29 May 2018 STEP Roundtable Q. 13, 2018-0744161C6 - 75(2) and Foreign Tax Credit -- summary under Subsection 20(12)

CRA noted that the attribution of foreign source income (e.g., U.S. dividend income) to a settlor under s. 75(2) does not entail the attribution of the non-business taxes (i.e., withholding taxes) thereon so that the settlor cannot claim a foreign tax credit. The settlor would not be able to claim a s. 20(11) or (12) deduction for the same reason, i.e., the settlor did not make the payment. However, the trust itself may be able to claim a s. 20(11) or (12) deduction in calculating the income that is attributed to the settlor.