the particular time to be a trust to which the individual had transferred property in anticipation of the individual ceasing to reside in Canada and in circumstances to which subsection 73(1) applied, and(ii)for the purposes of paragraph (j) of the definitionexcluded right or interestin subsection 128.1(10) and the application of this paragraph to a disposition by the transferee trust after the particular time, where the property so transferred was transferred in circumstances to which this subsection would apply if subsection (1) were read without reference to paragraphs (1)(h) and (i), the transferee trust is deemed after the particular time to be a trust an interest in which was acquired by the individual as a consequence of a qualifying disposition;(i)if the transferor is a trust (other than a personal trust or a trust prescribed for the purposes of subsection 107(2)), the transferee trust is deemed to be neither a personal trust nor a trust prescribed for the purposes of subsection 107(2);(j)if the transferor is a trust and a taxpayer disposes of all or part of a capital interest in the transferor because of the qualifying disposition and, as a consequence, acquires a capital interest or part of it in the transferee trust(i)the taxpayer is deemed to dispose of the capital interest or part of it in the transferor for proceeds equal to the cost amount to the taxpayer of that interest or part of it immediately before the particular time, and(ii)the taxpayer is deemed to acquire the capital interest or part of it in the transferee trust at a cost equal to the amount, if any, by which(A)that cost amountexceeds(B)the amount by which the taxpayer’s loss otherwise determined from the disposition referred to in subparagraph (i) would be reduced because of paragraph 107(1)(c) or (d) if the proceeds under that subparagraph were equal to the fair market value of the capital interest or part of it in the transferor immediately before the particular time;(k)where the transferor is a trust, a taxpayer’s beneficial ownership in the property ceases to be derived from the taxpayer’s capital interest in the transferor because of the qualifying disposition and no part of the taxpayer’s capital interest in the transferor was disposed of because of the qualifying disposition, there shall, immediately after the particular time, be added to the cost otherwise determined of the taxpayer’s capital interest in the transferee trust, the amount determined by the formulaA × [(B - C)/B] - DwhereAis the cost amount to the taxpayer of the taxpayer’s capital interest in the transferor immediately before the particular time,Bis the fair market value immediately before the particular time of the taxpayer’s capital interest in the transferor,Cis the fair market value at the particular time of the taxpayer’s capital interest in the transferor (determined as if the only property disposed of at the particular time were the particular property), andDis the lesser of(i)the amount, if any, by which the cost amount to the taxpayer of the taxpayer’s capital interest in the transferor immediately before the particular time exceeds the fair market value of the taxpayer’s capital interest in the transferor immediately before the particular time, and(ii)the maximum amount by which the taxpayer’s loss from a disposition of a capital interest otherwise determined could have been reduced because of paragraph 107(1)(c) or (d) if the taxpayer’s capital interest in the transferor had been disposed of immediately before the particular time;(l)where paragraph (k) applies to the qualifying disposition in respect of a taxpayer, the amount that would be determined under that paragraph in respect of the qualifying disposition if the amount determined for D in that paragraph were nil shall, immediately after the particular time, be deducted in computing the cost otherwise determined of the taxpayer’s capital interest in the transferor;(m)where paragraphs (j) and (k) do not apply in respect of the qualifying disposition, the transferor is deemed to acquire the capital interest or part of it in the transferee trust that is acquired as a consequence of the qualifying disposition(i)where the transferee trust is a personal trust, at a cost equal to nil, and(ii)in any other case, at a cost equal to the excess determined under paragraph (b) in respect of the qualifying disposition; and(n)if the transferor is a trust and a taxpayer disposes of all or part of an income interest in the transferor because of the qualifying disposition and, as a consequence, acquires an income interest or a part of an income interest in the transferee trust, for the purpose of subsection 106(2), the taxpayer is deemed not to dispose of any part of the income interest in the transferor at the particular time.Marginal note:Fair market value of vested interest in trust(4)Where(a)a particular capital interest in a trust is held by a beneficiary at any time,(b)the particular interest is vested indefeasibly at that time,(c)the trust is not described in any of paragraphs (a) to (e.1) of the definitiontrustin subsection 108(1), and(d)interests under the trust are not ordinarily disposed of for consideration that reflects the fair market value of the net assets of the trust,the fair market value of the particular interest at that time is deemed to be not less than the amount determined by the formula(A - B) × (C/D)whereAis the total fair market value at that time of all properties of the trust,Bis the total of all amounts each of which is the amount of a debt owing by the trust at that time or the amount of any other obligation of the trust to pay any amount that is outstanding at that time,Cis the fair market value at that time of the particular interest (determined without reference to this subsection), andDis the total fair market value at that time of all interests as beneficiaries under the trust (determined without reference to this subsection).
(a)the disposition does not result in a change in the beneficial ownership of the property;(b)the proceeds of disposition would, if this Act were read without reference to this section and sections 69 and 73, not be determined under any provision of this Act;(c)the particular trust is resident in Canada at the time of the transfer;(d)[Repealed, 2013, c. 34, s. 235](e)unless the contributor is a trust, there is immediately after the disposition no absolute or contingent right of a person or partnership (other than the contributor or, where the property was co-owned, each of the joint contributors) as a beneficiary (determined with reference to subsection 104(1.1)) under the particular trust;(f)the contributor is not an individual (other than a trust described in any of paragraphs (a) to (e.1) of the definitiontrustin subsection 108(1)), if the particular trust is described in any of paragraphs (a) to (e.1) of the definitiontrustin subsection 108(1);(g)the disposition is not part of a series of transactions or events(i)that begins after December 17, 1999 and that includes the subsequent acquisition, for consideration given to a personal trust, of a capital interest or an income interest in the trust,(ii)that begins after December 17, 1999 and that includes the disposition of all or part of a capital interest or an income interest in a personal trust, other than a disposition solely as a consequence of a distribution from a trust to a person or partnership in satisfaction of all or part of that interest, or(iii)that begins after June 5, 2000 and that includes the transfer to the particular trust of particular property as consideration for the acquisition of a capital interest in the particular trust, if the particular property can reasonably be considered to have been received by the particular trust in order to fund a distribution (other than a distribution that is proceeds of disposition of a capital interest in the particular trust);(h)the disposition is not, and is not part of, a transaction(i)that occurs after December 17, 1999, and(ii)that includes the giving to the contributor, for the disposition, of any consideration (other than consideration that is an interest of the contributor as a beneficiary under the particular trust or that is the assumption by the particular trust of debt for which the property can, at the time of the disposition, reasonably be considered to be security);(i)subsection 73(1) does not apply to the disposition and would not apply to the disposition if(i)no election had been made under that subsection, and(ii)section 73 were read without reference to subsection 73(1.02); and(j)if the contributor is an amateur athlete trust, a cemetery care trust, an employee life and health trust, an employee trust, a trust deemed by subsection 143(1) to exist in respect of a congregation that is a constituent part of a religious organization, a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)), a trust described in paragraph 149(1)(o.4) or a trust governed by an eligible funeral arrangement, an employees profit sharing plan, a registered disability savings plan, a registered education savings plan, a registered supplementary unemployment benefit plan or a TFSA, the particular trust is the same type of trust.
(i)that begins after December 17, 1999 and that includes the subsequent acquisition, for consideration given to a personal trust, of a capital interest or an income interest in the trust,(ii)that begins after December 17, 1999 and that includes the disposition of all or part of a capital interest or an income interest in a personal trust, other than a disposition solely as a consequence of a distribution from a trust to a person or partnership in satisfaction of all or part of that interest, or(iii)that begins after June 5, 2000 and that includes the transfer to the particular trust of particular property as consideration for the acquisition of a capital interest in the particular trust, if the particular property can reasonably be considered to have been received by the particular trust in order to fund a distribution (other than a distribution that is proceeds of disposition of a capital interest in the particular trust);
(i)that occurs after December 17, 1999, and(ii)that includes the giving to the contributor, for the disposition, of any consideration (other than consideration that is an interest of the contributor as a beneficiary under the particular trust or that is the assumption by the particular trust of debt for which the property can, at the time of the disposition, reasonably be considered to be security);
(i)no election had been made under that subsection, and(ii)section 73 were read without reference to subsection 73(1.02); and
(a)except where paragraph (b) applies, where a trust (in this paragraph and subsection (2.1) referred to as the “transferor trust”), in a period that does not exceed one day, disposes of one or more properties in the period to one or more other trusts, there is deemed to be no resulting change in the beneficial ownership of those properties if(i)the transferor trust receives no consideration for the disposition, and(ii)as a consequence of the disposition, the value of each beneficiary’s beneficial ownership at the beginning of the period under the transferor trust in each particular property of the transferor trust (or group of two or more properties of the transferor trust that are identical to each other) is the same as the value of the beneficiary’s beneficial ownership at the end of the period under the transferor trust and the other trust or trusts in each particular property (or in property that was immediately before the disposition included in the group of identical properties referred to above); and(b)where a trust (in this paragraph referred to as the “transferor”) governed by a registered retirement savings plan or by a registered retirement income fund transfers a property to a trust (in this paragraph referred to as the “transferee”) governed by a registered retirement savings plan or by a registered retirement income fund, the transfer is deemed not to result in a change in the beneficial ownership of the property if the annuitant of the plan or fund that governs the transferor is also the annuitant of the plan or fund that governs the transferee.
