I-3 - Taxation Act

Section 597.0.4 Disposition versions

2015-12-04

597.0.4. The maximum amount recoverable under paragraph g of section 595 at a particular time from a person in respect of a trust (other than a person that is deemed, under section 597.0.10 or 597.0.11, to be a contributor or a resident contributor to the trust) and a particular taxation year of the trust is equal to the person’s recovery limit at the particular time in respect of the trust and the particular year if

(a)  either

i.  the person is liable under paragraph g of section 595 in respect of the trust and the particular taxation year solely because the person was a resident beneficiary under the trust that is a tax-liable taxpayer in respect of the trust at a specified time in respect of the trust in the particular taxation year, or

ii.  at a specified time in respect of the trust in the particular taxation year, the aggregate of all amounts each of which is the amount, at the time it was made, of a contribution to the trust made before the specified time by the person or by another person or partnership not dealing at arm’s length with the person, is not more than the greater of

(1)  $10,000, and

(2)  10% of the aggregate of all amounts each of which is the amount, at the time it was made, of a contribution made to the trust before the specified time;

(b)  the person has complied with the requirements of paragraph b of subsection 7 of section 94 of the Income Tax Act (R.S.C. 1985, c. 1, (5th Suppl.)) in respect of the particular time; and

(c)  it is reasonable to conclude that for each transaction that occurred before the end of the particular taxation year at the direction of, or with the consent of, the person

i.  none of the purposes of the transaction was to enable the person to reduce or avoid any liability under paragraph g of section 595 in respect of the trust, and

ii.  the transaction was not part of a series of transactions any of the purposes of which was to enable the person to reduce or avoid any liability under paragraph g of section 595 in respect of the trust.

2015, c. 36, s. 29.