I-3 - Taxation Act

Section 658 Disposition versions

2006-12-06

658. In this Title,

“accumulating income” of a trust for a taxation year means the amount that would be the income of the trust for the year if that amount were computed

(a)  without reference to subparagraphs a and a.1 of the first paragraph of section 653, sections 656.2 to 656.3.1, paragraph b of section 657 and section 691;

(b)  as if the trust were deducting, in computing its income for the year under paragraph a of section 657, the greatest amount it would, but for section 657.1.0.1, be entitled to deduct for the year under that paragraph;

(c)  (paragraph repealed);

(d)  (paragraph repealed);

(e)  without reference to section 92.5.2, except where that section applies to an amount paid to a trust described in the second paragraph of section 441.1 and before the death of the spouse referred to in that paragraph;

(f)  without reference to section 92.5.3.1, except where that section applies to an amount paid to a trust described in the second paragraph of section 441.2 and before the death of the spouse referred to in that paragraph;

“preferred beneficiary” under a trust for a taxation year of the trust means a beneficiary under the trust at the end of the year who is resident in Canada at that time if

(a)  the beneficiary is

i.  an individual in respect of whom subparagraphs a to c of the first paragraph of section 752.0.14 apply for the individual’s taxation year, in this definition referred to as the “beneficiary’s year”, that ends in the taxation year of the trust, or

ii.  an individual

(1)  who attained the age of 18 years before the end of the beneficiary’s year, was a dependant of another individual for the beneficiary’s year and was dependent on the other individual because of an impairment in mental or physical functions, and

(2)  whose income, computed without reference to section 659, for the beneficiary’s year does not exceed the amount used for that year under clause B of subparagraph ii of paragraph a of the definition of “preferred beneficiary” in subsection 1 of section 108 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement); and

(b)  the beneficiary is

i.  the settlor of the trust,

ii.  the spouse or former spouse of the settlor of the trust, or

iii.  a child, grandchild or great grandchild of the settlor of the trust or the spouse of any such person;

“settlor”

(a)  in relation to a testamentary trust, means the individual referred to in section 677; and

(b)  in relation to an inter vivos trust,

i.  if the trust is created by the transfer, assignment or other disposition of property thereto by not more than one individual and the fair market value of that property and of the property subsequently disposed of to the trust by the same individual exceeds the fair market value, at the time of disposition, of property subsequently disposed of to the trust by any other person, means that individual, and

ii.  if the trust is created by the transfer, assignment or any other disposition of property made jointly by an individual and his spouse and by no other person and the rule provided for in subparagraph i applies to that disposition, means that individual and his spouse.

In the first paragraph, a dependant of an individual for a taxation year means a person who, during the year, is described in paragraph f of section 752.0.1.

1972, c. 23, s. 496; 1984, c. 15, s. 142; 1985, c. 25, s. 106; 1990, c. 59, s. 224; 1994, c. 22, s. 231; 1997, c. 31, s. 65; 2000, c. 5, s. 143; 2003, c. 2, s. 163; 2004, c. 21, s. 92; 2005, c. 1, s. 129; 2005, c. 38, s. 81; 2006, c. 13, s. 44; 2006, c. 36, s. 44.

2006-06-13

658. In this Title,

"accumulating income" of a trust for a taxation year means the amount that would be the income of the trust for the year if that amount were computed

(a)  without reference to subparagraphs a and a.1 of the first paragraph of section 653, sections 656.2 to 656.3.1, paragraph b of section 657 and section 691;

(b)  as if the trust were deducting, in computing its income for the year under paragraph a of section 657, the greatest amount it would, but for section 657.1.0.1, be entitled to deduct for the year under that paragraph;

(c)  (paragraph repealed);

(d)  (paragraph repealed);

(e)  without reference to section 92.5.2, except where that section applies to an amount paid to a trust described in the second paragraph of section 441.1 and before the death of the spouse referred to in that paragraph;

(f)  without reference to section 92.5.3.1, except where that section applies to an amount paid to a trust described in the second paragraph of section 441.2 and before the death of the spouse referred to in that paragraph;

"preferred beneficiary" under a trust for a taxation year of the trust means a beneficiary under the trust at the end of the year who is resident in Canada at that time if

(a)  the beneficiary is

i.  an individual in respect of whom subparagraphs a to c of the first paragraph of section 752.0.14 apply for the individual’s taxation year, in this definition referred to as the "beneficiary’s year", that ends in the taxation year of the trust, or

ii.  an individual

(1)  who attained the age of 18 years before the end of the beneficiary’s year, was a dependant of another individual for the beneficiary’s year and was dependent on the other individual because of mental or physical infirmity, and