(i)the transferor trust receives no consideration for the disposition, and(ii)as a consequence of the disposition, the value of each beneficiary’s beneficial ownership at the beginning of the period under the transferor trust in each particular property of the transferor trust (or group of two or more properties of the transferor trust that are identical to each other) is the same as the value of the beneficiary’s beneficial ownership at the end of the period under the transferor trust and the other trust or trusts in each particular property (or in property that was immediately before the disposition included in the group of identical properties referred to above); and
(a)the transferor’s proceeds of disposition of the property are deemed to be(i)where the transferor so elects in writing and files the election with the Minister on or before the transferor’s filing-due date for its taxation year that includes the particular time, or at any later time that is acceptable to the Minister, the amount specified in the election that is not less than the cost amount to the transferor of the property immediately before the particular time and not more than the fair market value of the property at the particular time, and(ii)in any other case, the cost amount to the transferor of the property immediately before the particular time;(b)the transferee trust’s cost of the property is deemed to be the amount, if any, by which(i)the proceeds determined under paragraph (a) in respect of the qualifying dispositionexceed(ii)the amount by which the transferor’s loss otherwise determined from the qualifying disposition would be reduced because of subsection 100(4), paragraph 107(1)(c) or (d) or any of subsections 112(3) to (4.2), if the proceeds determined under paragraph (a) were equal to the fair market value of the property at the particular time;(c)[Repealed, 2005, c. 30, s. 4](d)if the property was depreciable property of a prescribed class of the transferor and its capital cost to the transferor exceeds the cost at which the transferee trust is deemed by this subsection to have acquired the property, for the purposes of sections 13 and 20 and any regulations made for the purpose of paragraph 20(1)(a),(i)the capital cost of the property to the transferee trust is deemed to be the amount that was the capital cost of the property to the transferor, and(ii)the excess is deemed to have been allowed to the transferee trust in respect of the property under regulations made for the purpose of paragraph 20(1)(a) in computing income for taxation years that ended before the particular time;(e)[Repealed, 2016, c. 12, s. 37](f)if, as a result of a transaction or event, the property was deemed to be taxable Canadian property of the transferor by this paragraph or any of paragraphs 44.1(2)(c), 51(1)(f), 85(1)(i) and 85.1(1)(a), subsection 85.1(5), paragraph 85.1(8)(b), subsections 87(4) and (5) and paragraphs 97(2)(c) and 107(3.1)(d), the property is also deemed to be, at any time that is within 60 months after the transaction or event, taxable Canadian property of the transferee trust;(g)where the transferor is a related segregated fund trust (in this paragraph having the meaning assigned by section 138.1),(i)paragraph 138.1(1)(i) does not apply in respect of a disposition of an interest in the transferor that occurs in connection with the qualifying disposition, and(ii)in computing the amount determined under paragraph 138.1(1)(i) in respect of a subsequent disposition of an interest in the transferee trust where the interest is deemed to exist in connection with a particular life insurance policy, the acquisition fee (as defined by subsection 138.1(6)) in respect of the particular policy shall be determined as if each amount determined under any of paragraphs 138.1(6)(a) to (d) in respect of the policyholder’s interest in the transferor had been determined in respect of the policyholder’s interest in the transferee trust;(h)if the transferor is a trust to which property had been transferred by an individual (other than a trust),(i)where subsection 73(1) applied in respect of the property so transferred and it is reasonable to consider that the property was so transferred in anticipation of the individual ceasing to be resident in Canada, for the purposes of paragraph 104(4)(a.3) and the application of this paragraph to a disposition by the transferee trust after the particular time, the transferee trust is deemed after the particular time to be a trust to which the individual had transferred property in anticipation of the individual ceasing to reside in Canada and in circumstances to which subsection 73(1) applied, and(ii)for the purposes of paragraph (j) of the definitionexcluded right or interestin subsection 128.1(10) and the application of this paragraph to a disposition by the transferee trust after the particular time, where the property so transferred was transferred in circumstances to which this subsection would apply if subsection (1) were read without reference to paragraphs (1)(h) and (i), the transferee trust is deemed after the particular time to be a trust an interest in which was acquired by the individual as a consequence of a qualifying disposition;(i)if the transferor is a trust (other than a personal trust or a trust prescribed for the purposes of subsection 107(2)), the transferee trust is deemed to be neither a personal trust nor a trust prescribed for the purposes of subsection 107(2);(j)if the transferor is a trust and a taxpayer disposes of all or part of a capital interest in the transferor because of the qualifying disposition and, as a consequence, acquires a capital interest or part of it in the transferee trust(i)the taxpayer is deemed to dispose of the capital interest or part of it in the transferor for proceeds equal to the cost amount to the taxpayer of that interest or part of it immediately before the particular time, and(ii)the taxpayer is deemed to acquire the capital interest or part of it in the transferee trust at a cost equal to the amount, if any, by which(A)that cost amountexceeds(B)the amount by which the taxpayer’s loss otherwise determined from the disposition referred to in subparagraph (i) would be reduced because of paragraph 107(1)(c) or (d) if the proceeds under that subparagraph were equal to the fair market value of the capital interest or part of it in the transferor immediately before the particular time;(k)where the transferor is a trust, a taxpayer’s beneficial ownership in the property ceases to be derived from the taxpayer’s capital interest in the transferor because of the qualifying disposition and no part of the taxpayer’s capital interest in the transferor was disposed of because of the qualifying disposition, there shall, immediately after the particular time, be added to the cost otherwise determined of the taxpayer’s capital interest in the transferee trust, the amount determined by the formulaA × [(B - C)/B] - DwhereAis the cost amount to the taxpayer of the taxpayer’s capital interest in the transferor immediately before the particular time,Bis the fair market value immediately before the particular time of the taxpayer’s capital interest in the transferor,Cis the fair market value at the particular time of the taxpayer’s capital interest in the transferor (determined as if the only property disposed of at the particular time were the particular property), andDis the lesser of(i)the amount, if any, by which the cost amount to the taxpayer of the taxpayer’s capital interest in the transferor immediately before the particular time exceeds the fair market value of the taxpayer’s capital interest in the transferor immediately before the particular time, and(ii)the maximum amount by which the taxpayer’s loss from a disposition of a capital interest otherwise determined could have been reduced because of paragraph 107(1)(c) or (d) if the taxpayer’s capital interest in the transferor had been disposed of immediately before the particular time;(l)where paragraph (k) applies to the qualifying disposition in respect of a taxpayer, the amount that would be determined under that paragraph in respect of the qualifying disposition if the amount determined for D in that paragraph were nil shall, immediately after the particular time, be deducted in computing the cost otherwise determined of the taxpayer’s capital interest in the transferor;(m)where paragraphs (j) and (k) do not apply in respect of the qualifying disposition, the transferor is deemed to acquire the capital interest or part of it in the transferee trust that is acquired as a consequence of the qualifying disposition(i)where the transferee trust is a personal trust, at a cost equal to nil, and(ii)in any other case, at a cost equal to the excess determined under paragraph (b) in respect of the qualifying disposition; and(n)if the transferor is a trust and a taxpayer disposes of all or part of an income interest in the transferor because of the qualifying disposition and, as a consequence, acquires an income interest or a part of an income interest in the transferee trust, for the purpose of subsection 106(2), the taxpayer is deemed not to dispose of any part of the income interest in the transferor at the particular time.
