IT-286R2, para. 6 states that the income of the trust for that year is considered to be payable to the beneficiaries where the sole reason for the rights of a beneficiary being unenforceable is the existence of an executor's year, the taxation year of a testamentary trust coincides with the executor’s year, and all of the beneficiaries agree to this treatment. CRA confirmed that where the initial taxation year of the estate is less than one year, the above comments apply to the “stub” portion of the executor’s year that is within the first estate year. In this regard, CRA indicated that the mere fact that the beneficiaries each had a fixed percentage entitlement to the net estate would not by itself result in the trust income being considered to be payable to them during the stub executor’s year.
As to the portion of the executor’s year falling in the second estate year, CRA effectively implied that the executor’s year concept was irrelevant given that the income for the second estate year could be paid or payable to the beneficiaries under the general s. 104(24) rules by the end of that year.