Income Tax Act — I-3.3 104
210) that became payable in the year to a non-resident beneficiary under the trust in respect of an interest of the non-resident as a beneficiary under the trust, and (ii) all amounts each of which is determined by the formula A × B where A is an amount (other than an amount described in subparagraph (i)) that (A) is paid or credited (having the meaning assigned by Part XIII) in the year to the trust, (B) would, if this Act were read without reference to subparagraph 94(3)(a)(viii), paragraph 212(2)(b) and sections 216 and 217, be an amount as a consequence of the payment or crediting of which the trust would have been liable to tax under Part XIII, and (C) becomes payable in the year by the trust to a non-resident beneficiary under the trust in respect of an interest of the non-resident as a beneficiary under the trust, and B is (A) 0.35, if the trust can establish to the satisfaction of the Minister that the non-resident beneficiary to whom the amount described in the description of A is payable is resident in a country with which Canada has a tax treaty under which the income tax that Canada may impose on the beneficiary in respect of the amount is limited, and (B) 0.6, in any other case. Limitation — amount claimed as gift (7.02) No deduction may be made under subsection (6) in computing the income for a taxation year of an estate that arose on and as a consequence of an individual’s death in respect of a payment to the extent that the payment is a gift in respect of which an amount is deducted under section 118.1 for any taxation year in computing the individual’s tax payable under this Part. Capital interest greater than income interest (7.1) Where it is reasonable to consider that one of the main purposes for the existence of any term, condition, right or other attribute of an interest in a trust (other than a personal trust) is to give a beneficiary a percentage interest in the property of the trust that is greater than the beneficiary’s percentage interest in the income of the trust, no amount may be deducted under paragraph 104(6)(b) in computing the income of the trust. Avoidance of s. (7.1) (7.2) Notwithstanding any other provision of this Act, where (a) a taxpayer has acquired a right to or to acquire an interest in a trust, or a right to or to acquire a property of a trust, and (b) it is reasonable to consider that one of the main purposes of the acquisition was to avoid the application of subsection 104(7.1) in respect of the trust, on a disposition of the right (other than pursuant to the exercise thereof), the interest or the property, there shall be included in computing the income of the taxpayer for the taxation year in which the disposition occurs the amount, if any, by which (c) the proceeds of disposition of the right, interest or property, as the case may be, exceed (d) the cost amount to the taxpayer of the right, interest or property, as the case may be. (10) and (11) [Repealed, 2013, c. 34, s. 231] Deduction of amounts included in preferred beneficiaries’ incomes (12) There may be deducted in computing the income of a trust for a taxation year the lesser of (a) the total of all amounts designated under subsection 104(14) by the trust in respect of the year, and (b) the accumulating income of the trust for the year. Income of beneficiary (13) There shall be included in computing the income for a particular taxation year of a beneficiary under a trust such of the following amounts as are applicable: (a) in the case of a trust (other than a trust referred to in paragraph (a) of the definition trust in subsection 108(1)), such part of the amount that, but for subsections (6) and (12), would be the trust’s income for the trust’s taxation year that ended in the particular year as became payable in the trust’s year to the beneficiary; and (b) in the case of a trust governed by an employee benefit plan to which the beneficiary has contributed as an employer, such part of the amount that, but for subsections