(i)where the transferor so elects in writing and files the election with the Minister on or before the transferor’s filing-due date for its taxation year that includes the particular time, or at any later time that is acceptable to the Minister, the amount specified in the election that is not less than the cost amount to the transferor of the property immediately before the particular time and not more than the fair market value of the property at the particular time, and(ii)in any other case, the cost amount to the transferor of the property immediately before the particular time;
(i)the proceeds determined under paragraph (a) in respect of the qualifying disposition
(ii)the amount by which the transferor’s loss otherwise determined from the qualifying disposition would be reduced because of subsection 100(4), paragraph 107(1)(c) or (d) or any of subsections 112(3) to (4.2), if the proceeds determined under paragraph (a) were equal to the fair market value of the property at the particular time;
(i)the capital cost of the property to the transferee trust is deemed to be the amount that was the capital cost of the property to the transferor, and(ii)the excess is deemed to have been allowed to the transferee trust in respect of the property under regulations made for the purpose of paragraph 20(1)(a) in computing income for taxation years that ended before the particular time;
(i)paragraph 138.1(1)(i) does not apply in respect of a disposition of an interest in the transferor that occurs in connection with the qualifying disposition, and(ii)in computing the amount determined under paragraph 138.1(1)(i) in respect of a subsequent disposition of an interest in the transferee trust where the interest is deemed to exist in connection with a particular life insurance policy, the acquisition fee (as defined by subsection 138.1(6)) in respect of the particular policy shall be determined as if each amount determined under any of paragraphs 138.1(6)(a) to (d) in respect of the policyholder’s interest in the transferor had been determined in respect of the policyholder’s interest in the transferee trust;
(i)where subsection 73(1) applied in respect of the property so transferred and it is reasonable to consider that the property was so transferred in anticipation of the individual ceasing to be resident in Canada, for the purposes of paragraph 104(4)(a.3) and the application of this paragraph to a disposition by the transferee trust after the particular time, the transferee trust is deemed after the particular time to be a trust to which the individual had transferred property in anticipation of the individual ceasing to reside in Canada and in circumstances to which subsection 73(1) applied, and(ii)for the purposes of paragraph (j) of the definitionexcluded right or interestin subsection 128.1(10) and the application of this paragraph to a disposition by the transferee trust after the particular time, where the property so transferred was transferred in circumstances to which this subsection would apply if subsection (1) were read without reference to paragraphs (1)(h) and (i), the transferee trust is deemed after the particular time to be a trust an interest in which was acquired by the individual as a consequence of a qualifying disposition;
(i)the taxpayer is deemed to dispose of the capital interest or part of it in the transferor for proceeds equal to the cost amount to the taxpayer of that interest or part of it immediately before the particular time, and(ii)the taxpayer is deemed to acquire the capital interest or part of it in the transferee trust at a cost equal to the amount, if any, by which(A)that cost amountexceeds(B)the amount by which the taxpayer’s loss otherwise determined from the disposition referred to in subparagraph (i) would be reduced because of paragraph 107(1)(c) or (d) if the proceeds under that subparagraph were equal to the fair market value of the capital interest or part of it in the transferor immediately before the particular time;
(A)that cost amount
(B)the amount by which the taxpayer’s loss otherwise determined from the disposition referred to in subparagraph (i) would be reduced because of paragraph 107(1)(c) or (d) if the proceeds under that subparagraph were equal to the fair market value of the capital interest or part of it in the transferor immediately before the particular time;
(i)the amount, if any, by which the cost amount to the taxpayer of the taxpayer’s capital interest in the transferor immediately before the particular time exceeds the fair market value of the taxpayer’s capital interest in the transferor immediately before the particular time, and(ii)the maximum amount by which the taxpayer’s loss from a disposition of a capital interest otherwise determined could have been reduced because of paragraph 107(1)(c) or (d) if the taxpayer’s capital interest in the transferor had been disposed of immediately before the particular time;
(i)where the transferee trust is a personal trust, at a cost equal to nil, and(ii)in any other case, at a cost equal to the excess determined under paragraph (b) in respect of the qualifying disposition; and
(a)a particular capital interest in a trust is held by a beneficiary at any time,(b)the particular interest is vested indefeasibly at that time,(c)the trust is not described in any of paragraphs (a) to (e.1) of the definitiontrustin subsection 108(1), and(d)interests under the trust are not ordinarily disposed of for consideration that reflects the fair market value of the net assets of the trust,
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]2001, c. 17, s. 822005, c. 30, s. 42007, c. 35, s. 1092008, c. 28, s. 102009, c. 2, s. 272010, c. 12, s. 11, c. 25, s. 182013, c. 34, s. 2352014, c. 39, s. 272016, c. 12, s. 37
108(1)In this Subdivision,accumulating incomeaccumulating incomeof a trust for a taxation year means the amount that would be the income of the trust for the year if that amount were computed(a)without reference to paragraphs 104(4)(a) and (a.1) and subsections 104(5.1), (5.2) and (12) and 107(4),(b)as if the greatest amount that the trust was entitled to claim under subsection 104(6) in computing its income for the year were so claimed, and(c)without reference to subsection 12(10.2), except to the extent that that subsection applies to amounts paid to a trust to which paragraph 70(6.1)(b) applies and before the death of the spouse or common-law partner referred to in that paragraph; (revenu accumulé)beneficiarybeneficiaryunder a trust includes a person beneficially interested therein; (bénéficiaire)capital interestcapital interestof a taxpayer in a trust means all rights of the taxpayer as a beneficiary under the trust, and after 1999 includes a right (other than a right acquired before 2000 and disposed of before March 2000) to enforce payment of an amount by the trust that arises as a consequence of any such right, but does not include an income interest in the trust; (participation au capital)cost amountcost amountto a taxpayer at any time of a capital interest or part of it, as the case may be, in a trust, means (notwithstanding subsection 248(1) and except for the purposes of subsection 107(3.1) and section 107.4 and except in respect of a capital interest in a trust that is at that time a foreign affiliate of the taxpayer),(a)where any money or other property of the trust has been distributed by the trust to the taxpayer in satisfaction of all or part of the taxpayer’s capital interest (whether on the winding-up of the trust or otherwise), the total of(i)the money so distributed, and(ii)all amounts each of which is the cost amount to the trust, immediately before the distribution, of each such other property,(a.1)where that time (in this paragraph referred to as the “particular time”) is immediately before the time that is immediately before the time of the death of the taxpayer and subsection 104(4) or (5) deems the trust to dispose of property at the end of the day that includes the particular time, the amount that would be determined under paragraph (b) if the taxpayer had died on a day that ended immediately before the time that is immediately before the particular time, and(b)in any other case, the amount determined by the formula(A - B) × C/DwhereAis the total of(i)all money of the trust on hand immediately before that time, and(ii)all amounts each of which is the cost amount to the trust, immediately before that time, of each other property of the trust,Bis the total of all amounts each of which is the amount of any debt owing by the trust, or of any other obligation of the trust to pay any amount, that was outstanding immediately before that time,Cis the fair market value at that time of the capital interest or part thereof, as the case may be, in the trust, andDis the fair market value at that time of all capital interests in the trust; (coût indiqué)eligible offseteligible offsetat any time of a taxpayer in respect of all or part of the taxpayer’s capital interest in a trust is the portion of any debt or obligation that is assumed by the taxpayer and that can reasonably be considered to be applicable to property distributed at that time in satisfaction of the interest or part of the interest, as the case may be, if the distribution is conditional upon the assumption by the taxpayer of the portion of the debt or obligation; (montant de réduction admissible)eligible real property gaineligible real property gain[Repealed, 1995, c. 3, s. 31]eligible real property losseligible real property loss[Repealed, 1995, c. 3, s. 31]eligible taxable capital gains,eligible taxable capital gains,of a trust for a taxation year, means the lesser of(a)its annual gains limit (within the meaning assigned by subsection 110.6(1)) for the year, and(b)the amount determined by the formulaA - BwhereAis its cumulative gains limit (within the meaning assigned by subsection 110.6(1)) at the end of the year, andBis the total of all amounts designated under subsection 104(21.2) by the trust in respect of beneficiaries for taxation years before that year; (gains en capital imposables admissibles)excluded propertyexcluded property, of a trust, means property owned by the trust at, and distributed by the trust after, the end of 2016, if(a)the trust is not in its first taxation year that begins after 2016 a trust described in subparagraph (c.1)(iii.1) of the definitionprincipal residencein section 54, and(b)the property is a property that would be the trust’sprincipal residence(as defined in section 54) for the taxation year in which the distribution occurs if(i)that definition were read without reference to its subparagraph (c.1)(iii.1), and(ii)the trust designated the property under that definition as its principal residence for the taxation year; (bien exclu)exempt propertyexempt propertyof a taxpayer at any time means property any income or gain from the disposition of which by the taxpayer at that time would, because the taxpayer is non-resident or because of a provision contained in a tax treaty, not cause an increase in the taxpayer’s tax payable under this Part; (bien exonéré)income interestincome interestof a taxpayer in a trust means a right (whether immediate or future and whether absolute or contingent) of the taxpayer as a beneficiary under a personal trust to, or to receive, all or any part of the income of the trust and, after 1999, includes a right (other than a right acquired