An individual, who owned a principal residence that he occupied with his wife, transferred the residence to a trust referred to in s. 73(1.01)(c)(ii), the terms of which satisfied the conditions in s. 73(1.02). After the transfer of the residence to the trust, the wife continued to live with the individual. Does such occupation by her result in s. 73(1.01)(c)(ii) not being satisfied? CRA responded:
In a situation where a trust deed provides an individual the right to receive all of the income of the trust that arises before the individual’s death and no person except the individual may, before the individual’s death, receive or otherwise obtain the use of any of the income or capital of the trust, we are of the view that the fact that the individual permitted his spouse or common-law partner to live with him should not, by itself, result in the condition in subparagraph 73(1.01)(c)(ii) not being met.