Income Tax Act

Version of section 88.1 from 2009-03-12 to 2017-11-20:

Marginal note:Application
  •  (1) Subsection (2) applies to a trust’s distribution of property to a taxpayer if

    • (a) the distribution is a SIFT trust wind-up event;

    • (b) the trust is

      • (i) a SIFT wind-up entity whose only beneficiary, at all times at which the trust makes a distribution that is a SIFT trust wind-up event, is a taxable Canadian corporation, or

      • (ii) a trust whose only beneficiary, at all times at which the trust makes a distribution that is a SIFT trust wind-up event, is another trust described by subparagraph (i);

    • (c) where the trust is a SIFT wind-up entity, the distribution occurs no more than 60 days after the earlier of

      • (i) the first SIFT trust wind-up event of the trust, and

      • (ii) the first distribution to the trust that is a SIFT trust wind-up event of another trust; and

    • (d) if the property is shares of the capital stock of a taxable Canadian corporation,

      • (i) the property was not acquired by the trust on a distribution to which subsection 107(3.1) applies, and

      • (ii) the trust elects in writing, filed with the Minister on or before the trust’s filing-due date for its taxation year that includes the time of the distribution, that this section apply to the distribution.

  • Marginal note:SIFT trust wind-up event

    (2) If this subsection applies to a trust’s distribution of property to a taxpayer, subsections 88(1) to (1.7), and section 87 and paragraphs 256(7)(a) to (e) as they apply for the purposes of those subsections, apply, with any modifications that the circumstances require, as if

    • (a) the trust were a taxable Canadian corporation (in this subsection referred to as the “subsidiary”) that is not a private corporation;

    • (b) where the taxpayer is a SIFT wind-up entity, the taxpayer were a taxable Canadian corporation that is not a private corporation;

    • (c) the distribution were a winding-up of the subsidiary;

    • (d) the taxpayer’s interest as a beneficiary under the trust were shares of a single class of shares of the capital stock of the subsidiary owned by the taxpayer;

    • (e) paragraph 88(1)(b) deemed the taxpayer’s proceeds of disposition of the shares described in paragraph (d) and owned by the taxpayer immediately before the distribution to be equal to the adjusted cost base to the taxpayer of the taxpayer’s interest as a beneficiary under the trust immediately before the distribution;

    • (f) each trust, a majority-interest beneficiary (in this subsection, within the meaning assigned by section 251.1) of which is another trust that is by operation of this subsection treated as if it were a corporation, were a corporation; and

    • (g) except for the purposes of subsections 88(1.1) and (1.2), the taxpayer last acquired control of the subsidiary and of each corporation (including a trust that is by operation of this subsection treated as if it were a corporation) controlled by the subsidiary at the time, if any, at which the taxpayer last became a majority-interest beneficiary of the trust.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. R.S., 1985, c. 1 (5th Supp.), s. 88.1;
  • 1994, c. 21, s. 41;
  • 2009, c. 2, s. 21.
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