Income Tax Act — I-3.3 108
as at all times after it was created a trust referred to in paragraph (a), (b) or (d) or a person who is a beneficiary of the trust only because of being a beneficiary under a trust referred to in any of those paragraphs, or (e.1) a cemetery care trust or a trust governed by an eligible funeral arrangement, and, in applying subsections 104(4), (5), (5.2), (12), (14) and (15) at any time, does not include (f) a trust that, at that time, is a unit trust, (g) a trust all interests in which, at that time, have vested indefeasibly, other than (i) an alter ego trust, a joint spousal or common-law partner trust, a post-1971 spousal or common-law partner trust or a trust to which paragraph 104(4)(a.4) applies, (ii) [Repealed, 2013, c. 34, s. 236] (iii) a trust that has, in its return of income under this Part for its first taxation year that ends after 1992, elected that this paragraph not apply, (iv) a trust that is at that time resident in Canada where the total fair market value at that time of all interests in the trust held at that time by beneficiaries under the trust who at that time are non-resident is more than 20% of the total fair market value at that time of all interests in the trust held at that time by beneficiaries under the trust, (v) a trust under the terms of which, at that time, all or part of a person’s interest in the trust is to be terminated with reference to a period of time (including a period of time determined with reference to the person’s death), otherwise than as a consequence of terms of the trust under which an interest in the trust is to be terminated as a consequence of a distribution to the person (or the person’s estate) of property of the trust if the fair market value of the property to be distributed is required to be commensurate with the fair market value of that interest immediately before the distribution, or (vi) a trust that, before that time and after December 17, 1999, has made a distribution to a beneficiary in respect of the beneficiary’s capital interest in the trust, if the distribution can reasonably be considered to have been financed by a liability of the trust and one of the purposes of incurring the liability was to avoid taxes otherwise payable under this Part as a consequence of the death of any individual, or (h) an employee ownership trust. ( fiducie ) Testamentary trust not disqualified (1.1) For the purpose of the definition testamentary trust in subsection (1), a contribution to a particular trust does not include (a) a qualifying expenditure (within the meaning of section 118.04, 118.041 or 122.92) of a beneficiary under the trust; or (b) an amount paid to, or on behalf of, the trust by another trust if (i) the trust is an individual’s graduated rate estate (determined without regard to the payment and this subsection), (ii) paragraph 104(13.4)(b) applies to the other trust, for a taxation year that ends at a time determined by reference to the individual’s death, because of a joint election made under subparagraph 104(13.4)(b.1)(iii) by the other trust and the legal representative administering the estate, (iii) the payment is on account of the tax payable by the individual, for the individual’s taxation year that includes the day on which the individual dies, under (A) this Part, or (B) the law of the province, in which the individual was resident immediately before the individual’s death, that imposes a tax on the taxable income of individuals resident in that province, and (iv) the amount of the payment does not exceed the amount by which that tax payable is greater than it would have been if paragraph 104(13.4)(b) did not apply to the other trust in respect of the taxation year referred to in subparagraph (ii). When trust is a unit trust (2) For the purposes of this Act, a trust is a unit trust at any particular time if, at that time, it was an inter vivos trust the interest of each beneficiary under which was described by reference to units of the trust, and (a) th