See Also
Commissioner of Taxation v Carter, [2022] HCA 10
The respondent taxpayers were the beneficiaries of an inter vivos trust settled by their father. Under the terms of the trust, they were entitled...
Caplan v. Agence du revenu du Québec, 2019 QCCQ 3269
Two university-age children received income-distribution cheques from the discretionary family trust, and endorsed them to their father (who was...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(13) | family trust income purportedly distributed to the children beneficiaries was in fact received by the father as beneficiary | 258 |
Lewski v Commissioner of Taxation, [2017] FCAFC 145
On June 30, 2006, the trustee of a trust resolved that 100% of all of its income for the year then ending would be paid, applied and set aside to...
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| Tax Topics - Income Tax Act - Section 18 - Subsection 18(1) - Paragraph 18(1)(a) - Incurring of Expense | obligation to pay purchase price was incurred on agreement date rather than subsequent closing | 430 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(8) - Paragraph 248(8)(b) | since the taxpayer through her husband as agent had knowledge of an income distribution, her subsequent purported disclaimer was not immediate | 304 |
| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(13) | a trust income declaration that was subject to a tax contingency did not result in an income inclusion to the beneficiary | 149 |
| Tax Topics - General Concepts - Agency | knowledge of agent imputed to principal | 217 |
Hall v. The Queen, 2003 DTC 779, 2003 TCC 410 (Informal Procedure)
Interest income of an estate in respect of which the executor, a trust company, issued T5 slips to the taxpayer beneficiaries was not payable to...
Degrace Family Trust v. The Queen, 99 DTC 453 (TCC)
In finding that trust property spent by Mrs. Degrace, the sole trustee of a family trust, on such matters as mortgage payments, decorating costs,...
Langer Family Trust v. MNR, 92 DTC 1055, [1992] 1 CTC 2119 (TCC)
Trustees of a family trust used amounts withdrawn from the bank account of the family corporation to pay various personal expenses (which in three...
Ginsburg v. MNR, 92 DTC 1774, [1992] 2 CTC 2152 (TCC)
The taxpayer was entitled under the will of her late husband to all the income from the residue of his estate under a spousal trust, and received...
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(8) - Paragraph 248(8)(b) | backdated renunciation was ineffective | 166 |
Grayson v. MNR, 90 DTC 1108, [1990] 1 CTC 2303 (TCC)
A deceased friend of the taxpayer had provided in his will for the devising of all his property to the taxpayer. Although the will did not specify...
Administrative Policy
3 November 2023 APFF Financial Strategies and Instruments Roundtable Q. 8, 2023-0976901C6 F - RPP survivor benefit flowing through a GRE
CRA indicated that s. 104(24) would be satisfied regarding the distribution by an estate of a pension benefit received by it to the sole...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(27) | full flow-through of a pension benefit received by the estate to the surviving spouse for s. 60(j) purposes by the estate issuing her a note | 287 |
| Tax Topics - Income Tax Act - Section 60 - Paragraph 60(j) | flow-through of pension benefit by estate to surviving spouse through cash and note issuance/ no FHSA deduction for s. 104(27) amount | 381 |
3 May 2022 CALU Roundtable Q. 9, 2022-0928891C6 - Subsection 104(6)
CRA indicated that the fact that the distribution was paid in the year did not establish (e.g., under s. 104(24)) that it was payable for the...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(6) | a trust cannot get a deduction for distributing phantom income if the trust deed lacks a phantom income clause | 377 |
15 June 2021 Internal T.I. 2020-0867081I7 - Pension Benefit Received by Estate
After the Office of the Public Trustee for the Province (the “Trustee”) finalized the Estate of the deceased, received a CRA clearance...
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Graduated Rate Estate | no CRA authority to extend 36-month period | 180 |
| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(27) | s. 104(27) unavailable after estate ceased to be a GRE | 96 |
7 October 2021 APFF Financial Strategies and Instruments Roundtable Q. 10, 2021-0896101C6 F - Death of seg. fund policyholder - income allocatio
In light of s. 138.1(1)(f), the taxable income of a related segregated fund trust is deemed for the purposes of computing the income of the trust...
