Cases
Olympia Trust Company v. Canada, 2015 FCA 279
Ryder JA affirmed a finding of Bocock J that a Canadian trust company, which was the trustee for self-directed RRSPs that had purchased shares...
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| Tax Topics - Income Tax Act - Section 116 - Subsection 116(5) | RRSP trustee, not annuitant, was the "purchaser" | 200 |
| Tax Topics - General Concepts - Evidence | contract informed by surrounding circumstances | 59 |
Fraser v. The Queen, 91 DTC 5123 (FCTD), aff'd 95 DTC 5684 (FCA)
Approximately 100 taxpayers invested in a pool of mortgages by paying a subscription price for "units" to two companies, that used the proceeds to...
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| Tax Topics - Income Tax Act - Section 75 - Subsection 75(2) | 60 |
Smith v. The Queen, 87 DTC 5355, [1987] 2 CTC 138 (FCTD)
Under a shareholder's agreement containing a right of first refusal, it was agreed that the shares held by the taxpayer would be sold in equal...
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| Tax Topics - Income Tax Act - Section 173 - Subsection 173(1) | 88 |
Drescher v. The Queen, 85 DTC 5064, [1985] 1CTC 229 (FCTD)
It was found that family members each bought lottery tickets on the understanding that gains would be shared among them. It accordingly was held...
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| Tax Topics - Statutory Interpretation - Provincial Law | 52 |
Bouchard v. The Queen, 83 DTC 5193, [1983] CTC 173 (FCTD)
It was found that real property, which had been purchased by the plaintiff and his wife, had been held by them in trust over a 13-year period for...
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| Tax Topics - General Concepts - Effective Date | parol trust over land has effect for tax purposes from its formation - at least, if subsequently confirmed in writing | 160 |
| Tax Topics - General Concepts - Evidence | 74 | |
| Tax Topics - Income Tax Act - Section 6 - Subsection 6(1) - Paragraph 6(1)(e) | 70 | |
| Tax Topics - Income Tax Act - Section 69 - Subsection 69(1) - Paragraph 69(1)(b) | 83 |
Atinco Paper Products Ltd. v. The Queen, 78 DTC 6387, [1978] CTC 566 (FCA)
Gifts were made by the supposed settlor of a trust to her nephews absolutely unencumbered by any limitation on them other than an expressed hope...
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| Tax Topics - General Concepts - Evidence | 18 | |
| Tax Topics - General Concepts - Tax Avoidance | 58 |
Ablan Leon (1964) Ltd. v. MNR, 76 DTC 6280, [1976] CTC 506 (FCA)
Trusts were not formed when a series of cheques were sent by the supposed settlor to another individual. "From the point of view of the settlor,...
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| Tax Topics - Income Tax Act - Section 9 - Nature of Income | 105 | |
| Tax Topics - Income Tax Act - Section 96 | 31 | |
| Tax Topics - Statutory Interpretation - Provincial Law | 101 |
The Queen v. Esskay Farms Ltd., 76 DTC 6010, [1976] CTC 24 (FCTD)
The taxpayer, in order to defer pursuant to s. 20(1)(n) the recognition of gain on the sale of land to the City of Calgary, agreed to sell the...
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| Tax Topics - General Concepts - Agency | weight given to written agreement terms in finding that intermediary purchased as principal | 122 |
| Tax Topics - General Concepts - Evidence | 81 | |
| Tax Topics - General Concepts - Sham | no sham if documents describe intended legal rights | 354 |
| Tax Topics - General Concepts - Tax Avoidance | no sham if documents describe intended legal rights | 354 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(1) - Paragraph 20(1)(n) | 199 | |
| Tax Topics - Income Tax Act - Section 245 - Old | 57 | |
| Tax Topics - Income Tax Act - Section 246 - Subsection 246(1) | 195 | |
| Tax Topics - Statutory Interpretation - Provincial Law | 58 |
Kingsdale Securities Co. Ltd. v. The Queen, 74 DTC 6674, [1975] CTC 10 (FCA)
An alleged settlement of trusts (prior to the date of execution of the trust deeds) did not occur due to the lack of the requisite certainty of...
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| Tax Topics - General Concepts - Effective Date | 52 | |
| Tax Topics - Income Tax Act - Section 169 | 84 | |
| Tax Topics - Income Tax Act - Section 172 - Subsection 172(2) | 84 | |
| Tax Topics - Income Tax Act - Section 96 | 19 |
Settled Estates Ltd. v. Minister of National Revenue, 60 DTC 1128, [1960] CTC 173, [1960] S.C.R. 606
The combined presumption in ss. 104(1) and (2) that executors are deemed to be individuals for purposes of taxation of the estate did not apply...
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Individual | 111 | |
| Tax Topics - Statutory Interpretation - Interpretation Act - Subsection 15(2) | contrary intention present | 51 |
See Also
Goldman v. The Queen, 2021 TCC 13
The taxpayer was designated as the beneficiary of her mother’s RRSP, but was orally told by her mother that this was occurring on the condition...
