Income Tax Act (R.S.C., 1985, c. 1 (5th Supp.))

Act current to 2016-05-12 and last amended on 2015-12-31. Previous Versions

Marginal note:Amounts designated by mutual fund trust
  •  (1) Where a trust in its return of income under this Part for a taxation year throughout which it was a mutual fund trust designates an amount in respect of a particular unit of the trust owned by a taxpayer at any time in the year equal to the total of

    • (a) such amount as the trust may determine in respect of the particular unit for the year not exceeding the amount, if any, by which

      • (i) the total of all amounts that were determined by the trust under subsection 104(16) of the Income Tax Act, chapter 148 of the Revised Statutes of Canada, 1952, for taxation years of the trust commencing before 1988

      exceeds

      • (ii) the total of all amounts determined by the trust under this paragraph for the year or a preceding taxation year in respect of all units of the trust, other than amounts determined in respect of the particular unit for the year under this paragraph, and

    • (b) such amount as the trust may determine in respect of the particular unit for the year not exceeding the amount, if any, by which

      • (i) the total of all amounts described in subparagraph 53(2)(h)(i.1) that became payable by the trust after 1987 and before the year

      exceeds

      • (ii) the total of all amounts determined by the trust under this paragraph for the year or a preceding taxation year in respect of all units of the trust, other than amounts determined in respect of the particular unit for the year under this paragraph,

    the amount so designated shall

    • (c) subject to subsection 132.1(3), be deductible in computing the income of the trust for the year, and

    • (d) be included in computing the income of the taxpayer for the taxpayer’s taxation year in which the year of the trust ends, except that where the particular unit was owned by two or more taxpayers during the year, such part of the amount so designated as the trust may determine shall be included in computing the income of each such taxpayer for the taxpayer’s taxation year in which the year of the trust ends if the total of the parts so determined is equal to the amount so designated.

  • Marginal note:Adjusted cost base of unit where designation made

    (2) In computing, at any time in a taxation year of a taxpayer, the adjusted cost base to the taxpayer of a unit in a mutual fund trust, there shall be added that part of the amount included under subsection 132.1(1) in computing the taxpayer’s income that is reasonably attributable to the amount determined under paragraph 132.1(1)(b) by the trust for its taxation year ending in the year in respect of the unit owned by the taxpayer.

  • Marginal note:Limitation on current year deduction

    (3) The total of amounts deductible by reason of paragraph 132.1(1)(c) in computing the income of a trust for a taxation year shall not exceed the amount that would be the income of the trust for the year if no deductions were made under this section and subsection 104(6).

  • Marginal note:Carryover of excess

    (4) The amount, if any, by which the total of all amounts each of which is an amount designated for the year under subsection 132.1(1) exceeds the amount deductible under this section in computing the income of the trust for the year, shall, for the purposes of paragraph 132.1(1)(c) and subsection 132.1(3), be deemed designated under subsection 132.1(1) by the trust for its immediately following taxation year.

  • Marginal note:Where designation has no effect

    (5) Where it is reasonable to conclude that an amount determined by a mutual fund trust

    • (a) under paragraph 132.1(1)(a) or 132.1(1)(b) for a taxation year of the trust in respect of a unit owned at any time in the year by a taxpayer who was a person exempt from tax under this Part by reason of subsection 149(1), or

    • (b) under paragraph 132.1(1)(d) for the year in respect of the amount designated under subsection 132.1(1) for the year in respect of the unit

    differs from the amount that would have been so determined for the year in respect of the taxpayer had the taxpayer not been a person exempt from tax under this Part by reason of subsection 149(1), the amount designated for the year in respect of the unit under subsection 132.1(1) shall have no effect for the purposes of paragraph 132.1(1)(c).

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1988, c. 55, s. 121.
Marginal note:Taxation year of mutual fund trust
  •  (1) Notwithstanding any other provision of this Act, where a trust (other than a prescribed trust) that was a mutual fund trust on the 74th day after the end of a particular calendar year so elects in writing filed with the Minister with the trust’s return of income for the trust’s taxation year that includes December 15 of the particular year,

    • (a) the trust’s taxation year that began before December 16 of the particular year and, but for this paragraph, would end at the end of the particular year (or, where the first taxation year of the trust began after December 15 of the preceding calendar year and no return of income was filed for a taxation year of the trust that ended at the end of the preceding calendar year, at the end of the preceding calendar year) is deemed to end at the end of December 15 of the particular year;

    • (b) if the trust’s taxation year ends on December 15 because of paragraph (a), subject to subsection (1.1), each subsequent taxation year of the trust is deemed to be the period that begins at the beginning of December 16 of a calendar year and ends at the end of December 15 of the following calendar year or at any earlier time that is determined under paragraph 132.2(3)(b) or subsection 142.6(1); and

    • (c) each fiscal period of the trust that begins in a taxation year of the trust that ends on December 15 because of paragraph (a) or that ends in a subsequent taxation year of the trust shall end no later than the end of the year or the subsequent year, as the case may be.