before 2000 and disposed of before March 2000) to enforce payment of an amount by the trust that arises as a consequence of any such right; (participation au revenu)inter vivostrustinter vivostrustmeans a trust other than a testamentary trust; (fiducie non testamentaire)non-qualifying real propertynon-qualifying real property[Repealed, 1995, c. 3, s. 31]pre-1972 spousal trustpre-1972 spousal trustat a particular time means a trust that was(a)created by the will of a taxpayer who died before 1972, or(b)created before June 18, 1971 by a taxpayer during the taxpayer’s lifetimethat throughout the period beginning at the time it was created and ending at the earliest of January 1, 1993, the day on which the taxpayer’s spouse or common-law partner died and the particular time, was a trust under which the taxpayer’s spouse or common-law partner was entitled to receive all of the income of the trust that arose before the spouse’s or common-law partner’s death, unless a person other than the spouse or common-law partner received or otherwise obtained the use of any of the income or capital of the trust before the end of that period; (fiducie au profit du conjoint antérieure à 1972)preferred beneficiarypreferred beneficiaryunder a trust for a particular taxation year of the trust means a beneficiary under the trust at the end of the particular year who is resident in Canada at that time if(a)the beneficiary is(i)an individual in respect of whom paragraphs 118.3(1)(a) to (b) apply for the individual’s taxation year (in this definition referred to as the “beneficiary’s year”) that ends in the particular year, or(ii)an individual(A)who attained the age of 18 years before the end of the beneficiary’s year, was a dependant (within the meaning assigned by subsection 118(6)) of another individual for the beneficiary’s year and was dependent on the other individual because of mental or physical infirmity, and(B)whose income (computed without reference to subsection 104(14)) for the beneficiary’s year does not exceed the amount determined for F in subsection 118(1.1) for the year, and(b)the beneficiary is(i)the settlor of the trust,(ii)the spouse or common-law partner or former spouse or common-law partner of the settlor of the trust, or(iii)a child, grandchild or great grandchild of the settlor of the trust or the spouse or common-law partner of any such person; (bénéficiaire privilégié)qualified farm propertyqualified farm property[Repealed, 2014, c. 39, s. 28]qualified fishing propertyqualified fishing property[Repealed, 2014, c. 39, s. 28]qualified small business corporation sharequalified small business corporation share[Repealed, 2014, c. 39, s. 28]settlorsettlor,(a)in relation to a testamentary trust, means the individual referred to in the definitiontestamentary trustin this subsection, and(b)in relation to aninter vivostrust,(i)if the trust was created by the transfer, assignment or other disposition of property thereto (in this definition referred to as property “contributed”) by not more than one individual and the fair market value of such of the property of the trust as was contributed by the individual at the time of the creation of the trust or at any subsequent time exceeds the fair market value of such of the property of the trust as was contributed by any other person or persons at any subsequent time (such fair market values being determined at the time of the making of any such contribution), means that individual, and(ii)if the trust was created by the contribution of property thereto jointly by an individual and the individual’s spouse or common-law partner and by no other person and the fair market value of such of the property of the trust as was contributed by them at the time of the creation of the trust or at any subsequent time exceeds the fair market value of such of the property of the trust as was contributed by any other person or persons at any subsequent time (such fair market values being determined at the time of the making of any such contribution), means that individual and the spouse or common-law partner; (auteur ou disposant)testamentary trusttestamentary trust, in a taxation year, means a trust that arose on and as a consequence of the death of an individual (including a trust referred to in subsection 248(9.1)), other than(a)a trust created by a person other than the individual,(b)a trust created after November 12, 1981 if, before the end of the taxation year, property has been contributed to the trust otherwise than by an individual on or after the individual’s death and as a consequence thereof,(c)a trust created before November 13, 1981 if(i)after June 28, 1982 property has been contributed to the trust otherwise than by an individual on or after the individual’s death and as a consequence thereof, or(ii)before the end of the taxation year, the total fair market value of the property owned by the trust that was contributed to the trust otherwise than by an individual on or after the individual’s death and as a consequence thereof and the property owned by the trust that was substituted for such property exceeds the total fair market value of the property owned by the trust that was contributed by an individual on or after the individual’s death and as a consequence thereof and the property owned by the trust that was substituted for such property, and for the purposes of this subparagraph the fair market value of any property shall be determined as at the time it was acquired by the trust, and(d)a trust that, at any time after December 20, 2002 and before the end of the taxation year, incurs a debt or any other obligation owed to, or guaranteed by, a beneficiary or any other person or partnership (which beneficiary, person or partnership is referred to in this paragraph as the “specified party”) with whom any beneficiary of the trust does not deal at arm’s length, other than a debt or other obligation(i)incurred by the trust in satisfaction of the specified party’s right as a beneficiary under the trust(A)to enforce payment of an amount of the trust’s income or capital gains payable at or before that time by the trust to the specified party, or(B)to otherwise receive any part of the capital of the trust,(ii)owed to the specified party, if the debt or other obligation arose because of a service (for greater certainty, not including any transfer or loan of property) rendered by the specified party to, for or on behalf of the trust,(iii)owed to the specified party, if(A)the debt or other obligation arose because of a payment made by the specified party for or on behalf of the trust,(B)in exchange for the payment (and in full settlement of the debt or other obligation), the trust transfers property, the fair market value of which is not less than the principal amount of the debt or other obligation, to the specified party within 12 months after the payment was made (or, if written application has been made to the Minister by the trust within that 12-month period, within any longer period that the Minister considers reasonable in the circumstances), and(C)it is reasonable to conclude that the specified party would have been willing to make the payment if the specified party dealt at arm’s length with the trust, except where the trust is the individual’s estate and that payment was made within the first 12 months after the individual’s death (or, if written application has been made to the Minister by the estate within that 12-month period, within any longer period that the Minister considers reasonable in the circumstances), or(iv)incurred by the trust before October 24, 2012 if, in full settlement of the debt or other obligation the trust transfers property, the fair market value of which is not less than the principal amount of the debt or other obligation, to the person or partnership to whom the debt or other obligation is owed within 12 months after the day on which theTechnical Tax Amendments Act, 2012receives royal assent (or if written application has been made to the Minister by the trust within that 12-month period, within any longer period that the Minister considers reasonable in the circumstances); (fiducie testamentaire)trusttrustincludes aninter vivostrust and a testamentary trust but in subsections 104(4), (5), (5.2), (12), (13.1), (13.2), (14) and (15) and sections 105 to 107 does not include(a)an amateur athlete trust, an employee life and health trust, an employee trust, a trust described in paragraph 149(1)(o.4) or a trust governed by a deferred profit sharing plan, an employee benefit plan, an employees profit sharing plan, a FHSA, a foreign retirement arrangement, a pooled registered pension plan, a registered disability savings plan, a registered education savings plan, a registered pension plan, a registered retirement income fund, a registered retirement savings plan, a registered supplementary unemployment benefit plan or a TFSA,(a.1)a trust (other than a trust described in paragraph (a) or (d), a trust to which subsection 7(2) or (6) applies or a trust prescribed for the purpose of subsection 107(2)) all or substantially all of the property of which is held for the purpose of providing benefits to individuals each of whom is provided with benefits in respect of, or because of, an office or employment or former office or employment of any individual,(b)a related segregated fund trust (within the meaning assigned by section 138.1),(c)a trust deemed by subsection 143(1) to exist in respect of a congregation that is a constituent part of a religious organization,(d)an RCA trust (within the meaning assigned by subsection 207.5(1)),(e)a trust each of the beneficiaries under which was at all times after it was created a trust referred to in paragraph (a), (b) or (d) or a person who is a beneficiary of the trust only because of being a beneficiary under a trust referred to in any of those paragraphs, or(e.1)a cemetery care trust or a trust governed by an eligible funeral arrangement,and, in applying subsections 104(4), (5), (5.2), (12), (14) and (15) at any time, does not include(f)a trust that, at that time, is a unit trust, or(g)a trust all interests in which, at that time, have vested indefeasibly, other than(i)an alter ego trust, a joint spousal or common-law partner trust, a post-1971 spousal or common-law partner trust or a trust to which paragraph 104(4)(a.4) applies,(ii)[Repealed, 2013, c. 34, s. 236](iii)a trust that has, in its return of income under this Part for its first taxation year that ends after 1992, elected that this paragraph not apply,(iv)a trust that is at that time resident in Canada where the total fair market value at that time of all interests in the trust held at that time by beneficiaries under the trust who at that time are non-resident is more than 20% of the total fair market value at that time of all interests in the trust held at that time by beneficiaries under the trust,(v)a trust under the terms of which, at that time, all or part of a person’s interest in the trust is to be terminated with reference to a period of time (including a period of time determined with reference to the person’s death), otherwise than as a consequence of terms of the trust under which an interest in the trust is to be terminated as a consequence of a distribution to the person (or the person’s estate) of property of the trust if the fair market value of the property to be distributed is required to be commensurate