I-3 - Taxation Act

Section 1120.0.0.1 Disposition versions

2023-09-26

1120.0.0.1. Where an amount (in this section and section 1120.0.0.2 referred to as the “allocated amount”) is paid or became payable to a beneficiary, in a taxation year, by a trust that is a mutual fund trust throughout the year, for the redemption of a unit of the trust that is owned by the beneficiary and where the beneficiary’s proceeds from the disposition of the unit do not include the allocated amount, in computing the trust’s income for the year no deduction may be made in respect of

(a)  the portion of the allocated amount that would be, but for paragraph a of section 657, an amount paid out of the income (other than taxable capital gains) of the trust; and

(b)  the portion of the allocated amount determined by the formula

A – 0.5 (B + C – D).

In the formula in subparagraph b of the first paragraph,

(a)  A is the portion of the allocated amount that would be, but for paragraph a of section 657, an amount paid out of the taxable capital gains of the trust;

(b)  B is the beneficiary’s proceeds from the disposition of the unit on the redemption;

(c)  C is the allocated amount; and

(d)  D is the amount determined by the trustee to be the beneficiary’s cost amount of the unit, the trustee being required to use reasonable efforts to obtain the information required to determine the cost amount.

2022, c. 23, s. 130; 2023, c. 19, s. 122.

2022-06-08

1120.0.0.1. Where an amount (in this section referred to as the “allocated amount”) is paid or became payable to a beneficiary, in a taxation year, by a trust that is a mutual fund trust throughout the year, for the redemption of a unit of the trust that is owned by the beneficiary and where the beneficiary’s proceeds from the disposition of the unit do not include the allocated amount, in computing the trust’s income for the year no deduction may be made in respect of

(a)  the portion of the allocated amount that would be, but for paragraph a of section 657, an amount paid out of the income (other than taxable capital gains) of the trust; and

(b)  the portion of the allocated amount determined by the formula

A – 0.5 (B + C – D).

In the formula in subparagraph b of the first paragraph,

(a)  A is the portion of the allocated amount that would be, but for paragraph a of section 657, an amount paid out of the taxable capital gains of the trust;

(b)  B is the beneficiary’s proceeds from the disposition of the unit on the redemption;

(c)  C is the allocated amount; and

(d)  D is the amount determined by the trustee to be the beneficiary’s cost amount of the unit, the trustee being required to use reasonable efforts to obtain the information required to determine the cost amount.

2022, c. 23, s. 130.