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| Tax Topics - Income Tax Act - Section 160 - Subsection 160(1) | s. 160(1) did not apply to a transfer to an individual qua trustee of a valid oral trust | 483 |
| Tax Topics - Income Tax Act - Section 159 - Subsection 159(3) | CRA could have assessed taxpayer qua trustee, for the s. 160(1) liability of her trust arising on its settlement, under s. 159(3) given the distribution of the corpus without a certificate | 193 |
| Tax Topics - Other Legislation/Constitution - Federal - Tax Court of Canada Rules (General Procedure) - Section 49 - Subsection 49(1) | “taking note” of a fact pleaded by the taxpayer is not a permitted Crown response | 131 |
| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(1) | oral instructions, before her death, by mother to daughter re application of the proceeds of her RRSP gave rise to a trust | 208 |
Evoy Estate v. The Queen, 2016 TCC 263
The will of a Canadian-resident individual established three separate testamentary trusts for each of his three children and their respective...
Howard v. Commissioner of Taxation, [2014] HCA 21
The taxpayer and four others formed a joint venture to acquire, lease and sell a golf course. The taxpayer attempted to have a corporation of...
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| Tax Topics - Income Tax Act - Section 56 - Subsection 56(4) | agreement assigned rights to proceeds of law suit rather than entitlement under law suit | 344 |
| Tax Topics - Income Tax Act - Section 9 - Compensation Payments | damages not corporate income as not received qua director | 191 |
| Tax Topics - Income Tax Act - Section 9 - Nature of Income | agreement assigned rights to proceeds of law suit rather than entitlement under law suit | 344 |
De Mond v. R., 99 DTC 893, [1999] 4 CTC 2007 (TCC)
A trust established by the taxpayer was found to be a bare trust given that he could cause the trust property to revert to him at any time, could...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(1) | taxpayer characterized as playing the role of settlor, trustee and beneficiary of his “own” trust, so that it was a bare trust | 412 |
Stricker Oolup v. The Queen, 2003 DTC 2142, 2003 TCC 947 (Informal Procedure)
The taxpayer was able to rebut the presumption of resulting trust in favour of the estate when her grandmother, who with the taxpayer had been the...
Collins v. The Queen, 96 DTC 1034 (TCC)
Before rejecting a submission that the taxpayer held half of his shares of a private company on a constructive or resulting trust for his wife,...
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| Tax Topics - General Concepts - Ownership | ownership means beneficial ownership | 27 |
| Tax Topics - General Concepts - Substance | 108 |
Karavos v. The Queen, 95 DTC 1001 (TCC)
Before finding that, in any event, the taxpayer had failed to establish that one-half of his interest in a building was held on a constructive...
Gillis v. MNR, 91 DTC 1457, [1991] 2 CTC 2708 (TCC)
The presumption under common law and s. 21 of the Matrimonial Property Act (Nova Scotia) of resulting trust with respect to a transfer of property...
Nelson v. MNR, 91 DTC 37 (TCC)
Insufficient evidence was advanced to support the taxpayers' position that 1/2 of a farm was held on a constructive trust.
Fraser v. MNR, 89 DTC 620 (TCC)
A vehicle under which a company ("Marlowe-Yeoman") invested in and held mortgages on behalf of investors, who had the right to redeem their...
Zeidler v. Campbell (1988), 29 E.T.R. 113 (Alta. Q.B.)
A voting trust agreement did not give rise to a trust in light inter alia of the fact that the alleged trustee did not acquire any property in the...
Bank of Nova Scotia v. Societé General (Canada), [1988] 4 WWR 232 (Alta. C.A.)
An operator under the 1981 Canadian Association of Petroleum Landmen Operating Procedure held funds received from the non-operators in trust given...
Miconi v. MNR, 85 DTC 696, [1985] 2 CTC 2457 (TCC)
A real estate property was found to be beneficially owned by the taxpayer rather than by a corporation controlled by him, with the result that...
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| Tax Topics - Income Tax Act - Section 15 - Subsection 15(2) | 95 |
Administrative Policy
29 November 2022 CTF Roundtable Q. 9, 2022-0950531C6 - Multiple Wills and T3 Reporting
An individual has two wills, only one of which is subject to probate. The two wills are administered separately, perhaps with different...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(1) | there is only one estate (and one T3 return) for a deceased, even if there are multiple wills | 111 |
26 April 2013 External T.I. 2013-0486211E5 - Multiple Trusts
CRA provided general comments respecting several situations where there are several testamentary trusts set up such that the spouse of a deceased...
28 December 2011 External T.I. 2011-0430261E5 - Subsection 104(2) of the Act
where a taxpayer dies leaving his property equally to three testamentary trusts of which his surviving spouse is the only capital and income...
5 March 2010 Internal T.I. 2009-0346261I7 F - Minimisation des pertes
Before concluding that a testamentary trust can qualify as an estate beneficiary for s. 112(3.2)(b) purposes, the Directorate stated:
[A]lthough...