with the fair market value of that interest immediately before the distribution, or(vi)a trust that, before that time and after December 17, 1999, has made a distribution to a beneficiary in respect of the beneficiary’s capital interest in the trust, if the distribution can reasonably be considered to have been financed by a liability of the trust and one of the purposes of incurring the liability was to avoid taxes otherwise payable under this Part as a consequence of the death of any individual. (fiducie)Marginal note:Testamentary trust not disqualified(1.1)For the purpose of the definitiontestamentary trustin subsection (1), a contribution to a particular trust does not include(a)aqualifying expenditure(within the meaning of section 118.04, 118.041 or 122.92) of a beneficiary under the trust; or(b)an amount paid to, or on behalf of, the trust by another trust if(i)the trust is an individual’s graduated rate estate (determined without regard to the payment and this subsection),(ii)paragraph 104(13.4)(b) applies to the other trust, for a taxation year that ends at a time determined by reference to the individual’s death, because of a joint election made under subparagraph 104(13.4)(b.1)(iii) by the other trust and the legal representative administering the estate,(iii)the payment is on account of the tax payable by the individual, for the individual’s taxation year that includes the day on which the individual dies, under(A)this Part, or(B)the law of the province, in which the individual was resident immediately before the individual’s death, that imposes a tax on the taxable income of individuals resident in that province, and(iv)the amount of the payment does not exceed the amount by which that tax payable is greater than it would have been if paragraph 104(13.4)(b) did not apply to the other trust in respect of the taxation year referred to in subparagraph (ii).Marginal note:When trust is a unit trust(2)For the purposes of this Act, a trust is a unit trust at any particular time if, at that time, it was aninter vivostrust the interest of each beneficiary under which was described by reference to units of the trust, and(a)the issued units of the trust included(i)units having conditions attached thereto that included conditions requiring the trust to accept, at the demand of the holder thereof and at prices determined and payable in accordance with the conditions, the surrender of the units, or fractions or parts thereof, that are fully paid, or(ii)units qualified in accordance with prescribed conditions relating to the redemption of the units by the trust,and the fair market value of such of the units as had conditions attached thereto that included such conditions or as were so qualified, as the case may be, was not less than 95% of the fair market value of all of the issued units of the trust (such fair market values being determined without regard to any voting rights attaching to units of the trust);(b)each of the following conditions was satisfied:(i)throughout the taxation year that includes the particular time (in this paragraph referred to as the “current year”), the trust was resident in Canada,(ii)throughout the period or periods (in this paragraph referred to as the “relevant periods”) that are in the current year and throughout which the conditions in paragraph (a) are not satisfied in respect of the trust, its only undertaking was(A)the investing of its funds in property (other than real property or an interest in real property or an immovable or a real right in an immovable),(B)the acquiring, holding, maintaining, improving, leasing or managing of any real property or an interest in real property, or of any immovable or a real right in immovables, that is capital property of the trust, or(C)any combination of the activities described in clauses (A) and (B),(iii)throughout the relevant periods at least 80% of its property consisted of any combination of(A)shares,(B)any property that, under the terms or conditions of which or under an agreement, is convertible into, is exchangeable for or confers a right to acquire, shares,(C)cash,(D)bonds, debentures, mortgages, hypothecary claims, notes and other similar obligations,(E)marketable securities,(F)real property situated in Canada, and interests in such real property, or immovables situated in Canada and real rights in such immovables, and(G)rights to and interests in — or, for civil law, rights in or to — any rental or royalty computed by reference to the amount or value of production from a natural accumulation of petroleum or natural gas in Canada, from an oil or gas well in Canada or from a mineral resource in Canada,(iv)either(A)not less than 95% of its income for the current year (computed without regard to subsections 39(2), 49(2.1) and 104(6)) was derived from, or from the disposition of, investments described in subparagraph (iii), or(B)not less than 95% of its income for each of the relevant periods (computed without regard to subsections 39(2), 49(2.1) and 104(6) and as though each of those periods were a taxation year) was derived from, or from the disposition of, investments described in subparagraph (iii),(v)throughout the relevant periods, not more than 10% of its property consisted of bonds, securities or shares in the capital stock of any one corporation or debtor other than Her Majesty in right of Canada or a province or a Canadian municipality, and(vi)where the trust would not be a unit trust at the particular time if this paragraph were read without reference to this subparagraph and subparagraph (iii) were read without reference to clause (F), the units of the trust are listed at any time in the current year or in the following taxation year on a designated stock exchange in Canada, or(c)the fair market value of the property of the trust at the end of 1993 was primarily attributable to real property or an interest in real property — or to immovables or a real right in immovables — and the trust was a unit trust throughout any calendar year that ended before 1994 and the fair market value of the property of the trust at the particular time is primarily attributable to property described in paragraph (a) or (b) of the definitionqualified investmentin section 204, real property or an interest in real property — or immovables or a real right in immovables — or any combination of those properties.Marginal note:Income of a trust in certain provisions(3)For the purposes of the definitionsincome interestin subsection (1),lifetime benefit trustin subsection 60.011(1) andexempt foreign trustin subsection 94(1), the income of a trust is its income computed without reference to the provisions of this Act and, for the purposes of the definitionpre-1972 spousal trustin subsection (1) and paragraphs 70(6)(b) and (6.1)(b), 73(1.01)(c) and 104(4)(a), the income of a trust is its income computed without reference to the provisions of this Act, minus any dividends included in that income(a)that are amounts not included by reason of section 83 in computing the income of the trust for the purposes of the other provisions of this Act;(b)that are described in subsection 131(1); or(c)to which subsection 131(1) applies by reason of subsection 130(2).Marginal note:Trust not disqualified(4)For the purposes of the definitionpre-1972 spousal trustin subsection (1), subparagraphs 70(6)(b)(ii) and (6.1)(b)(ii) and paragraphs 73(1.01)(c) and 104(4)(a), if a trust was created by a taxpayer whether by the taxpayer’s will or otherwise, no person is deemed to have received or otherwise obtained or to be entitled to receive or otherwise obtain the use of any income or capital of the trust solely because of(a)the payment, or provision for payment, as the case may be, by the trust of(i)any estate, legacy, succession or inheritance duty payable, in consequence of the death of the taxpayer, or a spouse or common-law partner of the taxpayer who is a beneficiary under the trust, in respect of any property of, or interest in, the trust, or(ii)any income or profits tax payable by the trust in respect of any income of the trust; or(b)the inhabiting at any time by an individual of a housing unit that is, or is in respect of, property that is owned at that time by the trust, if(i)the property is described in the definitionprincipal residencein section 54 in respect of the trust for the trust’s taxation year that includes that time, and(ii)the individual is(A)the taxpayer, or(B)the taxpayer’s(I)spouse or common-law partner,(II)former spouse or common-law partner, or(III)child.Marginal note:Interpretation(5)Except as otherwise provided in this Part,(a)an amount included in computing the income for a taxation year of a beneficiary of a trust under subsection 104(13) or (14) or section 105 shall be deemed to be income of the beneficiary for the year from a property that is an interest in the trust and not from any other source, and(b)an amount deductible in computing the amount that would, but for subsections 104(6) and (12), be the income of a trust for a taxation year shall not be deducted by a beneficiary of the trust in computing the beneficiary’s income for a taxation year,but, for greater certainty, nothing in this subsection shall affect the application of subsection 56(4.1), sections 74.1 to 75 and 120.4 and subsection 160(1.2) of this Act and section 74 of theIncome Tax Act, chapter 148 of the Revised Statutes of Canada, 1952.Marginal note:Variation of trusts(6)Where at any time the terms of a trust are varied(a)for the purposes of subsections 104(4), (5) and (5.2) and subject to paragraph (b), the trust is, at and after that time, deemed to be the same trust as, and a continuation of, the trust immediately before that time;(b)for greater certainty, paragraph (a) does not affect the application of paragraph 104(4)(a.1); and(c)for the purposes of paragraph 53(2)(h), subsection 107(1), paragraph (j) of the definitionexcluded right or interestin subsection 128.1(10) and the definitionpersonal trustin subsection 248(1), no interest of a beneficiary under the trust before it was varied is considered to be consideration for the interest of the beneficiary in the trust as varied.Marginal note:Interests acquired for consideration(7)For the purposes of paragraph 53(2)(h), subparagraph (c)(i) of the definitionexempt amountin subsection 94(1), subsection 107(1), paragraph (j) of the definitionexcluded right or interestin subsection 128.1(10) and paragraph (b) of the definitionpersonal trustin subsection 248(1),(a)an interest in a trust is deemed not to be acquired for consideration solely because it was acquired in satisfaction of any right as a beneficiary under the trust to enforce payment of an amount by the trust; and(b)if all the beneficial interests in a particular trust acquired by way of the transfer, assignment or other disposition of property to the particular trust were acquired by(i)one person, or(ii)two or more persons who would be related to each other if(A)a trust and another person were related to each other, where the other person is a beneficiary under the trust or is related to a beneficiary under the trust, and(B)a trust and another trust were related to each other, where a beneficiary under the trust is a beneficiary under the other trust or is related to a beneficiary under the other trust,any beneficial interest in the particular trust acquired by such a person is deemed to have been acquired for no consideration.
