I-3 - Taxation Act

Section 597.0.6 Disposition versions

2015-12-04

597.0.6. The rules in the second paragraph apply at a particular time in respect of a particular person, and to a particular property, in respect of a trust not resident in Canada, if at that time

(a)  the particular person is resident in Canada; and

(b)  the trust holds the particular property on condition that the particular property or property substituted for the particular property may revert to the particular person or pass to one or more persons or partnerships to be determined by the particular person, or may not be disposed of by the trust during the existence of the particular person, except with the particular person’s consent or in accordance with the particular person’s direction.

In applying this chapter in respect of the trust for a taxation year of the trust that includes the particular time, the rules referred to in the first paragraph are as follows:

(a)  every transfer or loan made at or before the particular time by the particular person (or by a trust or partnership of which the particular person was a beneficiary or member, as the case may be) of the particular property, of another property for which the particular property is a substitute, or of property from which the particular property derives, or the other property derived, its value in whole or in part, directly or indirectly, is deemed to be a transfer or loan, as the case may be, by the particular person

i.  that is not an arm’s length transfer, and

ii.  that is, for the purposes of paragraph c of section 594 and section 597.0.7, a transfer or loan of restricted property; and

(b)  paragraph c of section 594 is to be read without reference to its subparagraph iii in its application to each transfer and loan described in subparagraph a.

2015, c. 36, s. 29.