Subsection 210.2(1) - Tax on income of trust
IT-342R "Trusts-Income Payable to Beneficiaries"
|Locations of other summaries||Wordcount|
|Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(13.1)||0|
|Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(13.2)||0|
Goodman, "Canadian Trusts with Non-Resident Beneficiaries and Non-Resident Trusts with Canadian Resident Beneficiaries", 1988 Conference Report, c. 39
Discussion of the background to the repeal of s. 104(8) and its replacement by Part XII.2
Subsection 210.2(3) - Tax deemed paid by beneficiary
Part XII.2 tax is refundable to an RRSP under s. 210.2(3) even though no Part I tax is payable by the plan.
An allocation of Part XII.2 tax to a non-designated beneficiary is based on the proportion of the beneficiary's share of all types of income of the trust rather than on that beneficiary's share of designated income. Accordingly, in the situation where a trust has a resident income beneficiary and a non-resident capital beneficiary and the total trust income for a year is $200 (comprising income of $100 and a taxable gain of $100), with the income beneficiary being allocated $100 of non-designated income and the capital beneficiary being allocated $100 of designated income (the taxable capital gain), the effect of the formula in s. 210.2(3) would be to allocate 50% of the Part XII.2 tax to the income beneficiary as an amount paid on account of Part I tax, notwithstanding that the income beneficiary was not allocated any designated income.