(a)without reference to paragraphs 104(4)(a) and (a.1) and subsections 104(5.1), (5.2) and (12) and 107(4),(b)as if the greatest amount that the trust was entitled to claim under subsection 104(6) in computing its income for the year were so claimed, and(c)without reference to subsection 12(10.2), except to the extent that that subsection applies to amounts paid to a trust to which paragraph 70(6.1)(b) applies and before the death of the spouse or common-law partner referred to in that paragraph; (revenu accumulé)
(a)where any money or other property of the trust has been distributed by the trust to the taxpayer in satisfaction of all or part of the taxpayer’s capital interest (whether on the winding-up of the trust or otherwise), the total of(i)the money so distributed, and(ii)all amounts each of which is the cost amount to the trust, immediately before the distribution, of each such other property,(a.1)where that time (in this paragraph referred to as the “particular time”) is immediately before the time that is immediately before the time of the death of the taxpayer and subsection 104(4) or (5) deems the trust to dispose of property at the end of the day that includes the particular time, the amount that would be determined under paragraph (b) if the taxpayer had died on a day that ended immediately before the time that is immediately before the particular time, and(b)in any other case, the amount determined by the formula(A - B) × C/DwhereAis the total of(i)all money of the trust on hand immediately before that time, and(ii)all amounts each of which is the cost amount to the trust, immediately before that time, of each other property of the trust,Bis the total of all amounts each of which is the amount of any debt owing by the trust, or of any other obligation of the trust to pay any amount, that was outstanding immediately before that time,Cis the fair market value at that time of the capital interest or part thereof, as the case may be, in the trust, andDis the fair market value at that time of all capital interests in the trust; (coût indiqué)
(i)the money so distributed, and(ii)all amounts each of which is the cost amount to the trust, immediately before the distribution, of each such other property,
(i)all money of the trust on hand immediately before that time, and(ii)all amounts each of which is the cost amount to the trust, immediately before that time, of each other property of the trust,
(a)its annual gains limit (within the meaning assigned by subsection 110.6(1)) for the year, and(b)the amount determined by the formulaA - BwhereAis its cumulative gains limit (within the meaning assigned by subsection 110.6(1)) at the end of the year, andBis the total of all amounts designated under subsection 104(21.2) by the trust in respect of beneficiaries for taxation years before that year; (gains en capital imposables admissibles)
(a)the trust is not in its first taxation year that begins after 2016 a trust described in subparagraph (c.1)(iii.1) of the definitionprincipal residencein section 54, and(b)the property is a property that would be the trust’sprincipal residence(as defined in section 54) for the taxation year in which the distribution occurs if(i)that definition were read without reference to its subparagraph (c.1)(iii.1), and(ii)the trust designated the property under that definition as its principal residence for the taxation year; (bien exclu)
(i)that definition were read without reference to its subparagraph (c.1)(iii.1), and(ii)the trust designated the property under that definition as its principal residence for the taxation year; (bien exclu)
(a)created by the will of a taxpayer who died before 1972, or(b)created before June 18, 1971 by a taxpayer during the taxpayer’s lifetime
(a)the beneficiary is(i)an individual in respect of whom paragraphs 118.3(1)(a) to (b) apply for the individual’s taxation year (in this definition referred to as the “beneficiary’s year”) that ends in the particular year, or(ii)an individual(A)who attained the age of 18 years before the end of the beneficiary’s year, was a dependant (within the meaning assigned by subsection 118(6)) of another individual for the beneficiary’s year and was dependent on the other individual because of mental or physical infirmity, and(B)whose income (computed without reference to subsection 104(14)) for the beneficiary’s year does not exceed the amount determined for F in subsection 118(1.1) for the year, and(b)the beneficiary is(i)the settlor of the trust,(ii)the spouse or common-law partner or former spouse or common-law partner of the settlor of the trust, or(iii)a child, grandchild or great grandchild of the settlor of the trust or the spouse or common-law partner of any such person; (bénéficiaire privilégié)
(i)an individual in respect of whom paragraphs 118.3(1)(a) to (b) apply for the individual’s taxation year (in this definition referred to as the “beneficiary’s year”) that ends in the particular year, or(ii)an individual(A)who attained the age of 18 years before the end of the beneficiary’s year, was a dependant (within the meaning assigned by subsection 118(6)) of another individual for the beneficiary’s year and was dependent on the other individual because of mental or physical infirmity, and(B)whose income (computed without reference to subsection 104(14)) for the beneficiary’s year does not exceed the amount determined for F in subsection 118(1.1) for the year, and
(A)who attained the age of 18 years before the end of the beneficiary’s year, was a dependant (within the meaning assigned by subsection 118(6)) of another individual for the beneficiary’s year and was dependent on the other individual because of mental or physical infirmity, and(B)whose income (computed without reference to subsection 104(14)) for the beneficiary’s year does not exceed the amount determined for F in subsection 118(1.1) for the year, and
(i)the settlor of the trust,(ii)the spouse or common-law partner or former spouse or common-law partner of the settlor of the trust, or(iii)a child, grandchild or great grandchild of the settlor of the trust or the spouse or common-law partner of any such person; (bénéficiaire privilégié)
(a)in relation to a testamentary trust, means the individual referred to in the definitiontestamentary trustin this subsection, and(b)in relation to aninter vivostrust,(i)if the trust was created by the transfer, assignment or other disposition of property thereto (in this definition referred to as property “contributed”) by not more than one individual and the fair market value of such of the property of the trust as was contributed by the individual at the time of the creation of the trust or at any subsequent time exceeds the fair market value of such of the property of the trust as was contributed by any other person or persons at any subsequent time (such fair market values being determined at the time of the making of any such contribution), means that individual, and(ii)if the trust was created by the contribution of property thereto jointly by an individual and the individual’s spouse or common-law partner and by no other person and the fair market value of such of the property of the trust as was contributed by them at the time of the creation of the trust or at any subsequent time exceeds the fair market value of such of the property of the trust as was contributed by any other person or persons at any subsequent time (such fair market values being determined at the time of the making of any such contribution), means that individual and the spouse or common-law partner; (auteur ou disposant)
(i)if the trust was created by the transfer, assignment or other disposition of property thereto (in this definition referred to as property “contributed”) by not more than one individual and the fair market value of such of the property of the trust as was contributed by the individual at the time of the creation of the trust or at any subsequent time exceeds the fair market value of such of the property of the trust as was contributed by any other person or persons at any subsequent time (such fair market values being determined at the time of the making of any such contribution), means that individual, and(ii)if the trust was created by the contribution of property thereto jointly by an individual and the individual’s spouse or common-law partner and by no other person and the fair market value of such of the property of the trust as was contributed by them at the time of the creation of the trust or at any subsequent time exceeds the fair market value of such of the property of the trust as was contributed by any other person or persons at any subsequent time (such fair market values being determined at the time of the making of any such contribution), means that individual and the spouse or common-law partner; (auteur ou disposant)
(a)a trust created by a person other than the individual,(b)a trust created after November 12, 1981 if, before the end of the taxation year, property has been contributed to the trust otherwise than by an individual on or after the individual’s death and as a consequence thereof,(c)a trust created before November 13, 1981 if(i)after June 28, 1982 property has been contributed to the trust otherwise than by an individual on or after the individual’s death and as a consequence thereof, or(ii)before the end of the taxation year, the total fair market value of the property owned by the trust that was contributed to the trust otherwise than by an individual on or after the individual’s death and as a consequence thereof and the property owned by the trust that was substituted for such property exceeds the total fair market value of the property owned by the trust that was contributed by an individual on or after the individual’s death and as a consequence thereof and the property owned by the trust that was substituted for such property, and for the purposes of this subparagraph the fair market value of any property shall be determined as at the time it was acquired by the trust, and(d)a trust that, at any time after December 20, 2002 and before the end of the taxation year, incurs a debt or any other obligation owed to, or guaranteed by, a beneficiary or any other person or partnership (which beneficiary, person or partnership is referred to in this paragraph as the “specified party”) with whom any beneficiary of the trust does not deal at arm’s length, other than a debt or other obligation(i)incurred by the trust in satisfaction of the specified party’s right as a beneficiary under the trust(A)to enforce payment of an amount of the trust’s income or capital gains payable at or before that time by the trust to the specified party, or(B)to otherwise receive any part of the capital of the trust,(ii)owed to the specified party, if the debt or other obligation arose because of a service (for greater certainty, not including any transfer or loan of property) rendered by the specified party to, for or on behalf of the trust,(iii)owed to the specified party, if(A)the debt or other obligation arose because of a payment made by the specified party for or on behalf of the trust,(B)in exchange for the payment (and in full settlement of the debt or other obligation), the trust transfers property, the fair market value of which is not less than the principal amount of the debt or other obligation, to the specified party within 12 months after the payment was made (or, if written application has been made to the Minister by the trust within that 12-month period, within any longer period that the Minister considers reasonable in the circumstances), and(C)it is reasonable to conclude that the specified party would have been willing to make the payment if the specified party dealt at arm’s length with the trust, except where the trust is the individual’s estate and that payment was made within the first 12 months after the individual’s death (or, if written application has been made to the Minister by the estate within that 12-month period, within any longer period that the Minister considers reasonable in the circumstances), or(iv)incurred by the trust before October 24, 2012 if, in full settlement of the debt or other obligation the trust transfers property, the fair market value of which is not less than the principal amount of the debt or other obligation, to the person or partnership to whom the debt or other obligation is owed within 12 months after the day on which theTechnical Tax Amendments Act, 2012receives royal assent (or if written application has been made to the Minister by the trust within that 12-month period, within any longer period that the Minister considers reasonable in the circumstances); (fiducie testamentaire)
(i)after June 28, 1982 property has been contributed to the trust otherwise than by an individual on or after the individual’s death and as a consequence thereof, or(ii)before the end of the taxation year, the total fair market value of the property owned by the trust that was contributed to the trust otherwise than by an individual on or after the individual’s death and as a consequence thereof and the property owned by the trust that was substituted for such property exceeds the total fair market value of the property owned by the trust that was contributed by an individual on or after the individual’s death and as a consequence thereof and the property owned by the trust that was substituted for such property, and for the purposes of this subparagraph the fair market value of any property shall be determined as at the time it was acquired by the trust, and