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| Tax Topics - Income Tax Act - Section 138.1 - Subsection 138.1(1) - Paragraph 138.1(1)(f) | accrued income under a segregated fund is not deemed by s. 138.1(1)(f) to be a right or thing | 382 |
15 June 2021 STEP Roundtable Q. 14, 2021-0883041C6 - Extending the GRE 36-month period
CRA stated that where an estate receives a lump sum from a pension plan of the deceased beyond the 36-month period in which it could qualify as a...
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Graduated Rate Estate | no CRA discretion to extend the 36 month period | 125 |
| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(27) | s. 104(27) designation could not be made for a pension amount received after a trust ceased to be a GRE | 170 |
7 October 2020 APFF Roundtable Q. 17, 2020-0845821C6 F - Part IV tax and trust
A personal trust wholly-owns Opco, which also has a December 31 year end, and has a corporate beneficiary ("Holdco") with a September 30 taxation...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(19) | various applications of proposition that an s. 104(19) designation is not effective until the trust’s year end | 761 |
| Tax Topics - Income Tax Act - Section 186 - Subsection 186(2) | s. 104(13), unlike s. 104(19), can apply contemporaneously with a trust dividend distribution, and ss. 186(2) and 251(1)(b) can apply synergistically | 440 |
5 October 2018 APFF Roundtable Q. 2, 2018-0768901C6 F - Deemed dividend payable to trust beneficiary
Following the death of the spouse respecting a spousal trust, the trust’s sole asset (a private company) is wound-up, thereby giving rise to a...
14 September 2017 Roundtable, 2017-0703921C6 - 2017 CPA Alberta Q25: Estates – Income Paid or Payable
An individual’s will simply provides for the executor to pay all debts, and distribute the estate in equal portions to the three adult children....
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(6) | income of fixed-interest trust is not per se payable | 203 |
13 June 2017 STEP Roundtable Q. 10, 2017-0693351C6 - 104(6), (13), (24) and ITTN 11
A father who is the trustee of a discretionary family trust reimburses himself out of the trust funds for itemized expense of restaurant meals of...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(6) | a discretionary family trust may be unable to establish that expenses reimbursed by it were for the children’s benefit | 305 |
1 November 2016 Internal T.I. 2016-0663971I7 - 104(6)(b), whether amount became payable
Although the trust indenture for a family trust specified that no “designated person” beneficiary could receive or otherwise obtain the use of...
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| Tax Topics - Income Tax Act - 101-110 - Section 105 - Subsection 105(1) | income distributions to minor beneficiaries contrary to trust deed included under s. 105(1) | 151 |
| Tax Topics - General Concepts - Illegality | distribution contrary to trust deed not considered to be payable | 137 |
| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(6) | prohibited distribution from trust | 76 |
25 July 2016 External T.I. 2016-0630781E5 - 104(13.3) and a CPP/QPP death benefit
Is the option to include a Canada Pension Plan (“CPP”) or Quebec Pension Plan (“QPP”) death benefit on a post-2015 T3 return will no...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(13.3) | CPP benefit generally no longer eligible under 104(13.1) | 162 |
29 November 2016 CTF Roundtable Q. 14, 2016-0669871C6 - Estate distribution
A simple Will typically directs the Executor to pay the debts and expenses of the deceased, makes specific bequests of property and finally...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(6) | income from an estate residue generally can be distributed on a deductible basis | 147 |
8 June 2016 External T.I. 2015-0604971E5 - Deemed capital gain of a trust
1) Where the power to encroach on capital is general and the trustees exercise their discretion to encroach before the end of the trust’s year...
27 April 2016 External T.I. 2016-0625001E5 F - Surplus Stripping
An individual (Mr. X), and a corporation (Holdco) wholly owned by him are the beneficiaries of a Quebec discretionary trust (Trust) holding all...
