Income Tax Act — I-3.3 94
tributor to the trust or a resident beneficiary under the trust, (a) the trust is deemed to be resident in Canada throughout the particular taxation year for the purposes of (i) section 2, (ii) computing the trust’s income for the particular taxation year, (iii) applying subsections 104(13.1) to (28) and 107(2.1), in respect of the trust and a beneficiary under the trust, (iv) applying clause 53(2)(h)(i.1)(B), the definition non-resident entity in subsection 94.1(2), subsection 107(2.002) and section 115, in respect of a beneficiary under the trust, (v) paragraph (c) and subsection 111(9), (vi) determining an obligation of the trust to file a return under section 233.3 or 233.4, (vii) determining the rights and obligations of the trust under Divisions I and J, (viii) determining the liability of the trust for tax under Part I, and under Part XIII on amounts paid or credited (in this paragraph having the meaning assigned by Part XIII) to the trust, (ix) applying Part XIII in respect of an amount (other than an exempt amount) paid or credited by the trust to any person, and (x) determining whether a foreign affiliate of a taxpayer (other than the trust) is a controlled foreign affiliate of the taxpayer; (b) no deduction shall be made under subsection 20(11) by the trust in computing its income for the particular taxation year, and for the purposes of applying subsection 20(12) and section 126 to the trust for the particular taxation year (i) in determining the non-business-income tax (in this paragraph as defined by subsection 126(7)) paid by the trust for the particular taxation year, paragraph (b) of the definition non-business-income tax does not apply, and (ii) if, at that specified time, the trust is resident in a country other than Canada, (A) the trust’s income for the particular taxation year (other than income — not including dividends or interest — from sources in Canada) is deemed to be from sources in that country and not to be from any other source, and (B) the business-income tax (in this paragraph as defined by subsection 126(7)), and the non-business-income tax, paid by the trust for the particular taxation year are deemed to have been paid by the trust to the government of that country and not to any other government; (c) if the trust was non-resident throughout its taxation year (referred to in this paragraph as the “preceding year”) immediately preceding the particular taxation year, the trust is deemed to have (i) immediately before the end of the preceding year, disposed of each property (other than property described in any of subparagraphs 128.1(1)(b)(i) to (iv)) held by the trust at that time for proceeds of disposition equal to its fair market value at that time, and (ii) at the beginning of the particular taxation year, acquired each of those properties so disposed of at a cost equal to its proceeds of disposition; (d) each person that at any time in the particular taxation year is a resident contributor to the trust (other than an electing contributor in respect of the trust at the specified time) or a resident beneficiary under the trust (i) has jointly and severally, or solidarily, with the trust and with each other such person, the rights and obligations of the trust in respect of the particular taxation year under Divisions I and J, and (ii) is subject to Part XV in respect of those rights and obligations; (e) each person that at any time in the particular taxation year is a beneficiary under the trust and was a person from whom an amount would be recoverable at the end of the trust’s 2006 taxation year under subsection (2) (as it read in its application to taxation years that end before 2007) in respect of the trust if the person had received before the trust’s 2007 taxation year amounts described under paragraph (2)(a) or (b) in respect of the trust (as those paragraphs read in their application to taxation years that end before 2007) (i) has, to the extent of the person’s recovery limit for the