,canada ,cu/oms                       #a
& ,rev5ue ,ag5cy

          ,9t]pret,n ,bullet9
    
,subject3 ,9come ,tax ,act
  ,tru/s--,am.t ,paya#
,numb]3 ,,it-#bhf;,r#b
,date3 ,april #h1 #aihh
,ref];e3 ,subsec;n #ajd7#bd7 7al
  subsec;ns #eb7#f71 #ajd7#d71 7#e71
  7#e.a71 7#f71 7#ac7 & 7#ah7 &
  #ajg7#d71 p>agraph #adi7#a77o4#d7 &
  subp>agraphs #aaj7#a77a77;i7 to
  7;vii77

               ,applic,n
    
  ,? bullet9 c.els & replaces
,,it-#bhf;,r dat$ ,octob] #d1 #aihb4
,curr5t revi.ns >e designat$ 0v]tical
l9es4 ,proposals 3ta9$ 9 ! ,de"p;t (
,f9.e press rel1se ( ,octob] #a1 #aihg
on tru/s & _! b5efici>ies >e n 3sid]$ 9
? rel1se4                             #a
                ,summ>y              a#a
    
  ,c]ta9 tru/s1 9 -put+ _! 9come =a
tax,n ye>1 >e p]mitt$ 6deduct any 9come
paya# 9 ! ye> 6a b5efici>y4 ,? bullet9
d1ls )! m1n+ ( 8an am.t paya# 9 tax,n
ye>0 = purposes (! deduc;n4 ,x al
4cusses specific situ,ns ": am.ts >e
paya# & o!r situ,ns ": !y >e n4