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| Tax Topics - Income Tax Act - Section 84 - Subsection 84(2) | using a trust to funnel a deemed dividend from creating PUC to a Holdco beneficiary and funnelling that PUC to the individual beneficiary, is surplus stripping | 220 |
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | funnelling deemed dividend to holdco trust beneficiary and resulting PUC to individual beneficiary/shareholder was surplus stripping | 130 |
10 June 2016 STEP Roundtable Q. 12, 2016-0634921C6 - Phantom Income
A trust realizes “phantom income,” for example, a deemed capital gain under a s. 48.1 when its shares of a CCPC become publicly listed. How...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(6) | payment in kind of distribution of phantom income | 78 |
9 October 2015 APFF Financial Strategies and Instruments Roundtable Q. 6, 2015-0595851C6 F - Income of a trust payable to a beneficiary
Where a trust distributes all of its share of the accounting profits of a partnership but its share of the taxable income of the partnership is...
2 October 2015 External T.I. 2015-0595111E5 F - Amount paid pursuant to 104(24)
Would the delivery of property from a trust to a beneficiary constitute an amount that had become payable under s. 104(24)? CRA responded:
[A]n...
5 October 2012 Roundtable, 2012-0453581C6 F - Somme payable - revenus de placements
A taxable capital gain of $375,000 was allocated to Beneficiary A of a discretionary family trust ("Trust") for which an amount is payable to him...
10 July 2013 Internal T.I. 2013-0475501I7 F - Amounts returned to trustee/beneficiary
Father and Y were the trustees of a Quebec family trust, whose beneficiaries included father and his three children. Distributions made by the...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(13) | family trust income distributed to children but repaid as reimbursement to father for family expenses was income to him, not them | 221 |
| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(6) | distributions to children immediately paid to father were deductible even though received by children as his agents | 179 |
| Tax Topics - Income Tax Act - 101-110 - Section 105 - Subsection 105(1) | payment of income distributions by children to father not a benefit under the trust | 230 |
| Tax Topics - Income Tax Act - Section 56 - Subsection 56(4) | payment of distributed family trust income by children to father did not engage s. 56(4) as it was only potential income to him | 175 |
4 March 2013 External T.I. 2011-0428661E5 - trust payments to minor
The trustees of a civil law trust exercise their discretionary power in order to allocate an amount of income or taxable capital gain to a minor...
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| Tax Topics - Income Tax Act - Section 75 - Subsection 75(2) | 142 |
30 October 2012 Ontario CTF Roundtable, 2012-0462931C6 - CTF Ontario Conference- Trust payment to Minor
In response to a query as to whether the requirement, for "proper notice" being given to a beneficiary as to a demand promissory note being given...
28 May 2012 CTF Prairie Trust Roundtable, 2012-0444891C6 - CTF Prairie Conference- Trust payment to Minor
CRA confirmed that "proper notice" of payment to a minor beneficiary by way of issuance of a promissory note can be given to the beneficiary's...
8 June 2010 STEP Roundtable Q. 2, 2010-0363071C6
For an amount to be "payable" to a beneficiary in a trust's taxation year, the beneficiary must have an enforceable right to payment by the end of...
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| Tax Topics - General Concepts - Effective Date | 153 |
8 October 2010 Roundtable, 2010-0373601C6 F - Vérification des fiducies familiales
CRA noted:
A national project was initiated in fiscal year 2005-2006 to develop an audit strategy for trusts resident in Canada. That project was...
8 October 2010 Roundtable, 2010-0373431C6 F - Montants payés ou payables par une fiducie
CRA has stated that in cases where amounts of distributed income are not paid in cash, not only must the trust issue a promissory note, but it...
