I-3 - Taxation Act

Section 663.0.1 Disposition versions

2017-12-07

663.0.1. If an individual’s death occurs on a day in a particular taxation year of a trust and the death is the death or later death referred to in any of subparagraphs a, a.1 and a.4 of the first paragraph of section 653 in respect of the trust, the following rules apply:

(a)  the particular taxation year is deemed to end at the end of that day and a new taxation year of the trust is deemed to begin immediately after that day;

(b)  subject to the second paragraph, the trust’s income (determined without reference to section 657) for the particular taxation year is, despite section 652, deemed to have become payable in the year to the individual and not to have become payable to another beneficiary or to be included under section 662 in computing the individual’s income; and

(c)  in respect of the particular taxation year

i.  subparagraph ii of paragraph b of the definition of “balance-due day” in section 1 is to be read as if “the taxation year” were replaced by “the calendar year in which the taxation year ends”,

ii.  paragraph d of subsection 2 of section 1000 is to be read as if “its taxation year” were replaced by “the calendar year in which its taxation year ends”, and

iii.  the second paragraph of section 1086R57 of the Regulation respecting the Taxation Act (chapter I-3, r. 1) is to be read as if “end of the taxation year” were replaced by “end of the calendar year in which the taxation year ends”.

Subparagraph b of the first paragraph does not apply in respect of the trust for the particular year, unless

(a)  the individual is resident in Canada immediately before the death;

(b)  the trust is, immediately before the death, a testamentary trust that is a post-1971 spousal trust created by the will of a taxpayer who died before 1 January 2017; and

(c)  the trust and the legal representative administering the succession of the individual that is a graduated rate estate have made a valid election under subparagraph iii of paragraph b.1 of subsection 13.4 of section 104 of the Income Tax Act (R.S.C. 1985, c. 1 (5th Suppl.)) to have paragraph b of that subsection 13.4 apply in respect of the trust for the particular year.

Chapter V.2 of Title II of Book I applies in relation to an election made under subparagraph iii of paragraph b.1 of subsection 13.4 of section 104 of the Income Tax Act.

2017, c. 1, s. 156; 2017, c. 29, s. 86.

2017-02-08

663.0.1. If an individual’s death occurs on a day in a particular taxation year of a trust and the death is the death or later death referred to in any of subparagraphs a, a.1 and a.4 of the first paragraph of section 653 in respect of the trust, the following rules apply:

(a)  the particular taxation year is deemed to end at the end of that day and a new taxation year of the trust is deemed to begin immediately after that day;

(b)  the trust’s income (determined without reference to section 657) for the particular taxation year is, despite section 652, deemed to have become payable in the year to the individual and not to have become payable to another beneficiary or to be included under section 662 in computing the individual’s income; and

(c)  in respect of the particular taxation year

i.  paragraph b of the definition of “balance-due day” in section 1 is to be read as if “the year” were replaced by “the calendar year in which the taxation year ends”,

ii.  paragraph d of subsection 2 of section 1000 is to be read as if “its taxation year” were replaced by “the calendar year in which its taxation year ends”, and

iii.  the second paragraph of section 1086R57 of the Regulation respecting the Taxation Act (chapter I-3, r. 1) is to be read as if “end of the taxation year” were replaced by “end of the calendar year in which the taxation year ends”.

2017, c. 1, s. 156.