          ,4cus.n & ,9t]pret,n
            7p>agraphs #a-g7
    
#a4 ,subsec;n #ajd7#f7 (! ,act1 : p]mits
  a tru/ 6deduct c]ta9 am.ts 9 -put+
  9come1 applies 6an 8employee tru/0 &a
  8tru/ gov]n$ 0an employee b5efit plan0
  9 p>agraphs #ajd7#f77a7 & 7a4#a7
  respectively :ile p>agraph #ajd7#f77b7
  applies 6any o!r tru/4 ,? bullet9 d1ls
  only ) 9come deduc;ns all[$ "u
  subsec;n #ajd7#f7 6tru/s 6: p>agraph
  #ajd7#f77b7 applies4 8,employee tru/s0
  & 8tru/s gov]n$ 0employee b5efit
  plans0 >e d1lt ) 9 ,,it-#ejb4       #b
             ,,it-#bhf;,r#b          b#a
  ,see ,,it-#cdb = 9=m,n 3c]n+ am.ts 6be
  9clud$ 9 -put+ ! 9come (a b5efici>y (a
  tru/ 6: p>agraph #ajd7#f77b7 applies4
#b4 ,subject 6! limit,ns on sp\se tru/s
  z expla9$ 9 #c 2l1 a tru/ 6: p>agraph
  #ajd7#f77b7 applies c1 0virtue ( t
  p>agraph1 deduct f xs 9come =a tax,n
  ye> s* "p ( xs 9come1 9clud+ xs net
  taxa# capital ga9s1 z 0 paya# 9 ! ye>
  6a b5efici>y4 ,h["e1 ! am.t s deduct$
  m/1 0virtue ( subsec;n #ajd7#ac71 2
  9clud$ 9 ! 9come
--------------------------------------#b
  (! b5efici>y 6:om x 0 paya#4 ,! m1n+ (
  8an am.t paya# 9 a tax,n ye>0 is def9$
  9 subsec;n #ajd7#bd7 z an am.t
  7a7 t is pd 9 ! ye> 6! p]son 6:om x 0
    paya#1 or
  7b7 ) respect 6: ! p]son 6:om x 0
    paya# is 5titl$ 9 ! ye> 65=ce pay;t4
#c4 ,9 -put+ 9come =a tax,n ye> a tru/
  describ$ 9 p>agraph #ajd7#d77a7 7i4e41
  a sp\se tru/7 is1 0virtue ( p>agraph
  #ajd7#f77b71 prev5t$ f deduct+ s*   #c
             ,,it-#bhf;,r#b          a#b
  "p ( xs 9come z 0 paya# 9 ! ye> 6a
  b5efici>y \ ( taxa# capital ga9s or
  o!r 9come >is+ z a 3sequ;e (a 4posi;n
  ( prop]ty "u subsec;n #ajd7#d7 or 7#e7
  or #ajg7#d7 un.s
  7a7 ! tru/ 0 cr1t$ 2f ,novemb] #ac1
    #aiha1 &
  7b7 ! 4posi;n 0 made 6a p]son ref]r$
    6in any ( subp>agraphs
    #aaj7#a77a77;i7 to 7;vii7 or 6,h]
    ,maje/y 9 "r ( ,canada or a prov9ce4
  ,applica# ) respect 6tax,n ye>s 5d$ af
  ,septemb] #cj1 #aihc & 2f #aihf1
  p>agraph #ajd7#f77b7 impos$ ! same
  re/ric;n ) respect 6taxa# capital ga9s
  >is+ z a 3sequ;e (a deem$ 4posi;n1 "u
  subsec;n #ajd7#e.a71 ( 9dex$
  securities [n$ "u an 9dex$ secur;y
  9ve/;t plan4
#d4 ,al? ! b5efici>ies (a tru/ may h !
  p[] 6am5d ! tru/ de$ at any "t s z
  6cause ! 9come 6be paya# 6!m1 ! m]e
  pres;e ( ? unex]cis$ p[] is n a basis
  = tr1t+ tru/ 9come z 2+ paya# =     #d
             ,,it-#bhf;,r#b          b#b
  purposes ( subsec;ns #ajd7#f7 & 7#bd74
  ,an am.t 2comes paya# only :5 ! p[]
  has 9 fact be5 ex]cis$ &! tru/ de$
  am5d$ acly4 ,fur!rmore1 ev5 ?\< "s or
  all (! b5efici>ies >e !mvs tax exempt1
  ! tru/ is n"e!.s taxa# on xs 9come
  except 6! ext5t t s* 9come is paya#
  6xs b5efici>ies4 ,h["e1 =! #aihg &
  subsequ5t tax,n ye>s1 a tru/ w 2
  exempt f ,"p ;,i tax on xs taxa# 9come
  if x is a prescrib$ ma/] tru/ t holds
  9ve/;ts exclusively = regi/]$ p5.n
  funds or plans & elects 6h ! provi.ns
  ( p>agraph #adi7#a77o4#d7 apply4
#e4 ,": a b5efici>y c 5=ce pay;t ( an
  am.t 9 respect ( tru/ 9come 0=c+ !
  tru/ee1 9 a3ord.e )! t]ms (! tru/ de$1
  0-mon or /atute law or 0"s o!r
  au?or;y1 6w9d up ! tru/1 x is !
  ,de"p;t's view t no am.t 2comes paya#
  until s* "t z ! b5efici>y ex]cises !
  au?or;y & 9 fact causes ! tru/ 6be
  w.d-up1 except 6! ext5t t an am.t is
  o!rwise pd or paya# at an e>li]     #e
             ,,it-#bhf;,r#b          c#b
  date4 ,? view al applies ": ! "r (a
  b5efici>y 6dem& a pay;t ( 9come is
  subject 6! approval (a ?ird "py
  provid$ = 9 ! tru/ de$ 6d1l ) s*
  matt]s2 no am.t is paya# until a dem&
  = pay;t ( 9come has be5 duly approv$
  0! ?ird "py4 ,if a tru/ee has be5 giv5
--------------------------------------#c
  ! 4cre;n 64tribute any "p (! 9come (!
  tru/1 !n no am.t is paya# until !
  tru/ee's 4cre;n has be5 ex]cis$4
#f4 ,"u -mon law rules1 ! 9itial #ab
  mon? p]iod =a te/a;t>y tru/1 -m5c+ )!
  date (! settlor's d1?1 is ref]r$ 6z !
  8executor's ye>0 &! "r 69come (! tru/
  is1 dur+ ! executor's ye>1 un5=cea# 0a
  b5efici>y (! tru/4 ,9 spite ( s* -mon
  law rules1 ": ! 9itial tax,n ye> (a
  te/a;t>y tru/ co9cides )! executor's
  ye> & ": ! sole r1son =! "rs (a
  b5efici>y 2+ un5=cea# is ! exi/;e ( an
  executor's ye>1 ! ,de"p;t w 3sid] !
  9come (! tru/ = t ye> 6be paya# 6!
  b5efici>y or b5efici>ies (! tru/    #f
             ,,it-#bhf;,r#b          a#c
  pursuant 6subsec;n #ajd7#bd74 ,h["e1
  if ev5 "o b5efici>y (! tru/ objects 6?
  tr1t;t ) respect 6! executor's ye>1 !
  9come (! tru/ = t ye>1 6! ext5t t x 0
  n actu,y 4burs$ dur+ t ye>1 w 2 tax$ 9
  ! h&s (! tru/4 ,9 any case ": ! tru/
  has be5 w.d-up &! f9al ;,t-#c return
  is fil$ =a p]iod : t]m9ates 2f ! 5d (!
  executor's ye>1 ! 9come (! tru/
  79clud+ taxa# capital ga9s7 e>n$ = t
  p]iod is 3sid]$ 6h be5 pd 6!
  b5efici>ies (! tru/ 9 ! cal5d> ye> 9 :
  t p]iod 5ds1 except = any "p (! tru/'s
  9come t 0 4burs$ 0! tru/ee 6p]sons o!r
  ?an b5efici>ies pursuant 6! dec1s$'s w
  or ! op],n ( law 7e4g41 ! w /ipulat$ t
  debts >e 6be pd \ ( 9come74
#g4 ,pursuant 6subsec;n #ajd7#ah7 9come
  is 3sid]$ 6be paya# = purposes (
  subsec;ns #ajd7#f7 & 7#ac7 ":
  7a7 ! 9come is held 9 tru/ =a m9or ^:
    "r "!to has ve/$1 &
  7b7 ! only r1son t x 0 n paya# 0 2c !
    b5efici>y 0 a m9or4               #g
             ,,it-#bhf;,r#b          b#c
  ,! "r ref]r$ 6in 7a7 does n h 6ve/
  9def1sibly4 ,! require;t 9 7b7 w 2
  -pli$ ) ": ! t]ms (! tru/ provide t !
  am.t 2 )held solely 2c ! b5efici>y is
  a m9or4 ,h["e1 ": ! t]ms (! tru/
  agree;t provide t ! pay;t may 2 )held
  = any r1son o!r ?an t describ$ 9 7b7
  abv1 subsec;n #ajd7#ah7 does n apply4
  ,? wd 2 ! case ":1 = example1 a tru/ee
  is giv5 4cre;n>y p[] 0! t]ms (a tru/
  agree;t 6)hold tru/ funds & *ooses
  6)hold 9come (! tru/ 2c ei ! b5efici>y
  or ! b5efici>y's gu>dian is n 9 ne$ (
  funds4