1 November 2005 External T.I. 2004-0100001E5 F - Revenu d'une fiducie réputé payable
In responding to an inquiry regarding the payment by the trustee of a trust, that potentially qualified with the non-discretionary elements...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(18) - Paragraph 104(18)(c) | trust can become discretionary once all beneficiaries have attained 21 | 166 |
30 September 2005 External T.I. 2004-0093661E5 F - Revenu d'une fiducie et droit acquis par un mineur
How can the trustee designate or report an amount so that it is considered to be payable to a beneficiary?
After noting that CRA has not relied on...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(6) | a specific clause allocating taxable portion of capital gains to income beneficiary and non-taxable portion to capital beneficiary can be recognized | 161 |
8 October 2004 APFF Roundtable Q. 6, 2004-0090831C6 F - 12(4) L.I.R. et fiducies personnelles
Can a personal trust annually allocate to its beneficiaries the interest income deemed to be earned by it on a prescribed debt obligation such as...
24 June 2003 External T.I. 2003-0000695 - Capital distribution to n/r beneficiary
A resident testamentary trust, which was created to hold shares of a publicly traded corporation, distributes the shares (which are not taxable...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(6) | distribution of capital property with accrued gain entails distribution of that gain | 205 |
| Tax Topics - Income Tax Act - 101-110 - Section 107 - Subsection 107(2.11) | Pt XIII tax exigible, in absence of election, on distribution to NR of appreciated capital property | 49 |
6 March 2001 External T.I. 2000-0060825 - Employee Benefit Plan
"While most mutual fund trusts calculate the amount of income for a year to be distributed to the unitholders after the year-end, the trust...
Income Tax Technical News, No. 11, September 30, 1997, Payments Made by a Trust for the Benefit of a Minor Beneficiary".
Trust distributions for benefit of minor chidren
The trustee of a discretionary trust may decide to allocate trust income for the benefit of a...
26 August 1997 External T.I. 9722465 - AMOUNTS PAYABLE TO MINOR BENEFICIARIES
Discussion of the circumstances in which a payment made by a discretionary trust to third parties for the benefit of minor beneficiaries will be...
6 March 1997 Internal T.I. 9606227 - amount payable to a beneficiary of a discretionary trust
Legal entitlement of a beneficiary to enforce payment to her of income of the trust is established by (a) the trustees irrevocably exercising...
1 August 1996 External T.I. 9604555 - AMOUNT PAYABLE SUBSECTION 104(24)
The fact that the amount of income of an inter vivos family trust cannot be known at year-end because the only source of income of the trust is a...
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| Tax Topics - General Concepts - Payment & Receipt | promissory note normally only constitutes an enforceable right to the income where it is payable on demand | 119 |
13 June 1995 Internal T.I. 9514227 - PAYMENT INTO COURT BY AN ESTATE FOR DECEASED'S CHILDREN SECTION 104(24)
Where pension income receivable by an estate is paid pursuant to a court order into the court for the benefit of the deceased's minor children,...
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(18) | 71 |
27 March 1994 9508671 - LIFETIME CAPITAL GAINS EXEMPTION & PERSONAL TRUST
Because it is not possible for a deemed capital gain (in this instance, arising under s. 110.6(19)) to be income (or a capital gain) for trust...
81 C.R. - Q.55
Where a particular beneficiary's entitlement to or share of the income of a trust is before the courts, the amount cannot be considered to be...
IT-286R2 "Trusts - Amount Payable"
Finance
6 October 2017 APFF Financial Strategies and Instruments Roundtable, Q.11
In 2015-0595851C6, CRA indicated that where a trust distributes all of its share of the accounting profits of a partnership but its share of the...
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.
Deduction for payment for benefit of minor with parent’s consent (pp. 205-6)
The court in Langer Family Trust held that subsection 104(24)...
Jack Bernstein, "Recent Tax Issues Affecting Family Trusts", Tax Profile, Vol. 5, No. 21, May 1998, p. 247.
Jack Bernstein, "Benefitting Beneficiaries", CA Magazine, March 1996, p. 24.
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(18) | 0 |
Gabrielle Richards, "Executor's Year", Canadian Current Tax, October 1987, p. J49
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| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(6) | 0 |