Does a deemed year end occur pursuant to s. 104(13.4)(a) where a trust that would otherwise be an alter ego trust makes an election under s. 104(4)(a)(ii.1) to not have that s. apply?
CRA noted that if the trust elects in its T3 return for its first taxation year, then it will no longer fall within the scope of s. 104(4)(a) – and because it did not apply, CRA would consider that the settlor’s death would not be relevant for the purposes of the preamble to s. 104(13.4). Consequently, s. 104(13.4)(a) would not apply to deem a taxation year to occur at the end of the day on which the settlor dies.