(2)  whose income, computed without reference to section 659, for the beneficiary’s year does not exceed the amount used for that year under clause B of subparagraph ii of paragraph a of the definition of "preferred beneficiary" in subsection 1 of section 108 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement); and

(b)  the beneficiary is

i.  the settlor of the trust,

ii.  the spouse or former spouse of the settlor of the trust, or

iii.  a child, grandchild or great grandchild of the settlor of the trust or the spouse of any such person;

"settlor"

(a)  in relation to a testamentary trust, means the individual referred to in section 677; and

(b)  in relation to an inter vivos trust,

i.  if the trust is created by the transfer, assignment or other disposition of property thereto by not more than one individual and the fair market value of that property and of the property subsequently disposed of to the trust by the same individual exceeds the fair market value, at the time of disposition, of property subsequently disposed of to the trust by any other person, means that individual, and

ii.  if the trust is created by the transfer, assignment or any other disposition of property made jointly by an individual and his spouse and by no other person and the rule provided for in subparagraph i applies to that disposition, means that individual and his spouse.

In the first paragraph, a dependant of an individual for a taxation year means a person who, during the year, is described in paragraph f of section 752.0.1.

1972, c. 23, s. 496; 1984, c. 15, s. 142; 1985, c. 25, s. 106; 1990, c. 59, s. 224; 1994, c. 22, s. 231; 1997, c. 31, s. 65; 2000, c. 5, s. 143; 2003, c. 2, s. 163; 2004, c. 21, s. 92; 2005, c. 1, s. 129; 2005, c. 38, s. 81; 2006, c. 13, s. 44.

2006-03-01

658. In this Title,

"accumulating income" of a trust for a taxation year means the amount that would be the income of the trust for the year if that amount were computed

(a)  without reference to subparagraphs a and a.1 of the first paragraph of section 653, sections 656.2 to 656.3.1, paragraph b of section 657 and section 691;

(b)  as if the greatest amount that the trust was entitled to deduct under paragraph a of section 657 in computing its income for the year were so deducted;

(c)  (paragraph repealed);

(d)  (paragraph repealed);

(e)  without reference to section 92.5.2, except where that section applies to an amount paid to a trust described in the second paragraph of section 441.1 and before the death of the spouse referred to in that paragraph;

(f)  without reference to section 92.5.3.1, except where that section applies to an amount paid to a trust described in the second paragraph of section 441.2 and before the death of the spouse referred to in that paragraph;

"preferred beneficiary" under a trust for a taxation year of the trust means a beneficiary under the trust at the end of the year who is resident in Canada at that time if

(a)  the beneficiary is

i.  an individual in respect of whom subparagraphs a to c of the first paragraph of section 752.0.14 apply for the individual’s taxation year, in this definition referred to as the "beneficiary’s year", that ends in the taxation year of the trust, or

ii.  an individual

(1)  who attained the age of 18 years before the end of the beneficiary’s year, was a dependant of another individual for the beneficiary’s year and was dependent on the other individual because of mental or physical infirmity, and

(2)  whose income, computed without reference to section 659, for the beneficiary’s year does not exceed the amount used for that year under clause B of subparagraph ii of paragraph a of the definition of "preferred beneficiary" in subsection 1 of section 108 of the Income Tax Act (Revised Statutes of Canada, 1985, chapter 1, 5th Supplement); and

(b)  the beneficiary is

i.  the settlor of the trust,

ii.  the spouse or former spouse of the settlor of the trust, or

iii.  a child, grandchild or great grandchild of the settlor of the trust or the spouse of any such person;

"settlor"

(a)  in relation to a testamentary trust, means the individual referred to in section 677; and

(b)  in relation to an inter vivos trust,

i.  if the trust is created by the transfer, assignment or other disposition of property thereto by not more than one individual and the fair market value of that property and of the property subsequently disposed of to the trust by the same individual exceeds the fair market value, at the time of disposition, of property subsequently disposed of to the trust by any other person, means that individual, and

ii.  if the trust is created by the transfer, assignment or any other disposition of property made jointly by an individual and his spouse and by no other person and the rule provided for in paragraph a applies to that disposition, means that individual and his spouse.

In the first paragraph, a dependant of an individual for a taxation year means a person who, during the year, is described in paragraph f of section 752.0.1.

1972, c. 23, s. 496; 1984, c. 15, s. 142; 1985, c. 25, s. 106; 1990, c. 59, s. 224; 1994, c. 22, s. 231; 1997, c. 31, s. 65; 2000, c. 5, s. 143; 2003, c. 2, s. 163; 2004, c. 21, s. 92; 2005, c. 1, s. 129; 2005, c. 38, s. 81.