After confirming that, by virtue of the new s. 104(13.3), “the option to include [a] CPP/QPP death benefit in income on a T3 return will no longer be available by making a designation under subsection 104(13.1) if the estate’s taxable income (determined as though the designation were valid) for the year is greater than nil,” CRA then reaffirmed its statement in 2011-0401851C6 that:
where the initial taxation year of a testamentary trust coincides with the executor year and where the sole reason for the rights of a beneficiary being unenforceable is the existence of an executor’s year, the CRA will consider the income of the trust for that year to be payable to the beneficiary or beneficiaries of the trust pursuant to subsection 104(24).
Accordingly, depending on the terms of the will, CRA would be amenable to considering that such income receipt could be flushed out to be beneficiaries.