CRA acknowledged that, in Satoma, Noël CJ. noted that express exclusions in most of the attribution provisions (e.g., s. 74.1) of the attributed income in the hands of the income transferor were inserted for greater certainty, and that the same dividend cannot be received by two persons at once – with the implication that income attributed to a trust contributor under s. 75(2) is not income of the trust even in the absence of such a specific exclusion.
However, CRA indicated that these comments were not specifically directed at the T3 return, which is a return of information (in addition to a return of income) affecting the taxation of persons with some connection to the trust. Reg. 204 imposes a requirement to file a T3 return where the trustee has control of, or receives, income, gains, or profits in the trustee’s fiduciary capacity – even if the Trust computes nil income, e.g., because of the application of s. 75(2). The trust must still report the income on its T3 return and issue a T3 slip reporting the amount as that of the contributor of the property.