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:
If all interests in a trust vest indefeasibly on the same day as the day referred to in subparagraph 104(4)(b)(ii), will the 21 year deemed disposition rule apply.
Position TAKEN:
The 21 year rule does not apply.
Reasons FOR POSITION TAKEN:
Paragraph (g) of the definition of trust in subsection 108(1) excludes certain trusts from the 21 year deemed disposition rule. The test in paragraph (g) applies on an on-going basis. Same position taken in 9427445.
DATE March 17, 1998
TO Toronto Centre TSO FROM Trusts Section
A Verification and Enforcement Division DE G.W. Keable
Section 444-12 (613) 957-2046
Attention: Naomi Tsuji
FILE 973178
DOSSIER
SUBJECT: Simultaneous Vesting and 21 Year Deemed Disposition
OBJET:
This is in response to your FAX of December 2, 1997 requesting our views on the application of subsection 104(4) of the Act to the particular fact situation outlined in the November 5, 1997 letter received from XXXXXXXXXX.
Although we have not seen the specific terms of the will referred to in XXXXXXXXXX correspondence, based on the information provided, it would appear that all interests in the particular trust will vest indefeasibly on the same day as the 21 year deemed disposition rule would apply.
Previously, we have opined that paragraph (g) of the definition of "trust" in subsection 108(1) is intended to apply on an ongoing basis and that, if all interests in a particular trust vest indefeasibly on the same day that the 21 year deemed disposition rule would otherwise apply and the trust is not one of the bracketed exceptions within the definition, the requirements of paragraph (g) of the definition of "trust" would be satisfied and the 21 year deemed disposition rule would not apply. This remains our view.
Should you have any questions concerning these comments please contact George Keable.
T. Murphy
A/Section Chief
Trusts Section
Resources, Partnerships and
Trusts Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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