I-3 - Taxation Act

Section 692.9 Disposition versions

2006-03-01

692.9. Where a capital interest in a trust is held by a beneficiary at any time, the interest is vested indefeasibly at that time, the trust is not described in any of subparagraphs a to d of the third paragraph of section 647 and interests under the trust are not ordinarily disposed of for consideration that reflects the fair market value of the net assets of the trust, the fair market value of the interest at that time is deemed to be not less than the amount determined by the formula

(A − B) × (C / D).

In the formula provided for in the first paragraph,

(a)  A is the total fair market value of all properties of the trust at the time referred to in the first paragraph;

(b)  B is the aggregate of all amounts each of which is the amount of a debt owing by the trust at the time referred to in the first paragraph or the amount of any other obligation of the trust to pay any amount that is outstanding at that time;

(c)  C is the fair market value at the time referred to in the first paragraph of the interest referred to in the first paragraph, determined without reference to this section; and

(d)  D is the total fair market value at the time referred to in the first paragraph of all interests as beneficiaries under the trust, determined without reference to this section.

2003, c. 2, s. 185.