(i)incurred by the trust in satisfaction of the specified party’s right as a beneficiary under the trust(A)to enforce payment of an amount of the trust’s income or capital gains payable at or before that time by the trust to the specified party, or(B)to otherwise receive any part of the capital of the trust,(ii)owed to the specified party, if the debt or other obligation arose because of a service (for greater certainty, not including any transfer or loan of property) rendered by the specified party to, for or on behalf of the trust,(iii)owed to the specified party, if(A)the debt or other obligation arose because of a payment made by the specified party for or on behalf of the trust,(B)in exchange for the payment (and in full settlement of the debt or other obligation), the trust transfers property, the fair market value of which is not less than the principal amount of the debt or other obligation, to the specified party within 12 months after the payment was made (or, if written application has been made to the Minister by the trust within that 12-month period, within any longer period that the Minister considers reasonable in the circumstances), and(C)it is reasonable to conclude that the specified party would have been willing to make the payment if the specified party dealt at arm’s length with the trust, except where the trust is the individual’s estate and that payment was made within the first 12 months after the individual’s death (or, if written application has been made to the Minister by the estate within that 12-month period, within any longer period that the Minister considers reasonable in the circumstances), or(iv)incurred by the trust before October 24, 2012 if, in full settlement of the debt or other obligation the trust transfers property, the fair market value of which is not less than the principal amount of the debt or other obligation, to the person or partnership to whom the debt or other obligation is owed within 12 months after the day on which theTechnical Tax Amendments Act, 2012receives royal assent (or if written application has been made to the Minister by the trust within that 12-month period, within any longer period that the Minister considers reasonable in the circumstances); (fiducie testamentaire)
(A)to enforce payment of an amount of the trust’s income or capital gains payable at or before that time by the trust to the specified party, or(B)to otherwise receive any part of the capital of the trust,
(A)the debt or other obligation arose because of a payment made by the specified party for or on behalf of the trust,(B)in exchange for the payment (and in full settlement of the debt or other obligation), the trust transfers property, the fair market value of which is not less than the principal amount of the debt or other obligation, to the specified party within 12 months after the payment was made (or, if written application has been made to the Minister by the trust within that 12-month period, within any longer period that the Minister considers reasonable in the circumstances), and(C)it is reasonable to conclude that the specified party would have been willing to make the payment if the specified party dealt at arm’s length with the trust, except where the trust is the individual’s estate and that payment was made within the first 12 months after the individual’s death (or, if written application has been made to the Minister by the estate within that 12-month period, within any longer period that the Minister considers reasonable in the circumstances), or
(a)an amateur athlete trust, an employee life and health trust, an employee trust, a trust described in paragraph 149(1)(o.4) or a trust governed by a deferred profit sharing plan, an employee benefit plan, an employees profit sharing plan, a FHSA, a foreign retirement arrangement, a pooled registered pension plan, a registered disability savings plan, a registered education savings plan, a registered pension plan, a registered retirement income fund, a registered retirement savings plan, a registered supplementary unemployment benefit plan or a TFSA,(a.1)a trust (other than a trust described in paragraph (a) or (d), a trust to which subsection 7(2) or (6) applies or a trust prescribed for the purpose of subsection 107(2)) all or substantially all of the property of which is held for the purpose of providing benefits to individuals each of whom is provided with benefits in respect of, or because of, an office or employment or former office or employment of any individual,(b)a related segregated fund trust (within the meaning assigned by section 138.1),(c)a trust deemed by subsection 143(1) to exist in respect of a congregation that is a constituent part of a religious organization,(d)an RCA trust (within the meaning assigned by subsection 207.5(1)),(e)a trust each of the beneficiaries under which was at all times after it was created a trust referred to in paragraph (a), (b) or (d) or a person who is a beneficiary of the trust only because of being a beneficiary under a trust referred to in any of those paragraphs, or(e.1)a cemetery care trust or a trust governed by an eligible funeral arrangement,
(f)a trust that, at that time, is a unit trust, or(g)a trust all interests in which, at that time, have vested indefeasibly, other than(i)an alter ego trust, a joint spousal or common-law partner trust, a post-1971 spousal or common-law partner trust or a trust to which paragraph 104(4)(a.4) applies,(ii)[Repealed, 2013, c. 34, s. 236](iii)a trust that has, in its return of income under this Part for its first taxation year that ends after 1992, elected that this paragraph not apply,(iv)a trust that is at that time resident in Canada where the total fair market value at that time of all interests in the trust held at that time by beneficiaries under the trust who at that time are non-resident is more than 20% of the total fair market value at that time of all interests in the trust held at that time by beneficiaries under the trust,(v)a trust under the terms of which, at that time, all or part of a person’s interest in the trust is to be terminated with reference to a period of time (including a period of time determined with reference to the person’s death), otherwise than as a consequence of terms of the trust under which an interest in the trust is to be terminated as a consequence of a distribution to the person (or the person’s estate) of property of the trust if the fair market value of the property to be distributed is required to be commensurate with the fair market value of that interest immediately before the distribution, or(vi)a trust that, before that time and after December 17, 1999, has made a distribution to a beneficiary in respect of the beneficiary’s capital interest in the trust, if the distribution can reasonably be considered to have been financed by a liability of the trust and one of the purposes of incurring the liability was to avoid taxes otherwise payable under this Part as a consequence of the death of any individual. (fiducie)
(i)an alter ego trust, a joint spousal or common-law partner trust, a post-1971 spousal or common-law partner trust or a trust to which paragraph 104(4)(a.4) applies,(ii)[Repealed, 2013, c. 34, s. 236](iii)a trust that has, in its return of income under this Part for its first taxation year that ends after 1992, elected that this paragraph not apply,(iv)a trust that is at that time resident in Canada where the total fair market value at that time of all interests in the trust held at that time by beneficiaries under the trust who at that time are non-resident is more than 20% of the total fair market value at that time of all interests in the trust held at that time by beneficiaries under the trust,(v)a trust under the terms of which, at that time, all or part of a person’s interest in the trust is to be terminated with reference to a period of time (including a period of time determined with reference to the person’s death), otherwise than as a consequence of terms of the trust under which an interest in the trust is to be terminated as a consequence of a distribution to the person (or the person’s estate) of property of the trust if the fair market value of the property to be distributed is required to be commensurate with the fair market value of that interest immediately before the distribution, or(vi)a trust that, before that time and after December 17, 1999, has made a distribution to a beneficiary in respect of the beneficiary’s capital interest in the trust, if the distribution can reasonably be considered to have been financed by a liability of the trust and one of the purposes of incurring the liability was to avoid taxes otherwise payable under this Part as a consequence of the death of any individual. (fiducie)
(a)aqualifying expenditure(within the meaning of section 118.04, 118.041 or 122.92) of a beneficiary under the trust; or(b)an amount paid to, or on behalf of, the trust by another trust if(i)the trust is an individual’s graduated rate estate (determined without regard to the payment and this subsection),(ii)paragraph 104(13.4)(b) applies to the other trust, for a taxation year that ends at a time determined by reference to the individual’s death, because of a joint election made under subparagraph 104(13.4)(b.1)(iii) by the other trust and the legal representative administering the estate,(iii)the payment is on account of the tax payable by the individual, for the individual’s taxation year that includes the day on which the individual dies, under(A)this Part, or(B)the law of the province, in which the individual was resident immediately before the individual’s death, that imposes a tax on the taxable income of individuals resident in that province, and(iv)the amount of the payment does not exceed the amount by which that tax payable is greater than it would have been if paragraph 104(13.4)(b) did not apply to the other trust in respect of the taxation year referred to in subparagraph (ii).
(i)the trust is an individual’s graduated rate estate (determined without regard to the payment and this subsection),(ii)paragraph 104(13.4)(b) applies to the other trust, for a taxation year that ends at a time determined by reference to the individual’s death, because of a joint election made under subparagraph 104(13.4)(b.1)(iii) by the other trust and the legal representative administering the estate,(iii)the payment is on account of the tax payable by the individual, for the individual’s taxation year that includes the day on which the individual dies, under(A)this Part, or(B)the law of the province, in which the individual was resident immediately before the individual’s death, that imposes a tax on the taxable income of individuals resident in that province, and(iv)the amount of the payment does not exceed the amount by which that tax payable is greater than it would have been if paragraph 104(13.4)(b) did not apply to the other trust in respect of the taxation year referred to in subparagraph (ii).
(A)this Part, or(B)the law of the province, in which the individual was resident immediately before the individual’s death, that imposes a tax on the taxable income of individuals resident in that province, and
(a)the issued units of the trust included(i)units having conditions attached thereto that included conditions requiring the trust to accept, at the demand of the holder thereof and at prices determined and payable in accordance with the conditions, the surrender of the units, or fractions or parts thereof, that are fully paid, or(ii)units qualified in accordance with prescribed conditions relating to the redemption of the units by the trust,and the fair market value of such of the units as had conditions attached thereto that included such conditions or as were so qualified, as the case may be, was not less than 95% of the fair market value of all of the issued units of the trust (such fair market values being determined without regard to any voting rights attaching to units of the trust);(b)each of the following conditions was satisfied:(i)throughout the taxation year that includes the particular time (in this paragraph referred to as the “current year”), the trust was resident in Canada,(ii)throughout the period or periods (in this paragraph referred to as the “relevant periods”) that are in the current year and throughout which the conditions in paragraph (a) are not satisfied in respect of the trust, its only undertaking was(A)the investing of its funds in property (other than real property or an interest in real property or an immovable or a real right in an immovable),(B)the acquiring, holding, maintaining, improving, leasing or managing of any real property or an interest in real property, or of any immovable or a real right in immovables, that is capital property of the trust, or(C)any combination of the activities described in clauses (A) and (B),(iii)throughout the relevant periods at least 80% of its property consisted of any combination of(A)shares,(B)any property that, under the terms or conditions of which or under an agreement, is convertible into, is exchangeable for or confers a right to acquire, shares,(C)cash,(D)bonds, debentures, mortgages, hypothecary claims, notes and other similar obligations,(E)marketable securities,(F)real property situated in Canada, and interests in such real property, or immovables situated in Canada and real rights in such immovables, and(G)rights to and interests in — or, for civil law, rights in or to — any rental or royalty computed by reference to the amount or value of production from a natural accumulation of petroleum or natural gas in Canada, from an oil or gas well in Canada or from a mineral resource in Canada,(iv)either(A)not less than 95% of its income for the current year (computed without regard to subsections 39(2), 49(2.1) and 104(6)) was derived from, or from the disposition of, investments described in subparagraph (iii), or(B)not less than 95% of its income for each of the relevant periods (computed without regard to subsections 39(2), 49(2.1) and 104(6) and as though each of those periods were a taxation year) was derived from, or from the disposition of, investments described in subparagraph (iii),(v)throughout the relevant periods, not more than 10% of its property consisted of bonds, securities or shares in the capital stock of any one corporation or debtor other than Her Majesty in right of Canada or a province or a Canadian municipality, and(vi)where the trust would not be a unit trust at the particular time if this paragraph were read without reference to this subparagraph and subparagraph (iii) were read without reference to clause (F), the units of the trust are listed at any time in the current year or in the following taxation year on a designated stock exchange in Canada, or(c)the fair market value of the property of the trust at the end of 1993 was primarily attributable to real property or an interest in real property — or to immovables or a real right in immovables — and the trust was a unit trust throughout any calendar year that ended before 1994 and the fair market value of the property of the trust at the particular time is primarily attributable to property described in paragraph (a) or (b) of the definitionqualified investmentin section 204, real property or an interest in real property — or immovables or a real right in immovables — or any combination of those properties.
