In the event that the terms of the deed of trust for one of the trusts intended to qualify under ss. 73(1.01) and (1.02) provide for the possibility of making gifts to a registered charity before the death of the individual (and/or spouse or common-law partner) would this have the effect of disqualifying the trust for the purposes of the s. 73 rollover, e.g., where no such gift in fact occurred? CRA responded:
Where the terms of a trust indenture provide for the possibility of making gifts to a qualified donee, that is to a person other than the taxpayers referred to in paragraph 73(1.01)(c), before the death of the latter, we are of the view that the condition set out in that paragraph is not satisfied.
The fact that no gift was made during the lifetime of the taxpayers referred to in paragraph 73(1.01)(c) does not change our position. Indeed, the mere possibility that a person other than the latter may, before their death, receive or otherwise obtain the use of any of the income or capital of the trust is sufficient to disqualify the trust for the purposes of the rollover provided for in subsection 73(1).