What happens on the death of a resident beneficiary holding a capital interest in a resident trust which has vested indefeasibly?
CRA indicated that a beneficiary holding an indefeasibly vested capital interest is deemed pursuant to s. 70(5) to have disposed of it for proceeds equaling its fair market value immediately before the beneficiary’s death. S. 107.4(4) deems the fair market value of the capital interest to be not less than the beneficiary’s pro rata share of the fair market value of the total net assets of the trust.