A housing unit is subject to a usufruct created by the Quebec will of Mr. X, with Mr. X’s surviving spouse (Ms. X) being the usufructuary, and their child being the bare owner. Ms. X ordinarily inhabits the housing unit.
The creation of the usufruct would create a deemed (testamentary) trust under s. 248(3), which would qualify as a spousal trust for purposes of the s. 70(6) rollover to such trust of the residence assuming that, under the terms of the will, no person other than Ms. X would be entitled during her lifetime to receive or otherwise obtain the use of any part of the income or capital of the trust.
Regarding a variation of the facts, where the usufruct for Ms. X (following Mr. X's death) was for specific term of years, CRA stated:
T]he condition in subparagraph 70(6)(b)(ii) would not be satisfied because, in order to meet that condition, the terms of the will must be such that no person other than the spouse or common-law partner of the deceased individual could, before his or her death, receive or otherwise obtain the use of any of the income or capital of the deemed trust.
Consequently … upon Mr. X's death, subsection 70(5) would apply … .