(i)units having conditions attached thereto that included conditions requiring the trust to accept, at the demand of the holder thereof and at prices determined and payable in accordance with the conditions, the surrender of the units, or fractions or parts thereof, that are fully paid, or(ii)units qualified in accordance with prescribed conditions relating to the redemption of the units by the trust,
(i)throughout the taxation year that includes the particular time (in this paragraph referred to as the “current year”), the trust was resident in Canada,(ii)throughout the period or periods (in this paragraph referred to as the “relevant periods”) that are in the current year and throughout which the conditions in paragraph (a) are not satisfied in respect of the trust, its only undertaking was(A)the investing of its funds in property (other than real property or an interest in real property or an immovable or a real right in an immovable),(B)the acquiring, holding, maintaining, improving, leasing or managing of any real property or an interest in real property, or of any immovable or a real right in immovables, that is capital property of the trust, or(C)any combination of the activities described in clauses (A) and (B),(iii)throughout the relevant periods at least 80% of its property consisted of any combination of(A)shares,(B)any property that, under the terms or conditions of which or under an agreement, is convertible into, is exchangeable for or confers a right to acquire, shares,(C)cash,(D)bonds, debentures, mortgages, hypothecary claims, notes and other similar obligations,(E)marketable securities,(F)real property situated in Canada, and interests in such real property, or immovables situated in Canada and real rights in such immovables, and(G)rights to and interests in — or, for civil law, rights in or to — any rental or royalty computed by reference to the amount or value of production from a natural accumulation of petroleum or natural gas in Canada, from an oil or gas well in Canada or from a mineral resource in Canada,(iv)either(A)not less than 95% of its income for the current year (computed without regard to subsections 39(2), 49(2.1) and 104(6)) was derived from, or from the disposition of, investments described in subparagraph (iii), or(B)not less than 95% of its income for each of the relevant periods (computed without regard to subsections 39(2), 49(2.1) and 104(6) and as though each of those periods were a taxation year) was derived from, or from the disposition of, investments described in subparagraph (iii),(v)throughout the relevant periods, not more than 10% of its property consisted of bonds, securities or shares in the capital stock of any one corporation or debtor other than Her Majesty in right of Canada or a province or a Canadian municipality, and(vi)where the trust would not be a unit trust at the particular time if this paragraph were read without reference to this subparagraph and subparagraph (iii) were read without reference to clause (F), the units of the trust are listed at any time in the current year or in the following taxation year on a designated stock exchange in Canada, or
(A)the investing of its funds in property (other than real property or an interest in real property or an immovable or a real right in an immovable),(B)the acquiring, holding, maintaining, improving, leasing or managing of any real property or an interest in real property, or of any immovable or a real right in immovables, that is capital property of the trust, or(C)any combination of the activities described in clauses (A) and (B),
(A)shares,(B)any property that, under the terms or conditions of which or under an agreement, is convertible into, is exchangeable for or confers a right to acquire, shares,(C)cash,(D)bonds, debentures, mortgages, hypothecary claims, notes and other similar obligations,(E)marketable securities,(F)real property situated in Canada, and interests in such real property, or immovables situated in Canada and real rights in such immovables, and(G)rights to and interests in — or, for civil law, rights in or to — any rental or royalty computed by reference to the amount or value of production from a natural accumulation of petroleum or natural gas in Canada, from an oil or gas well in Canada or from a mineral resource in Canada,
(A)not less than 95% of its income for the current year (computed without regard to subsections 39(2), 49(2.1) and 104(6)) was derived from, or from the disposition of, investments described in subparagraph (iii), or(B)not less than 95% of its income for each of the relevant periods (computed without regard to subsections 39(2), 49(2.1) and 104(6) and as though each of those periods were a taxation year) was derived from, or from the disposition of, investments described in subparagraph (iii),
(a)that are amounts not included by reason of section 83 in computing the income of the trust for the purposes of the other provisions of this Act;(b)that are described in subsection 131(1); or(c)to which subsection 131(1) applies by reason of subsection 130(2).
(a)the payment, or provision for payment, as the case may be, by the trust of(i)any estate, legacy, succession or inheritance duty payable, in consequence of the death of the taxpayer, or a spouse or common-law partner of the taxpayer who is a beneficiary under the trust, in respect of any property of, or interest in, the trust, or(ii)any income or profits tax payable by the trust in respect of any income of the trust; or(b)the inhabiting at any time by an individual of a housing unit that is, or is in respect of, property that is owned at that time by the trust, if(i)the property is described in the definitionprincipal residencein section 54 in respect of the trust for the trust’s taxation year that includes that time, and(ii)the individual is(A)the taxpayer, or(B)the taxpayer’s(I)spouse or common-law partner,(II)former spouse or common-law partner, or(III)child.
(i)any estate, legacy, succession or inheritance duty payable, in consequence of the death of the taxpayer, or a spouse or common-law partner of the taxpayer who is a beneficiary under the trust, in respect of any property of, or interest in, the trust, or(ii)any income or profits tax payable by the trust in respect of any income of the trust; or
(i)the property is described in the definitionprincipal residencein section 54 in respect of the trust for the trust’s taxation year that includes that time, and(ii)the individual is(A)the taxpayer, or(B)the taxpayer’s(I)spouse or common-law partner,(II)former spouse or common-law partner, or(III)child.
(A)the taxpayer, or(B)the taxpayer’s(I)spouse or common-law partner,(II)former spouse or common-law partner, or(III)child.
(I)spouse or common-law partner,(II)former spouse or common-law partner, or(III)child.
(a)an amount included in computing the income for a taxation year of a beneficiary of a trust under subsection 104(13) or (14) or section 105 shall be deemed to be income of the beneficiary for the year from a property that is an interest in the trust and not from any other source, and(b)an amount deductible in computing the amount that would, but for subsections 104(6) and (12), be the income of a trust for a taxation year shall not be deducted by a beneficiary of the trust in computing the beneficiary’s income for a taxation year,
(a)for the purposes of subsections 104(4), (5) and (5.2) and subject to paragraph (b), the trust is, at and after that time, deemed to be the same trust as, and a continuation of, the trust immediately before that time;(b)for greater certainty, paragraph (a) does not affect the application of paragraph 104(4)(a.1); and(c)for the purposes of paragraph 53(2)(h), subsection 107(1), paragraph (j) of the definitionexcluded right or interestin subsection 128.1(10) and the definitionpersonal trustin subsection 248(1), no interest of a beneficiary under the trust before it was varied is considered to be consideration for the interest of the beneficiary in the trust as varied.
(a)an interest in a trust is deemed not to be acquired for consideration solely because it was acquired in satisfaction of any right as a beneficiary under the trust to enforce payment of an amount by the trust; and(b)if all the beneficial interests in a particular trust acquired by way of the transfer, assignment or other disposition of property to the particular trust were acquired by(i)one person, or(ii)two or more persons who would be related to each other if(A)a trust and another person were related to each other, where the other person is a beneficiary under the trust or is related to a beneficiary under the trust, and(B)a trust and another trust were related to each other, where a beneficiary under the trust is a beneficiary under the other trust or is related to a beneficiary under the other trust,any beneficial interest in the particular trust acquired by such a person is deemed to have been acquired for no consideration.
(i)one person, or(ii)two or more persons who would be related to each other if(A)a trust and another person were related to each other, where the other person is a beneficiary under the trust or is related to a beneficiary under the trust, and(B)a trust and another trust were related to each other, where a beneficiary under the trust is a beneficiary under the other trust or is related to a beneficiary under the other trust,
(A)a trust and another person were related to each other, where the other person is a beneficiary under the trust or is related to a beneficiary under the trust, and(B)a trust and another trust were related to each other, where a beneficiary under the trust is a beneficiary under the other trust or is related to a beneficiary under the other trust,
[NOTE: Application provisions are not included in the consolidated textsee relevant amending Acts and regulations.]R.S., 1985, c. 1 (5th Supp.), s. 1081994, c. 7, Sch