Income Tax Act

Marginal note:Tax on income of trust

• 210.2 (1) Subject to section 210.3, where an amount in respect of the income of a trust for a taxation year is or would, if all beneficiaries under the trust were persons resident in Canada to whom Part I was applicable, be included in computing the income under Part I of a person by reason of subsection 104(13) or 105(2), the trust shall pay a tax under this Part in respect of the year equal to 36% of the least of

  • (a) the designated income of the trust for the year,

  • (b) the amount that, but for subsections 104(6) and 104(30), would be the income of the trust for the year, and

  • (c) 100/64 of the amount deducted under paragraph 104(6)(b) in computing the trust’s income under Part I for the year.

• Marginal note:Amateur athlete trusts

  (1.1) Notwithstanding section 210.1, where an amount described in subsection 143.1(2) in respect of an amateur athlete trust would, if Part I were applicable, be required to be included in computing the income for a taxation year of a designated beneficiary under the trust, the trust shall pay a tax under this Part in respect of the year equal to 36% of 100/64 of that amount.

• Marginal note:Designated income

  (2) For the purposes of subsection 210.2(1), the designated income of a trust for a taxation year means the amount that, but for subsections 104(6), 104(12) and 104(30), would be the income of the trust for the year determined under section 3 if

  • (a) it had no income other than taxable capital gains from dispositions described in paragraph 210.2(2)(b) and incomes from

    • (i) real properties in Canada (other than Canadian resource properties),

    • (ii) timber resource properties,

    • (iii) Canadian resource properties (other than properties acquired by the trust before 1972), and

    • (iv) businesses carried on in Canada;

  • (b) the only taxable capital gains and allowable capital losses referred to in paragraph 3(b) were from dispositions of taxable Canadian property; and

  • (c) the only losses referred to in paragraph 3(d) were losses from sources described in subparagraphs 210.2(2)(a)(i) to 210.2(2)(a)(iv).

• Marginal note:Tax deemed paid by beneficiary

  (3) Where an amount (in this subsection and subsection 210.3(2) referred to as the “income amount”) in respect of the income of a trust for a taxation year is, by reason of subsection 104(13) or 105(2), included in computing

  • (a) the income under Part I of a person who was not at any time in the year a designated beneficiary under the trust, or

  • (b) the income of a non-resident person (other than a person who, at any time in the year, would be a designated beneficiary under the trust if section 210 were read without reference to paragraph 210(a)) that is subject to tax under Part I by reason of subsection 2(3) and is not exempt from tax under Part I by reason of a provision contained in a tax convention or agreement with another country that has the force of law in Canada,

  an amount determined by the formula

  A × B/C

  where

  A

  is the tax paid under this Part by the trust for the year,

  B

  is the income amount in respect of the person, and

  C

  is the total of all amounts each of which is an amount that is or would be, if all beneficiaries under the trust were persons resident in Canada to whom Part I was applicable, included in computing the income under Part I of a beneficiary under the trust by reason of subsection 104(13) or 105(2) in respect of the year,

  shall, if designated by the trust in respect of the person in its return for the year under this Part, be deemed to be an amount paid on account of the person’s tax payable under Part I for the person’s taxation year in which the taxation year of the trust ends, on the day that is 90 days after the end of the taxation year of the trust.

• Marginal note:Designations in respect of partnerships

  (4) Where a taxpayer is a member of a partnership in respect of which an amount is designated by a trust for a taxation year of the trust (in this subsection referred to as the “particular year”) under subsection 210.2(3),

  • (a) no amount shall be deemed to be paid on account of the partnership’s tax payable under Part I by reason of subsection 210.2(3) except in the application of that subsection for the purposes of subsection 104(31), and

  • (b) an amount determined by the formula

    A × B/C

    where

    A

    is the amount so designated,

    B

    is the amount that may reasonably be regarded as the share of the taxpayer in the designated income of the trust received by the partnership in the fiscal period of the partnership in which the particular year ends (that fiscal period being referred to in this subsection as the “partnership’s period”), and

    C

    is the designated income received by the partnership from the trust in the partnership’s period,

  shall be deemed to be an amount paid on account of the taxpayer’s tax payable under Part I for the person’s taxation year in which the partnership’s period ends, on the last day of that year.

• Marginal note:Returns

  (5) A trust shall, within 90 days after the end of each taxation year,

  • (a) file with the Minister a return for the year under this Part in prescribed form and containing prescribed information, without notice or demand therefor;

  • (b) estimate in the return the amount of tax, if any, payable by it under this Part for the year; and

  • (c) pay to the Receiver General the tax, if any, payable by it under this Part for the year.

• Marginal note:Liability of trustee

  (6) A trustee of a trust is personally liable to pay to the Receiver General on behalf of the trust the full amount of any tax payable by the trust under this Part to the extent that the amount is not paid to the Receiver General within the time specified in subsection 210.2(5), and the trustee is entitled to recover from the trust any such amount paid by the trustee.

• Marginal note:Provisions applicable to Part

  (7) Subsections 150(2) and 150(3), sections 152 and 158, subsections 161(1) and 161(11), sections 162 to 167 and Division J of Part I are applicable to this Part with such modifications as the circumstances require.