7 June 2019 STEP Roundtable Q. 2, 2019-0798491C6 - Alter ego trust and donations -- summary under Clause (c)(ii)(C)

The residual beneficiaries of an alter ego trust are a class of registered charities as determined by the trustees, the trustees make payments over the next 3 years following the settlor’s death to various of those charities, and at the end of the 3 years, the remaining capital is required to be distributed to registered charities. CRA indicated that the payments made during the 3 years likely qualified as gifts, as they were made at the discretion of the trustees – in which case, a donation tax credit could be claimed. However, as there appeared to be no discretion as to whether the amounts were to be paid to charities at the end of the 3 years, those distributions would not qualify as gifts.