Income Tax Amendments Act, 2000 (S.C. 2001, c. 17)

“accumulating income”

« revenu accumulé »

“accumulating income” of 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;

“capital interest”

« participation au capital »

“capital interest” of 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;

“income interest”

« participation au revenu »

“income interest” of 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;

“cost amount”

« coût indiqué »

“cost amount” to a taxpayer at any time of a capital interest or part of the interest, as the case may be, in a trust (other than a trust that is a foreign affiliate of the taxpayer) means, except for the purposes of section 107.4 and notwithstanding subsection 248(1),

• (a.1) where that time 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 that time, the amount that would be determined under paragraph (b) if the taxpayer had died on a day that ended immediately before that time, and

• (a.1) a trust, other than a trust described in paragraph (a) or (d), 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,

and, in applying subsections 104(4), (5), (5.2), (12), (14) and (15) and section 106 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) a trust that has elected under subsection 104(5.3),

  • (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.

“eligible offset”

« montant de réduction admissible »

“eligible offset” at 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;

“exempt property”

« bien exonéré »

“exempt property” of 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;

• (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),

    • (B) the acquiring, holding, maintaining, improving, leasing or managing of any real property or an interest in real property, 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 real property situated in Canada, and

    • (G) rights to and interests in 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 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 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 prescribed stock exchange in Canada, or

• Marginal note:Income of a trust in certain provisions

  (3) For the purposes of the definition “income interest” in subsection (1), the income of a trust is its income computed without reference to the provisions of this Act and, for the purposes of the definition “pre-1972 spousal trust” in 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

• Marginal note:Trust not disqualified

  (4) For the purposes of the definition “pre-1972 spousal trust” in subsection (1), subparagraphs 70(6)(b)(ii) and (6.1)(b)(ii) and paragraphs 73(1.01)(c) and 104(4)(a), where 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 the payment, or provision for payment, as the case may be, by the trust of

  • (a) 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

  • (b) any income or profits tax payable by the trust in respect of any income of the trust.

• 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 definition “excluded right or interest” in subsection 128.1(10) and the definition “personal trust” in 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), subsection 107(1), paragraph (j) of the definition “excluded right or interest” in subsection 128.1(10) and the definition “personal trust” in 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) where all the beneficial interests in a particular inter vivos 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.