Principal Issues: Whether it is possible for a trust, which provides that the amount which is payable to the income beneficiary in any year during the beneficiary's lifetime is defined as a percentage of the total value of the trust property at the commencement of that year, to qualify as a spousal trust, an alter ego trust or a joint spousal or common-law partner trust.
Position: No.
Reasons: In order for a trust created by a taxpayer to qualify as a spousal trust, an alter ego trust or a joint spousal or common-law partner trust, the taxpayer's spouse or common-law partner in the case of a spousal trust, the taxpayer in the case of an alter ego trust, and the taxpayer in combination with the taxpayer's spouse or common-law partner in the case of a joint spousal or common-law partner trust, must be entitled to receive all of the income of the trust. For the purposes of this requirement, the income of a trust, as provided under subsection 108(3) of the Income Tax Act, is the income of the trust computed for trust accounting purposes minus certain specified dividends.