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| Tax Topics - Income Tax Act - Section 112 - Subsection 112(3.2) - Paragraph 112(3.2)(b) | a testamentary trust can qualify as an estate beneficiary for s. 112(3.2)(b) purposes | 208 |
| Tax Topics - Income Tax Act - Section 112 - Subsection 112(3.2) - Paragraph 112(3.2)(a) | respective purviews of ss. 112(3.2)(a)(ii)(A), (B) or (C) | 118 |
13 June 2007 External T.I. 2006-0178031E5 F - Biens détenus par des fiducies testamentaires
The will of Mr. A provides for transfers to three testamentary trusts(C-1, D-1 and E-1) for each of his three children and their children, and...
23 February 1999 External T.I. 9809755 - IN-TRUST ACCOUNTS
Where "in-trust accounts" are set up by parents for holding mutual fund investments on behalf of their minor children, the certainty of intention...
19 February 1999 Internal T.I. 9831647 - LAWYER'S TRUST ACCOUNT
Discussion of background to the position in IT-129R, para. 10, respecting the deposit of funds with lawyers pending the outcome of litigation.
22 September 1997 External T.I. 9717475 - IN-TRUST ACCOUNTS
Where an "in trust" account is set up to hold a mutual fund investment on behalf of children, the certainty of intention to set up a trust...
Income Tax Technical News, No. 7, 21 February 1996 (cancelled)
Where property is held by a bare trust, RC will ignore the trust for income tax purposes and will consider the transferor/settlor to be the owner...
8 March 1995 External T.I. 9433255 - CURTESY ELECTION - WHETHER A TRUST
A courtesy interest in a deceased married woman's estate that the surviving widower elects to receive, is not a trust but, rather, an interest in...
18 February 1994 External T.I. 9334285 F - Bare Trusts
Where a settlor transfers property to a trust having the characteristics according with RC's understanding of a bare trust (the settlor is the...
24 February 1993 T.I. (Tax Window, No. 29, p. 14, ¶2439)
The Crown can be constituted a trustee only by the express provisions of an Act of Parliament. Where the Crown is a trustee, the trustee will not...
31 March 1993 T.I. (Tax Window, No. 29, p. 8, ¶2444)
A trust that is a grantor trust for U.S. purposes will be treated as a bare trust for Canadian purposes, with the result that the settlor will be...
25 January 1993 Memorandum (Tax Window, No. 28, p. 22, ¶2398)
Two trusts need not operate concurrently nor need the trustees be the same for a designation under s. 104(2) to be made. Any such designation is...
October 1992 Central Region Rulings Directorate Tax Seminar, Q.Q (May 1993 Access Letter, p. 234)
In order for a bare trust to exist for purposes of the Act, the declaration of trust must have been entered into at the time the property in...
23 January 1992 T.I. (Tax Window, No. 16, p. 21, ¶1712)
A trust under which the trustee does not have any significant powers or responsibilities and does not take any action regarding the trust property...
18 November 1991 Memorandum (Tax Window, No. 11, p. 6, ¶1536)
If a trust is used to achieve a beneficial result for tax purposes not otherwise available to the settlor, this usually is an indication that the...
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| Tax Topics - Income Tax Act - 101-110 - Section 102 - Subsection 102(1) | 34 |
10 May 1990 T.I. (October 1990 Access Letter, ¶1471)
Where the parties to an arrangement intend to create a trust for tax purposes and the custodian of the property acts as a trustee under an...
27 October 89 Memorandum (March 1990 Access Letter, ¶1147)
No provision of the Act allows a usufruct to be treated as a trust.
89 C.M.TC - "Bare Trusts"
general discussion
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Disposition | 43 |
88 C.R. - Q.31
A constructive trust is subject to the trust provisions of the Act.
88 C.R. - Q.32
Where a bare trust exists at common law, ss.104(1) and (2) will apply because the transferor transfers the legal title while retaining the...
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| Tax Topics - Income Tax Act - Section 75 - Subsection 75(2) | 22 |
80 C.R. - Q.12
A minor cannot hold shares in a corporation and, in an estate freezing context, where a trust is used to hold shares for a minor, then it is...
79 C.R. - Q.24
RC usually considers settlor/beneficiary as the actual owner of the property in a bare trust, except that s. 104(1) or (2) is applied for the...
IT-129R "Lawyers' Trust Accounts and Disbursements"
Where funds are deposited with a lawyer by litigants for safekeeping and investment pending a court order or settlement, the income generated is...
Articles
Elie Roth, Tim Youdan, Chris Anderson, Kim Brown, "Taxation of Trusts Resident in Canada", Chapter 3 of Canadian Taxation of Trusts, (Canadian Tax Foundation), 2016.
Purpose of s. 104(2) (pp. 246-7)
Lloyd F. Raphael has stated that the "apparent purpose of [subsection 104(2)] is to prevent a settlor from...
Keith R. Hennel, "Escrow Arrangements in Acquisition Agreements: What Are You Creating?", CCH Tax Topics, No. 2176, November 21, 2013, p. 1
Whether an escrow arrangement represents a trust (p. 2)
As indicated by other commentators, poorly drafted escrow arrangements have resulted in...