Income Tax Act

Marginal note:Trusts

• 75 (2) Where, by a trust created in any manner whatever since 1934, property is held on condition

  • (a) that it or property substituted therefor may

    • (i) revert to the person from whom the property or property for which it was substituted was directly or indirectly received (in this subsection referred to as “the person”), or

    • (ii) pass to persons to be determined by the person at a time subsequent to the creation of the trust, or

  • (b) that, during the existence of the person, the property shall not be disposed of except with the person’s consent or in accordance with the person’s direction,

  any income or loss from the property or from property substituted for the property, and any taxable capital gain or allowable capital loss from the disposition of the property or of property substituted for the property, shall, during the existence of the person while the person is resident in Canada, be deemed to be income or a loss, as the case may be, or a taxable capital gain or allowable capital loss, as the case may be, of the person.

• Marginal note:Exceptions

  (3) Subsection 75(2) does not apply to property held in a taxation year

  • (a) by a trust governed by a deferred profit sharing plan, an employee benefit plan, an employees profit sharing plan, a pooled registered pension plan, a registered disability savings plan, a registered education savings plan, a registered pension plan, a registered retirement income fund, a registered retirement savings plan, a registered supplementary unemployment benefit plan, a retirement compensation arrangement or a TFSA;

  • (b) by an employee life and health trust, an employee trust, a private foundation that is a registered charity, a related segregated fund trust (within the meaning assigned by paragraph 138.1(1)(a)), a trust described by paragraph (a.1) of the definition trust in subsection 108(1), or a trust described by paragraph 149(1)(y);

  • (c) by a trust that

    • (i) is not resident in Canada,

    • (ii) is resident in a country under the laws of which an income tax is imposed,

    • (iii) is exempt under the laws referred to in subparagraph 75(3)(c)(ii) from the payment of income tax to the government of the country of which the trust is a resident, and

    • (iv) was established principally in connection with, or the principal purpose of which is to administer or provide benefits under, one or more superannuation, pension or retirement funds or plans or any funds or plans established to provide employee benefits;

  • (c.1) by a qualifying environmental trust;

  • (c.2) by a trust if the person from whom the trust acquired the property is, in respect of the trust, an electing contributor as defined in subsection 94(1);

  • (c.3) by a trust that is non-resident, but would be resident in Canada for the purpose of computing its income for the year if the definition resident contributor in subsection 94(1) were read without reference to its paragraph (a); or

  • (d) by a prescribed trust.