Income Tax Act — I-3.3 248
ion, or substitution, as the case may be, arises on the death of a testator, to have been transferred to the trust on and as a consequence of the death of the testator, and not otherwise, and (B) where the usufruct, right of use or habitation, or substitution, as the case may be, arises otherwise, to have been transferred (at the time it first became subject to the usufruct, right of use or habitation, or substitution, as the case may be) to the trust by the person that granted the usufruct, right of use or habitation, or substitution, and (iii) the property is deemed to be, throughout the period in which it is subject to the usufruct, right of use or habitation, or substitution, as the case may be, held by the trust, and not otherwise; (b) an arrangement (other than a partnership, a qualifying arrangement or an arrangement that is a trust determined without reference to this paragraph) is deemed to be a trust and property subject to rights and obligations under the arrangement is, if the arrangement is deemed by this paragraph to be a trust, deemed to be held in trust and not otherwise, where the arrangement (i) is established before October 31, 2003 by or under a written contract that (A) is governed by the laws of the Province of Quebec, and (B) provides that, for the purposes of this Act, the arrangement shall be considered to be a trust, and (ii) creates rights and obligations that are substantially similar to the rights and obligations under a trust (determined without reference to this subsection); (c) if the arrangement is a qualifying arrangement, (i) the arrangement is deemed to be a trust, (ii) any property contributed at any time to the arrangement by an annuitant, a holder or a subscriber of the arrangement, as the case may be, is deemed to have been transferred, at that time, to the trust by the contributor, and (iii) property subject to rights and obligations under the arrangement is deemed to be held in trust and not otherwise; (d) a person who has a right (whether immediate or future and whether absolute or contingent) to receive all or part of the income or capital in respect of property that is referred to in paragraph (a) or (b) is deemed to be beneficially interested in the trust; and (e) notwithstanding that a property is at any time subject to a servitude, the property is deemed to be beneficially owned by a person at that time if, at that time, the person has in relation to the property (i) the right of ownership, (ii) a right as a lessee under an emphyteusis, or (iii) a right as a beneficiary in a trust. Gift of bare ownership of immovables (3.1) Subsection (3) does not apply in respect of a usufruct or a right of use of an immovable in circumstances where a taxpayer disposes of the bare ownership of the immovable by way of a gift to a qualified donee and retains, for life, the usufruct or the right of use. Qualifying arrangement (3.2) For the purposes of paragraphs 248(3)(b) and (c), an arrangement is a qualifying arrangement if it is (a) entered into with a corporation that is licensed or otherwise authorized under the laws of Canada or a province to carry on in Canada the business of offering to the public its services as trustee; (b) established by or under a written contract that is governed by the laws of the Province of Quebec; (c) presented as a declaration of trust or provides that, for the purposes of this Act, it shall be considered to be a trust; and (d) presented as an arrangement in respect of which the corporation is to take action for the arrangement to become a FHSA, a registered disability savings plan, a registered education savings plan, a registered retirement income fund, a registered retirement savings plan or a TFSA. Interest in real property (4) In this Act, an interest in real property includes a leasehold interest in real property but does not include an interest as security only derived by virtue of a mortgage, agreement for sale or similar obligation. Real right in immovabl