22 September 1993 External T.I. 9326915 F - Income of Pooled Fund Trust

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.

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Attention:  XXXXXXXXXX

Dear Sirs:

RE:  Regulation 5000(7) of the Income Tax Act (the "Act")

This is in reply to your facsimile transmission of September 20, 1993, and further to our telephone conversation of the same date and our letter of September 13, 1993. You ask us to clarify our Answer 2 in our previous letter, specifically whether the dividend income and gross-up may be included in the pooled fund trust's income and whether a designation made under subsection 104(19) of the Act would affect our reply. You indicate that all the income of the trust is paid or payable to the beneficiaries in the year.

In our view the dividend income and the gross-up may be included in the trust's income whether or not it is paid or payable to the beneficiaries. (See Answer 5 in our previous letter.) If, however, the trust makes a designation under subsection 104(19) of the Act, the dividend income and gross-up is included in the particular beneficiary's income to which the designation pertains and cannot be included in the trust's income. Under no circumstances can the dividend income be reported by one taxpayer and the gross-up by the other.

We trust this satisfactorily clarifies our earlier response.

Yours truly,

for DirectorFinancial Industries DivisionRulings Directorate