Budget Implementation Act, 2016, No. 2 (S.C. 2016, c. 12)

(c) the property is capital property used in, or property described in the inventory of, a business carried on by the trust through a permanent establishment (as defined by regulation) in Canada immediately before the time of the distribution.

Marginal note:Testamentary trust not disqualified

(1.1) For the purpose of the definition testamentary trust in subsection (1), a contribution to a particular trust does not include

• (a) a qualifying expenditure (within the meaning of section 118.04 or 118.041) 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).

(d) a property included in Class 14.1 of Schedule II to the Income Tax Regulations, used by a person or partnership referred to in any of subparagraphs (a)(i) to (v), or by a personal trust from which the individual acquired the property, in the course of carrying on a farming or fishing business in Canada; (bien agricole ou de pêche admissible)

Marginal note:Certificates for dispositions

(5.2) If a non-resident person has, in respect of a disposition, or a proposed disposition, in a taxation year to a taxpayer of property (other than excluded property) that is a life insurance policy in Canada, a Canadian resource property, a property (other than capital property) that is real property, or an immovable, situated in Canada, a timber resource property, depreciable property that is a taxable Canadian property or any interest in, or for civil law any right in, or any option in respect of, a property to which this subsection applies (whether or not that property exists),

(C) by the individual’s estate if subsection (5.1) applies to the gift and the particular year is the taxation year in which the individual dies or the preceding taxation year, or

(B) by the trust if

• (I) the trust is an individual’s estate,

• (II) subsection (5.1) applies to the gift, and

• (III) the particular year is a taxation year

  1 in which the estate is the individual’s graduated rate estate, and

  2 that precedes the taxation year in which the gift is made, or

(C) by the trust if

• (I) the end of the particular year is determined by paragraph 104(13.4)(a) because of an individual’s death,

• (II) the gift is made after the particular year and on or before the trust’s filing-due date for the particular year, and

• (III) the subject of the gift is property that is held by the trust at the time of the individual’s death or is property that was substituted for that property; (total des dons de bienfaisance)

(C) by the individual’s estate if subsection (5.1) applies to the gift and the particular year is the taxation year in which the individual dies or the preceding taxation year, or

(B) by the trust if

• (I) the trust is an individual’s estate,

• (II) subsection (5.1) applies to the gift, and

• (III) the particular year is a taxation year

  1 in which the estate is the individual’s graduated rate estate, and

  2 that precedes the taxation year in which the gift is made, or

(C) by the trust if

• (I) the end of the particular year is determined by paragraph 104(13.4)(a) because of an individual’s death,

• (II) the gift is made after the particular year and on or before the trust’s filing-due date for the particular year, and

• (III) the subject of the gift is property that is held by the trust at the time of the individual’s death or is property that was substituted for that property; (total des dons de biens culturels)

(A) by the individual, or the individual’s spouse or common-law partner, in the particular year or any of the 10 preceding taxation years,

(C) by the individual’s estate if subsection (5.1) applies to the gift and the particular year is the taxation year in which the individual dies or the preceding taxation year, or

(B) by the trust if

• (I) the trust is an individual’s estate,

• (II) subsection (5.1) applies to the gift, and

• (III) the particular year is a taxation year

  1 in which the estate is the individual’s graduated rate estate, and

  2 that precedes the taxation year in which the gift is made, or

(C) by the trust if

• (I) the end of the particular year is determined by paragraph 104(13.4)(a) because of an individual’s death,

• (II) the gift is made after the particular year and on or before the trust’s filing-due date for the particular year, and

• (III) the subject of the gift is property that is held by the trust at the time of the individual’s death or is property that was substituted for that property; (total des dons de biens écosensibles)

Marginal note:Gifts by graduated rate estate

(5.1) This subsection applies to a gift made by an individual’s graduated rate estate (determined without reference to paragraph (a) of the definition graduated rate estate in subsection 248(1)) if the gift is made no more than 60 months after the individual’s death, the death occurs after 2015 and either

(c) either,

• (i) if the taxpayer is an individual’s graduated rate estate,

  • (A) the individual dealt at arm’s length with the donee immediately before the individual’s death, and

  • (B) the graduated rate estate deals at arm’s length with the donee (determined without reference to paragraph 251(1)(b)), or

• (ii) if subparagraph (i) does not apply, the taxpayer deals at arm’s length with the donee; and