  • Marginal note:Revocation of election

    (1.1) Where a particular taxation year of a trust ends on December 15 of a calendar year because of an election made under paragraph (1)(a), the trust applies to the Minister in writing before December 15 of that calendar year (or before a later time that is acceptable to the Minister) to have this subsection apply to the trust, with the concurrence of the Minister

    • (a) the trust’s taxation year following the particular taxation year is deemed to begin immediately after the end of the particular taxation year and end at the end of that calendar year; and

    • (b) each subsequent taxation year of the trust is deemed to be determined as if that election had not been made.

  • Marginal note:Electing trust’s share of partnership income and losses

    (2) Where a trust is a member of a partnership a fiscal period of which ends in a calendar year after December 15 of the year and a particular taxation year of the trust ends on December 15 of the year because of subsection (1), each amount otherwise determined under paragraph 96(1)(f) or (g) to be the trust’s income or loss for a subsequent taxation year of the trust is deemed to be the trust’s income or loss determined under paragraph 96(1)(f) or (g) for the particular year and not for the subsequent year.

  • Marginal note:Electing trust’s income from other trusts

    (3) Where a particular trust is a beneficiary under another trust a taxation year of which (in this subsection referred to as the “other year”) ends in a calendar year after December 15 of the year and a particular taxation year of the trust ends on December 15 of the year because of subsection (1), each amount determined or designated under subsection 104(13), (19), (21), (22) or (29) for the other year that would otherwise be included, or taken into account, in computing the income of the particular trust for a subsequent taxation year of the trust shall

    • (a) be included, or taken into account, in computing the particular trust’s income for the particular year; and

    • (b) not be included, or taken into account, in computing the particular trust’s income for the subsequent year.

  • Marginal note:Amounts paid or payable to beneficiaries

    (4) Notwithstanding subsection 104(24), for the purposes of subsections (5) and (6) and 104(6) and (13) and paragraph (i) of the definition disposition in subsection 248(1) each amount that is paid, or that becomes payable, by a trust to a beneficiary after the end of a particular taxation year of the trust that ends on December 15 of a calendar year because of subsection (1) and before the end of that calendar year, is deemed to have been paid or to have become payable, as the case may be, to the beneficiary at the end of the particular year and not at any other time.

  • Marginal note:Special rules where change in status of beneficiary

    (5) Where an amount is deemed by subsection (4) to have been paid or to have become payable at the end of December 15 of a calendar year by a trust to a beneficiary who was not a beneficiary under the trust at that time,

    • (a) notwithstanding any other provision of this Act, where the beneficiary did not exist at that time, except for the purpose of this paragraph, the first taxation year of the beneficiary is deemed to include the period that begins at that time and ends immediately before the beginning of the first taxation year of the beneficiary;

    • (b) the beneficiary is deemed to exist throughout the period described in paragraph (a); and

    • (c) where the beneficiary was not a beneficiary under the trust at that time, the beneficiary is deemed to have been a beneficiary under the trust at that time.

  • Marginal note:Additional income of electing trust

    (6) Where a particular amount is designated under this subsection by a trust in its return of income for a particular taxation year that ends on December 15 because of subsection (1) or throughout which the trust was a mutual fund trust and the trust does not designate an amount under subsection 104(13.1) or (13.2) for the particular year,

    • (a) the particular amount shall be added in computing its income for the particular year; and

    • (b) for the purposes of subsections 104(6) and (13), each portion of the particular amount that is allocated under this paragraph to a beneficiary under the trust in the trust’s return of income for the particular year in respect of an amount paid or payable to the beneficiary in the particular year shall be considered to be additional income of the trust for the particular year (determined without reference to subsection 104(6)) that was paid or payable, as the case may be, to the beneficiary at the end of the particular year.

    • (c) [Repealed, 2001, c. 17, s. 130(4)]

  • Marginal note:Deduction

    (7) Subject to subsection (8), the lesser of the amount designated under subsection (6) by a trust for a taxation year and the total of all amounts each of which is allocated by the trust under paragraph (6)(b) in respect of the year shall be deducted in computing the trust’s income for the following taxation year.

  • Marginal note:Anti-avoidance

    (8) Subsection (7) does not apply in computing the income of a trust for a taxation year where it is reasonable to consider that the designation under subsection (6) for the preceding taxation year was part of a series of transactions or events that includes a change in the composition of beneficiaries under the trust.

  • NOTE: Application provisions are not included in the consolidated text;
  • see relevant amending Acts. 1999, c. 22, s. 55;
  • 2001, c. 17, s. 130;
  • 2013, c. 34, s. 279.
 
Date modified: