Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
950928
XXXXXXXXXX T. Murphy
Attention: XXXXXXXXXX
May 25, 1995
Dear Sirs/Mesdames:
Re: XXXXXXXXXX
This is in reply to your letter of March 27, 1995 wherein you requested a ruling on behalf of the Trust. All references herein to sections or components thereof are references to the Income Tax Act (the "Act").
In your letter of April 26, 1995 you advise that it is not possible to obtain an authorization letter from the trustee of the Trust, Income Trust Company, as it has gone into receivership. The confidentially provisions in section 241 prevent us from considering a request for an advance income tax ruling or providing any comment on the tax affairs of a taxpayer without proper authorization. Therefore, we are closing this file and will return your deposit. We offer the following general comments on the phrase "a trust that was created by the will" and on the definition of trust in subsection 108(1).
Subsection 248(9.1) provides that a trust shall be considered to be created by a taxpayer's will if it is created (a) under the terms of the taxpayer's will (i.e., the will specifically creates the trust); or (b) under a court order relating to the law of a province for relief or support of dependents. A direct bequest of an asset of an estate to a beneficiary thereof followed by a transfer of that asset by the beneficiary to a trust would not meet the requirements of subsection 248(9.1).
Paragraph (g) of the definition of trust in subsection 108(1) provides that a trust (other than, among others, a trust described in paragraph 104(4)(a)) all interests in which have vested indefeasibly and no interests in which may become effective in the future is not subject to the deemed realization rule in subsection 104(4). For example, a "non-spousal trust" with one beneficiary whose interest is vested indefeasibly (see Interpretation Bulletin IT-449R) and which does not provide for the creation of successive interests (e.g., lineal descendants) would fit within paragraph (g).
We trust our comments will be of assistance to you.
Yours truly,
R.S. Biscaro
Director
Manufacturing Industries, Partnerships
and Trusts Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
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