Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Whether it is possible for 2 spouses to settle a trust and comply with 73(1.01)?
Position: Yes.
Reasons: Provided that all of the conditions in 73(1), (1.01) and (1.02) are met.
XXXXXXXXXX J.D. Brooks
2001-009905
January 23, 2002
Dear XXXXXXXXXX:
This is in reply to your letter of August 24, 2001, in which you queried whether it is possible for two persons who are married to each other to jointly settle one trust which meets the conditions set out in clause 73(1.01)(c)(iii)(A) of the Income Tax Act. In the hypothetical situation you described, both spouses have attained 65 years of age. The two spouses would contribute some property that is owned jointly and other property that is owned individually.
The situation set out in your letter appears to relate to an actual situation. Confirmation of the tax implications of proposed transactions is given only in reply to an advance income tax ruling request submitted in the manner set out in Information Circular 70 6R4. While we are unable to comment on the particular situation described in your letter, the following general comments may be of assistance to you.
Subject to subsection 73(1.02), subsection 73(1.01) applies where property is transferred by an individual to a trust created by the individual where, among other things, the conditions in subparagraph 73(1.01)(c)(iii) are met. If a trust was created by the contribution of property thereto jointly by an individual and the individual's spouse and no other person, the trust would be considered to be created by both individuals for purposes of subsection 73(1.01). Thus, as long as a trust was created by both individuals and no-one else, and the other conditions in subsections 73(1), (1.01) and (1.02) were met, a transfer of property by either spouse or both spouses to the trust after its creation would be eligible for the "rollover" provided in subsection 73(1).
The comments above represent an expression of opinion which, as indicated in paragraph 22 of Information Circular 70-6R4, is not an advance income tax ruling and, accordingly, is not binding on the Canada Customs and Revenue Agency.
Yours truly,
T. Murphy, Manager
Trusts Section
International and Trusts Division
Income Tax Rulings Directorate
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