Economic Action Plan 2014 Act, No. 2 (S.C. 2014, c. 39)

Marginal note:NISA Fund No. 2

(5.1) Every trust that holds an interest in a NISA Fund No. 2 that was transferred to it in circumstances to which paragraph 70(6.1)(b) applied is deemed, at the end of the day on which the spouse or common-law partner referred to in that paragraph dies, to have been paid an amount out of the fund equal to the balance at the end of that day in the fund so transferred.

(a.3) in the case of a trust deemed by subsection 143(1) to exist in respect of a congregation that is a constituent part of a religious organization, such part of its income for the year as became payable in the year to a beneficiary;

(b) in any other case, the amount that the trust claims not exceeding the amount, if any, determined by the formula

Marginal note:Limitation — amount claimed as gift

(7.02) No deduction may be made under subsection (6) in computing the income for a taxation year of an estate that arose on and as a consequence of an individual’s death in respect of a payment to the extent that the payment is a gift in respect of which an amount is deducted under section 118.1 for any taxation year in computing the individual’s tax payable under this Part.

Marginal note:Invalid designation

(13.3) Any designation made under subsection (13.1) or (13.2) by a trust in its return of income under this Part for a taxation year is invalid if the trust’s taxable income for the year, determined without reference to this subsection, is greater than nil.

Marginal note:Death of beneficiary — spousal and similar trusts

(13.4) If an individual’s death occurs on a day in a particular taxation year of a trust and the death is the death or later death, as the case may be, referred to in paragraph (4)(a), (a.1) or (a.4) in respect of the trust,

• (a) the particular year is deemed to end at the end of that day, a new taxation year of the trust is deemed to begin immediately after that day and, for the purpose of determining the trust’s fiscal period after the new taxation year began, the trust is deemed not to have established a fiscal period before the new taxation year began;

• (b) the trust’s income (determined without reference to subsections (6) and (12)) for the particular year is, notwithstanding subsection (24), deemed

  • (i) to have become payable in the year to the individual, and

  • (ii) not

    • (A) to have become payable to another beneficiary, or

    • (B) to be included under subsection 105(2) in computing the individual’s income; and

• (c) in respect of the particular year

  • (i) the references in paragraphs 150(1)(c) and (a) of the definition “balance-due day” in subsection 248(1) to “year” are to be read as “calendar year in which the year ends”, and

  • (ii) the reference in subsection 204(2) of the Income Tax Regulations to “end of the taxation year” is to be read as “end of the calendar year in which the taxation year ends”.

Marginal note:SIFT deemed dividend

(16) If an amount (in this subsection and section 122 referred to as the trust’s “non-deductible distributions amount” for the taxation year) is determined under subparagraph (ii) of the description of B in paragraph (6)(b) in respect of a SIFT trust for a taxation year

(A) from a disposition of a capital property that is qualified farm or fishing property (as defined for the purpose of section 110.6) of the beneficiary equal to the amount determined by the formula

Marginal note:Deceased beneficiary of graduated rate estate

(23) In the case of a trust that is a graduated rate estate,

Marginal note:Pension benefits

(27) If a trust, in a taxation year in which it is resident in Canada and is the graduated rate estate of an individual, receives a superannuation or pension benefit or a benefit out of or under a foreign retirement arrangement and designates, in its return of income for the year under this Part, an amount in respect of a beneficiary under the trust equal to the portion (in this subsection referred to as the “beneficiary’s share”) of the benefit that

(ii) the beneficiary was a spouse or common-law partner of the individual,

(i) is a single amount (as defined in subsection 147.1(1)), other than an amount that relates to an actuarial surplus, paid by a registered pension plan to the trust as a consequence of the individual’s death and the individual was, at the time of death, a spouse or common-law partner of the beneficiary, or

(e) where the benefit is a single amount (as defined in subsection 147.1(1)) paid by a registered pension plan to the trust as a consequence of the individual’s death,

• (i) if the beneficiary was, immediately before the death, a child or grandchild of the individual who, because of mental or physical infirmity, was financially dependent on the individual for support, the beneficiary’s share of the benefit (other than any portion of it that relates to an actuarial surplus) is deemed, for the purposes of paragraph 60(l), to be an amount from a registered pension plan included in computing the beneficiary’s income for the particular year as a payment described in clause 60(l)(v)(B.01), and

• (ii) if the beneficiary was, at the time of the death, under 18 years of age and a child or grandchild of the individual, the beneficiary’s share of the benefit (other than any portion of it that relates to an actuarial surplus) is deemed, for the purposes of paragraph 60(l), to be an amount from a registered pension plan included in computing the beneficiary’s income for the particular year as a payment described in subclause 60(l)(v)(B.1)(II).

(a) a trust, in a taxation year (in this subsection referred to as the “trust year”) in which it is resident in Canada and is the graduated rate estate of an individual, receives an amount from a deferred profit sharing plan as a consequence of the individual’s death,

(b) the individual was an employee of an employer who participated in the plan on behalf of the individual, and

(e) can reasonably be considered (having regard to all the circumstances including the terms and conditions of the trust arrangement) to be part of the amount that was included under subsection (13) in computing the income for a particular taxation year of a beneficiary under the trust who was, at the time of the death, the individual’s spouse or common-law partner, and

Marginal note:Death benefit

(28) If the graduated rate estate of an individual receives an amount on or after the individual’s death in recognition of the individual’s service in an office or employment, the portion of the amount that can reasonably be considered (having regard to all the circumstances including the terms and conditions of the trust arrangement) to be paid or payable at any time to a beneficiary under the estate is deemed

• (a) to be an amount received by the beneficiary at that time on or after the death in recognition of the individual’s service in an office or employment; and

• (b) except for purposes of this subsection, not to have been received by the estate.