          ,mutual ,fund ,tru/s
            7p>agraphs #h-i7
    
#h4 ,! m]e "r (a unit-hold] 6redeem
  units on dem& wd n 2 su6ici5t 6meet !
  pay;t 5=ce;t require;ts ( subsec;ns
  #ajd7#f7 & 7#bd74 ,any 9come alloc,n
  m/ 2 a3ompani$ 0a valid
                                      #h
             ,,it-#bhf;,r#b           #d
  resolu;n or decl>,n (! tru/ees ":by !
  unit-hold]s acquire an irrevoca# "r
  65=ce pay;t4 ,0? m1ns ! 9come allocat$
  is subject 6tax 9 ! h&s (! unit-
  hold]s4 ,a clause 9 ! tru/ agree;t1
  3f]r+ on ! unit-hold]s a legal "r
  65=ce pay;t (! tru/'s 9come 9 ! ye>1
  wd h ! same result4
#i4 ,! am.t paya# does n h 6be pd 9 ca%4
  ,an alloc,n ( a4i;nal units 9 rel,n 6!
  unit-hold]'s 9t]e/ 9 ! tru/ 9come wd
  al 2 an am.t paya# 9 ! ye> =! purposes
  ( subsec;n #ajd7#f74
#aj4 ,special rules >e provid$ 9
  subsec;n #eb7#f7 9 ord] 6avoid d\#
  tax,n :5 an am.t paya# 0 n pd 9 fact1
  b capitaliz$ 0! tru/4 ,see ,,it-#cij1
  8,unit ,tru/s--,co/s ( ,"rs &
  ,adju/;ts 6,co/ ,base04




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