Words and Phrases - "by a trust"

In 2003-004063 CRA concluded that s. 75(2) applied to a donor who, under a charitable annuity arrangement, transferred an amount to a trust in consideration for which the donor acquired a right to receive an annuity from the trust, with the excess of the amount so received by the trust over the normal cost of the annuity granted constituting a gift received by the trust. The Directorate stated:

[T]he words "by a trust" are used to refer not only to the trust deed, but also to any transaction performed by the trustees that does not violate the trust deed in question. This interpretation is consistent with [9422630] … .

Since … the trust indenture indicates that the trustees shall act in a manner that promotes or supports the purposes for which the trust was created, the granting of annuity contracts by the trust is part of a strategy to increase its gift income and enable it to achieve its purposes, even though the trust indenture contains no specific reference to the provision of such annuity contracts. … [T]herefore … subsection 75(2) applies … .