I-3 - Taxation Act

Section 668.5 Disposition versions

2015-10-21

668.5. (Repealed).

2003, c. 2, s. 168; 2015, c. 21, s. 219.

2006-03-01

668.5. Where an amount is designated in respect of a beneficiary by a trust for a particular taxation year of the trust that includes 28 February 2000 or 17 October 2000 and that amount, in this section referred to as the “allocated gain” is, because of section 668, deemed to be a taxable capital gain of the beneficiary from the disposition of capital property for the taxation year of the beneficiary in which the particular year ends, the following rules apply:

(a)  the beneficiary is deemed to have realized capital gains, in this section referred to as the “deemed gains”, from the disposition of capital property in the beneficiary’s taxation year in which the particular year ends equal to the amount by which the amount obtained by dividing the amount of the allocated gain by the fraction in paragraphs a to d of section 231.0.1 that applies to the trust for the particular year exceeds the amount claimed by the beneficiary not exceeding the beneficiary’s exempt capital gains balance for the year in respect of the trust;

(b)  notwithstanding section 668 and except as a consequence of the application of paragraph a, the amount of the allocated gain shall not be included in computing the beneficiary’s income for the beneficiary’s taxation year in which the particular year ends;

(c)  the trust shall disclose to the beneficiary in prescribed form the portion of the deemed gains that are in respect of capital gains realized on dispositions of property that occurred before 28 February 2000, after 27 February 2000 but before 18 October 2000, and after 17 October 2000 and, failing which, the deemed gains are deemed to be in respect of capital gains realized on dispositions of property that occurred before 28 February 2000;

(d)  where a trust so elects under this paragraph in its fiscal return filed under this Part for the particular year,

i.  the portion of the deemed gains that are in respect of capital gains from dispositions of property that occurred before 28 February 2000 is deemed to be equal to that proportion of the deemed gains that the number of days that are in the particular year and before 28 February 2000 is of the number of days that are in the particular year,

ii.  the portion of the deemed gains that are in respect of capital gains from dispositions of property that occurred in the particular year and in the period that began on 28 February 2000 and ended on 17 October 2000, is deemed to be equal to that proportion of the deemed gains that the number of days that are in the particular year and in that period is of the number of days that are in the particular year, and

iii.  the portion of the deemed gains that are in respect of capital gains from dispositions of property that occurred in the particular year and in the period that began on 18 October 2000 and ended at the end of the particular year is deemed to be equal to that proportion of the deemed gains that the number of days that are in the particular year and in that period is of the number of days that are in the particular year; and

(e)  no amount may be claimed by the beneficiary under section 251.3 in respect of the allocated gain.

2003, c. 2, s. 168.