Source: http://www.cra-arc.gc.ca/tx/trsts/chrts-eng.html
Timestamp: 2013-05-20 04:42:53
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Specified investment flow-through (SIFT) trust income and distribution tax calculations
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Specified investment flow-through (SIFT) trust income and distribution tax calculations SIFT trusts must provide the applicable information contained in the following charts below. Print this page and attach a completed copy to your T3 return. The trust must also answer the following 3 questions:
Does the trust qualify as a Mutual Fund trust?
Has the trust issued any new equity to replace debt that was existing on October 31, 2006? If so, provide details.
Has the trust issued new equity in satisfaction of the exercise by another person or partnership of a right in place on October 31, 2006 to exchange an interest in a partnership, or a share of a corporation, into that new equity? If so, provide details.
Chart 1 - Taxable SIFT trust distributions
÷ *___%
Taxable SIFT trust distributions (line A or B, whichever is less)
* Enter the rate determined by the following formula:
1 – (net corporate income tax rate + provincial/territorial SIFT tax component) The amount on line 48 of the T3 return must be equal to or greater than the non-deductible distributions amount.
Note 1 Ensure the non-deductible distributions amount that is deemed to be dividends received by the beneficiaries from a taxable Canadian corporation has been included in the allocation of dividends on T3 Schedule 9, but has not been deducted at line 47 of the T3 return.
If the trust has income in multiple jurisdictions, provide a breakdown of the non-deductible distributions amount attributed to each jurisdiction.
Chart 2 - SIFT trust tax calculation
Taxable SIFT trust distributions (line C, Chart 1)
×*___%
Tax on taxable SIFT trust income (line A plus line B)
If the rate used in the calculation of line B was negative, deduct line B from line A. * Enter the amount determined by the following formula: Net corporate income tax rate + provincial/territorial SIFT tax component - 29%
Enter the amount from line C on line 9 of T3 Schedule 11, Federal Income Tax.
Provincial or territorial distribution tax
× *___%
*Enter the appropriate provincial/territorial SIFT tax component The amount from line D is included in line C; this amount is calculated for statistical purposes only. Do not enter it on the T3 return or schedules.
Chart 3 - Provincial or territorial taxable income
Provincial or territorial taxable income
Enter the amount from line C on line 1 of the trust's T3 provincial or territorial tax form.
Chart 4 - Adjusted net income
Net Income (from line 50 of the T3 return) A
Adjusted net income = C
Use the amount from line C in the place of net income when applicable for calculating the following amounts:
foreign tax credits on Form T2036, Provincial or Territorial Foreign Tax Credit;
capital gains refunds on Form T184, 2009 Capital Gains Refund for a Mutual Fund Trust; and
net income allocations to multiple jurisdictions on Form T3MJ, T3 Provincial and Territorial Taxes for 2009 - Multiple Jurisdictions. When calculating the refundable Quebec abatement on Form T3MJ, use the trust's net income. Chart 5 - Calculating the gross-up amount of dividends retained or not designated by a SIFT trust
Enter the amount from Line 949, Part A, of T3 Schedule 9.
− Enter the amount of
dividends designated as
eligible SIFT deemed
= Enter the total on line 19
of T3 Schedule 8.	Enter the amount from Line 923, Part A, of T3 Schedule 9.
− Enter the amount of dividends designated as other than eligible SIFT deemed dividends.
= Enter the total on line 26 of T3 Schedule 8.
Use the above formula to calculate the amount of Line 32, Part B of T3 Schedule 8.
Chart 6 - Refundable Quebec abatement
Net provincial income (line 50 of the T3 return minus line B of Chart 3) 1
Total net income (line 50 of the T3 return) ÷ 2
Enter the amount from line 31 of T3 Schedule 11 or, if the trust is subject to minimum tax, the amount from line 52 of T3 Schedule 12.
Enter the amount from line 3. × 5
Multiply line 4 by line 5. = 6
Rate for refundable Quebec abatement ×16.5% 7
Enter the amount from line 8 on line 87 of the T3 return.
If the trust has income in multiple jurisdictions, calculate the trust's refundable Quebec abatement on Form T3MJ, T3 Provincial and Territorial Taxes for 2009 - Multiple Jurisdictions.
Chart 7 - Net corporate income tax rate (non calendar year trusts)
If the trusts' fiscal period is not based on a calendar year, calculate the net corporate income tax rate as follows:
# of days in period 1 # of days in tax year
= × ___%
# of days in period 2 # of days in tax year
Net corporate income tax rate (line 1 plus line 2) = 3
Chart 8 - Provincial/Territorial net corporate income tax rate
If based on the trust's tax year, more than one rate applies, complete this chart to determine the provincial/territorial net corporate income tax rate.
Net corporate income tax rate of a province or territory
(line 1 plus line 2) = 3
If the trust has permanent establishments in multiple jurisdictions, use the following formula to determine the prorated general corporate income tax rate for each province/territory. Repeat the calculation for any additional provinces/territories, then enter the total of all amounts on line 5.
Taxable SIFT trust distributions attributed to a province/territory Taxable SIFT trust distributions
Total (from all provinces/territories)
If the trust has any taxable SIFT distributions that could not be attributed to a province or territory, continue below.
1 minus Taxable SIFT trust distributions attributed to provinces/territories Taxable SIFT trust distributions
= × 0.1
Prorated general corporate income tax rate (line 5 plus line 6) = 7