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Income Tax Regulations

Version of section 2800 from 2004-08-31 to 2007-05-30:

  •  (1) Any election under subsection 104(14) of the Act in respect of a taxation year shall be made by filing with the Minister the following documents:

    • (a) a statement

      • (i) making the election in respect of the year,

      • (ii) designating the part of the accumulating income in respect of which the election is being made, and

      • (iii) signed by the preferred beneficiary and a trustee having the authority to make the election; and

    • (b) a statement signed by the trustee showing the computation of the amount of the preferred beneficiary’s share in the accumulating income of the trust for the year in accordance with paragraph 104(15)(a), (b) or (c) of the Act, as the case may be, together with such information concerning the provisions of the trust and its administration as is necessary for this purpose.

  • (2) The documents referred to in subsection (1) shall be filed within 90 days from the end of the trust’s taxation year in respect of which the election referred to in subsection (1) is made.

  • (2.1) Notwithstanding subsection (2), if a trust elects under subsection 110.6(19) of the Act in respect of the taxation year of the trust that includes February 22, 1994, the documents referred to in subsection (1) in respect of that year shall be filed on or before the day on or before which the election under subsection 110.6(19) of the Act is required to be filed with the Minister.

  • (3) For the purposes of paragraph 104(15)(c) of the Act, the discretionary share of a particular preferred beneficiary under a trust of the trust’s accumulating income for a taxation year shall be an amount determined as follows:

    • (a) where the settlor of the trust is an individual and his spouse, both of whom are alive at the end of the year and both of whom may be entitled to share in the accumulating income of the trust, the discretionary share

      • (i) of the individual is that proportion of the accumulating income of the trust for the year that the fair market value of the property contributed by the individual is of the aggregate of the fair market value of the property contributed by the individual and the fair market value of the property contributed by his spouse (such fair market values being determined in respect of each contribution at the time of the making of that contribution),

      • (ii) of the spouse is that proportion of the accumulating income of the trust for the year that the fair market value of the property contributed by the spouse is of the aggregate of the fair market value of the property contributed by the individual and the fair market value of the property contributed by his spouse (such fair market values being determined in respect of each contribution at the time of the making of that contribution), and

      • (iii) of any other beneficiary who is a preferred beneficiary under the trust is nil;

    • (b) where the settlor of the trust is an individual and his spouse, both of whom are alive at the end of the year but only one of whom may be entitled to share in the accumulating income of the trust, the discretionary share

      • (i) of the individual or his spouse, as the case may be, who may be entitled to share in the accumulating income of the trust is the accumulating income of the trust for the year, and

      • (ii) of any other beneficiary who is a preferred beneficiary under the trust is nil;

    • (c) where the settlor of the trust is an individual and his spouse, only one of whom is alive at the end of the year, and the one who is alive may be entitled to share in the accumulating income of the trust, the discretionary share

      • (i) of the individual or his spouse, as the case may be, who is alive at the end of the year is the accumulating income of the trust for the year, and

      • (ii) of any other beneficiary who is a preferred beneficiary under the trust is nil;

    • (d) where, in any case not described in paragraph (a), (b) or (c), the settlor of the trust may be entitled to share in the accumulating income of the trust and is alive at the end of the year, the discretionary share

      • (i) of the settlor is the accumulating income of the trust for the year, and

      • (ii) of any other beneficiary who is a preferred beneficiary under the trust is nil;

    • (e) where, in any case not described in paragraph (a), (b) or (c), the spouse of the settlor of the trust may be entitled to share in the accumulating income of the trust, but the settlor may not, and the spouse is alive at the end of the year, the discretionary share

      • (i) of the spouse is the accumulating income of the trust for the year, and

      • (ii) of any other beneficiary who is a preferred beneficiary under the trust is nil; and

    • (f) in any other case, the discretionary share of a preferred beneficiary alive at the end of the year is the amount obtained by dividing the accumulating income of the trust for the year by the number of preferred beneficiaries under the trust alive at the end of the year who may be entitled to share in the accumulating income of the trust.

  • (4) In paragraphs (3)(a) to (e), the phrase “entitled to share in the accumulating income of the trust” does not include any entitlement that arises by reason of the death of any individual who would otherwise be entitled to share in the accumulating income of the trust.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • SOR/2001-164, s. 1
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