Income Tax Act

Marginal note:Application of s. 127.5

127.55 Section 127.5 does not apply in respect of

• (a) a return of income of an individual filed under subsection 70(2), paragraph 104(23)(d) or 128(2)(e) or subsection 150(4);

• (b) [Repealed, 2001, c. 17, s. 121(1)]

• (c) an individual for the taxation year in which the individual dies;

• (d) an individual for the 1986 taxation year if the individual dies in 1987;

• (e) a trust described in paragraph 104(4)(a) or (a.1) for its taxation year that includes the day determined in respect of the trust under that paragraph; and

• (f) a taxation year of a trust throughout which the trust is

  • (i) a trust referred to in paragraph 150(1.2)(f), (g), (i), (j), (l) or (n),

  • (ii) an investment fund (as defined in subsection 251.2(1)) unless the trust qualifies as an investment fund because of or in connection with a transaction or event or series of transactions or events one of the main purposes of which is to avoid tax under this Division,

  • (iii) a trust

    • (A) all of the beneficiaries of which are any combination of

      • (I) persons exempt from tax under this Division, and

      • (II) trusts described in this subparagraph,

    • (B) under which no person (other than a person described in subclause (A)(I) or (II)) can be added as a beneficiary,

    • (C) in which all interests are fixed interests (as defined in subsection 94(1)), and

    • (D) that is irrevocable,

  • (iv) a trust that is exempt from tax under this Part,

  • (v) a trust described in subsection 143(1),

  • (vi) a unit trust if the total fair market value of the units of the trust that are listed on a designated stock exchange represents all or substantially all of the total fair market value of all the units of the trust,

  • (vii) an employee ownership trust,

  • (viii) a trust if

    • (A) it is established

      • (I) under a law of Canada or a province and is for the benefit of an Indigenous group, community or people that holds rights recognized and affirmed by section 35 of the Constitution Act, 1982, or

      • (II) under a treaty, or a settlement agreement, between His Majesty in right of Canada, or His Majesty in right of a province, and an Indigenous group, community or people described in subclause (I), and

    • (B) all or substantially all of the contributions to the trust before the end of the taxation year are amounts paid under the law, treaty or settlement agreement described in subclause (A)(I) or (II) or are reasonably traceable to those amounts, or

  • (ix) a trust, all of the beneficiaries of which are any combination of

    • (A) all of the members of an Indigenous group, community or people that holds rights recognized and affirmed by section 35 of the Constitution Act, 1982,

    • (B) a public body performing a function of government in Canada within the meaning of paragraph 149(1)(c) in relation to an Indigenous group, community or people that holds rights recognized and affirmed by section 35 of the Constitution Act, 1982,

    • (C) a person described under paragraph 149(1)(f) or (l) that is organized and operated primarily for health, education, social welfare or community improvement for the benefit of the members of an Indigenous group, community or people that holds rights recognized and affirmed by section 35 of the Constitution Act, 1982,

    • (D) a corporation all of the shares (except directors’ qualifying shares) or of the capital of which are owned by a person described in clause (B) or clause (C), a trust described in subparagraph (viii), another corporation that is described in this clause or a combination of those persons, and

    • (E) a trust described in subparagraph (viii).