How is a SIFT trust's tax calculated?

Every trust that is a SIFT trust for a tax year is liable to a tax under Part 1 of the Income Tax Act calculated as the total of:Footnote ¹

1. 33% of its amount taxable for the tax year, and
2. the positive or negative amount determined by the following formula:

• A × B where
  • A is the positive or negative decimal fraction determined by the following formula:
    • C + D − E where
      • C is the net corporate income tax rate in respect of the SIFT trust for the tax year,
      • D is the provincial SIFT tax rate of the SIFT² trust for the tax year,
      • E is the decimal fraction equivalent of the percentage rate of tax provided in (a) for the tax year, and
  • B is the SIFT trust's taxable SIFT trust distributions for the tax year.

Footnote 1

We have simplified this calculation for you in Chart 2. Enter the amount from line C of Chart 2 on line 9 of Schedule, T3SCH11, Federal Income Tax.

Footnote 2

For additional information on the ''provincial SIFT tax rate", go to Provincial or Territorial SIFT tax component.

Forms and publications

• Guide T4013, T3 Trust Guide
• Form T3RET, T3 Trust Income Tax and Information Return
• Schedule, T3SCH11, Federal Income Tax

Government Partners

• Department of Finance Canada

Date modified:

2016-11-15