I-3 - Taxation Act

Section 1079.8.3 Disposition versions

2010-10-27

1079.8.3. For the purposes of this Book, the following rules apply:

(a)  if a person is a member, or is deemed because of the application of this paragraph to be a member, of a partnership that is a member of another partnership, the person is deemed to be a member of the other partnership;

(b)  for the purpose of determining whether a corporation is associated with, or whether a person is related to, a partnership at a particular time, the partnership is deemed to be a corporation whose taxation year corresponds to the partnership’s fiscal period and all the voting shares in the capital stock of which are owned at that time by each member of the partnership in a proportion equal to the agreed proportion that would be determined in respect of the member for the partnership’s fiscal period if the fiscal period ended at that time; and

(c)  for the purpose of determining whether a person is related to a taxpayer or a partnership at a particular time, a trust is deemed to be a corporation all the voting shares in the capital stock of which

i.  in the case of a testamentary trust under which one or more beneficiaries are entitled to receive all of the income of the trust that arose before the date of death of one or the last surviving of those beneficiaries (in this paragraph referred to as the “distribution date”) and under which no other person can, before the distribution date, receive or otherwise obtain the enjoyment of any of the income or capital of the trust,

(1)  are owned at that time by such a beneficiary, if that beneficiary’s share of the income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a discretionary power, and if that time occurs before the distribution date, or

(2)  are owned at that time by such a beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of the beneficial interests in the trust of all the beneficiaries, if subparagraph 1 does not apply and that time occurs before the distribution date,

ii.  if a beneficiary’s share of the accumulating income or capital of the trust depends on the exercise by any person of, or the failure by any person to exercise, a discretionary power, are owned at that time by the beneficiary, unless subparagraph i applies and that time occurs before the distribution date,

iii.  in any case where subparagraph ii does not apply, are owned at that time by the beneficiary in a proportion equal to the proportion that the fair market value of the beneficial interest in the trust of the beneficiary is of the fair market value of all beneficial interests in the trust, unless subparagraph i applies and that time occurs before the distribution date, and

iv.  in the case of a trust referred to in section 467, are owned at that time by the person referred to in that section from whom property of the trust or property for which property of the trust was substituted was directly or indirectly received.

2010, c. 25, s. 189.