I-3 - Taxation Act

Section 656.9 Disposition versions

2021-06-02

656.9. Where capital property, land included in inventory, Canadian resource property or foreign resource property is transferred at a particular time by a trust (in this section referred to as the “transferor trust”) to another trust (in this section referred to as the “transferee trust”) in circumstances in which subparagraph b of the second paragraph of section 248 or section 688 or 692.8 applies, the following rules apply:

(a)  subject to paragraphs b to b.3, for the purposes of sections 653 to 656.3.1 after the particular time,

i.  the first day, in this section referred to as the “disposition day”, that ends at or after the particular time that would, but for subparagraphs a.2 and a.3 of the first paragraph of section 653, be determined in respect of the transferee trust is deemed to be the earliest of

(1)  the first day ending at or after the particular time that would be determined in respect of the transferor trust under section 653 without regard to the transfer and any transaction or event occurring after the particular time,

(2)  the first day ending at or after the particular time that would otherwise be determined in respect of the transferee trust under section 653 without regard to any transaction or event occurring after the particular time,

(3)  where the transferor trust is a joint spousal trust, a post-1971 spousal trust or a pre-1972 spousal trust and the spouse referred to in subparagraph a of the first paragraph of section 653 or in the definition of “pre-1972 spousal trust” in section 652.1, is alive at the particular time, the first day that ends at or after the particular time,

(3.1)  where the transferor trust is an alter ego trust, a trust to which subparagraph a.4 of the first paragraph of section 653 applies or a joint spousal trust, and the taxpayer referred to in subparagraph a or a.4 of that first paragraph, as the case may be, is alive at the particular time, the first day that ends at or after the particular time, and

(4)  where the disposition day would, but for the application of this section to the transfer, be determined in respect of the transferee trust under paragraph a of section 656.4, and the particular time is after the day that would, but for section 656.4, be determined in respect of the transferee trust under subparagraph b of the first paragraph of section 653, the first day ending at or after the particular time, and

ii.  where the disposition day determined in respect of the transferee trust under subparagraph i is earlier than the day referred to in subparagraph 2 of subparagraph i in respect of the transferee trust, sections 653 to 656.3.1 do not apply to the transferee trust on the day referred to in the said subparagraph 2 in respect of the transferee trust;

(b)  where the transferor trust is a trust, in this paragraph referred to as an “eligible trust”, that is a post-1971 spousal trust or a pre-1972 spousal trust, and the spouse referred to in subparagraph a of the first paragraph and the second paragraph of section 653 or in the definition of “pre-1972 spousal trust” in section 652.1 is alive at the particular time, paragraph a does not apply in respect of the transfer where the transferee trust is also an eligible trust;

(b.1)  paragraph a does not apply in respect of the transfer where

i.  the transferor trust is an alter ego trust,

ii.  the taxpayer referred to in subparagraph a of the first paragraph of section 653 is alive at the particular time, and

iii.  the transferee trust is an alter ego trust;

(b.2)  paragraph a does not apply in respect of the transfer where

i.  the transferor trust is a joint spousal trust,

ii.  either the taxpayer referred to in subparagraph a of the first paragraph of section 653, or the taxpayer’s spouse referred to in that subparagraph, is alive at the particular time, and

iii.  the transferee trust is a joint spousal trust;

(b.3)  paragraph a does not apply in respect of the transfer where

i.  the transferor trust is a trust to which subparagraph a.4 of the first paragraph of section 653 applies,

ii.  the taxpayer referred to in subparagraph a.4 of the first paragraph of section 653 is alive at the particular time, and

iii.  the transferee trust is a trust to which subparagraph a.4 of the first paragraph of section 653 applies; and

(c)  for the purposes of section 656.4, unless a day ending before the particular time has been determined under subparagraph a.1 or b of the first paragraph of section 653, or would, but for section 656.4, have been so determined, a day determined under subparagraph i of paragraph a is deemed to be a day determined under the said subparagraph a.1 or b, as the case may be, in respect of the transferee trust.

1994, c. 22, s. 228; 2003, c. 2, s. 160; 2004, c. 21, s. 90; 2021, c. 14, s. 56.

