Mr. A is one of the two trustees for an inter vivos trust for his minor children that provides for the distribution of all income to the beneficiaries, with the trust electing under s. 104(13.1). Mr. A voluntarily pays the income taxes owed by the trust.
Does s. 105(1) apply to tax the beneficiaries on the income taxes paid by the trustee personally? CRA responded:
[I]f Mr. A voluntarily pays the tax in his personal capacity without any provision to that effect in the trust deed, it seems to us that a benefit would not be conferred under the trust.