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.
CANADIAN TAX FOUNDATION NOVEMBER, 1992
QUESTION 59
Trusts of Which Trustees and Beneficiaries are Indians Situate on a Reserve
A trust is established having as its trustees Indians situate on a reserve. The trust agreement provides that the beneficiaries of the trust are Indians living on a reserve and that all of the income of the trust is payable in each taxation year of the trust to its beneficiaries. Will the trust's income received by the beneficiaries be considered to be the personal property of an Indian situate on a reserve for purposes of the exemption from taxation contained in the Indian Act?
ANSWER:
The Department's position has been that trust income of an Indian was exempt if the location of the trust, which in turn depended on the residence of the trustees, was on a reserve. The trust itself, not being an Indian, would be taxable to the extent it otherwise would be. This position is based on a single test, the situs of the trust. The Williams case (92 DTC 6320), which may impact on this position, is presently being studied to determine if our present position is still valid.
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© Her Majesty the Queen in Right of Canada, 1992
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© Sa Majesté la Reine du Chef du Canada, 1992