2006-03-01

656.9. Where capital property, other than excluded property, land included in inventory, Canadian resource property or foreign resource property is transferred at a particular time by a trust, in this section referred to as the “transferor trust”, to another trust, in this section referred to as the “transferee trust”, in circumstances in which subparagraph b of the second paragraph of section 248 or section 688 or 692.8 applies, the following rules apply:

(a)  subject to paragraphs b to b.3, for the purposes of sections 653 to 656.3.1 after the particular time,

i.  the first day, in this section referred to as the “disposition day”, that ends at or after the particular time that would, but for subparagraphs a.2 and a.3 of the first paragraph of section 653, be determined in respect of the transferee trust is deemed to be the earliest of

(1)  the first day ending at or after the particular time that would be determined in respect of the transferor trust under section 653 without regard to the transfer and any transaction or event occurring after the particular time,

(2)  the first day ending at or after the particular time that would otherwise be determined in respect of the transferee trust under section 653 without regard to any transaction or event occurring after the particular time,

(3)  where the transferor trust is a joint spousal trust, a post-1971 spousal trust or a pre-1972 spousal trust and the spouse referred to in subparagraph a of the first paragraph of section 653 or in the definition of “pre-1972 spousal trust” in section 652.1, is alive at the particular time, the first day that ends at or after the particular time,

(3.1)  where the transferor trust is an alter ego trust, a trust to which subparagraph a.4 of the first paragraph of section 653 applies or a joint spousal trust, and the taxpayer referred to in subparagraph a or a.4 of that first paragraph, as the case may be, is alive at the particular time, the first day that ends at or after the particular time, and

(4)  where the disposition day would, but for the application of this section to the transfer, be determined in respect of the transferee trust under paragraph a of section 656.4, and the particular time is after the day that would, but for section 656.4, be determined in respect of the transferee trust under subparagraph b of the first paragraph of section 653, the first day ending at or after the particular time, and

ii.  where the disposition day determined in respect of the transferee trust under subparagraph i is earlier than the day referred to in subparagraph 2 of subparagraph i in respect of the transferee trust, sections 653 to 656.3.1 do not apply to the transferee trust on the day referred to in the said subparagraph 2 in respect of the transferee trust;

(b)  where the transferor trust is a trust, in this paragraph referred to as an “eligible trust”, that is a post-1971 spousal trust or a pre-1972 spousal trust, and the spouse referred to in subparagraph a of the first paragraph and the second paragraph of section 653 or in the definition of “pre-1972 spousal trust” in section 652.1 is alive at the particular time, paragraph a does not apply in respect of the transfer where the transferee trust is also an eligible trust;

(b.1)  paragraph a does not apply in respect of the transfer where

i.  the transferor trust is an alter ego trust,

ii.  the taxpayer referred to in subparagraph a of the first paragraph of section 653 is alive at the particular time, and

iii.  the transferee trust is an alter ego trust;

(b.2)  paragraph a does not apply in respect of the transfer where

i.  the transferor trust is a joint spousal trust,

ii.  either the taxpayer referred to in subparagraph a of the first paragraph of section 653, or the taxpayer’s spouse referred to in that subparagraph, is alive at the particular time, and

iii.  the transferee trust is a joint spousal trust;

(b.3)  paragraph a does not apply in respect of the transfer where

i.  the transferor trust is a trust to which subparagraph a.4 of the first paragraph of section 653 applies,

ii.  the taxpayer referred to in subparagraph a.4 of the first paragraph of section 653 is alive at the particular time, and

iii.  the transferee trust is a trust to which subparagraph a.4 of the first paragraph of section 653 applies; and

(c)  for the purposes of section 656.4, unless a day ending before the particular time has been determined under subparagraph a.1 or b of the first paragraph of section 653, or would, but for section 656.4, have been so determined, a day determined under subparagraph i of paragraph a is deemed to be a day determined under the said subparagraph a.1 or b, as the case may be, in respect of the transferee trust.

1994, c. 22, s. 228; 2003, c. 2, s. 160; 2004, c. 21, s. 90.