Words and Phrases - "year"

The taxpayer was an income beneficiary of two trusts with taxation year ends of April 30 and October 31, respectively. Before December 31, 1981, the trusts received taxable dividends from Canadian corporations and immediately distributed them to the taxpayer, making an s. 104(19) designation to the taxpayer in the 1982 income tax returns of the trusts.

At issue was whether the dividends included by the taxpayer in her income for 1982 were eligible for a dividend tax credit based on the tax credit rate for 1982, or for 1981.

Rip J found that the reference in the legislation amending the dividend tax credit rate effective for dividends “received after 1981,” referred to dividends received after the 1981 calendar year rather than after the 1981 taxation year. He then found that, as the dividends were in fact received by the trusts in their 1981 calendar years, albeit in their 1982 taxation years, the 1981 dividend tax credit rate applied, stating:

The dividends in question were in fact received by the trusts in 1981. The trusts designated that the dividends be deemed to be taxable dividends received by the appellant in its 1982 taxation year and not to be taxable dividends received by the trusts. The trusts are deemed not to have received the dividends from the particular corporations; the dividends must have been “received” by the appellant some time in the 1982 taxation year of the trusts and common sense dictates that the dividends are deemed to be received by the appellant from the paying corporations when they were actually received by the trusts, that is, in 1981.