Rulings Officer: C. Bowen (613) 957-8585
B.C. Conference - Canadian Tax Foundation
September 1992
Question 21
In the circumstances set out in Question 33 of the 1988 Revenue Canada Round Table, can Revenue Canada confirm that the cost of the property to the trust would be the full fair market value under paragraph 69(1)(c)?
Department's Response
In the circumstances set out in question 33 of the Revenue Canada Round Table in the 1988 Conference Report of the Canadian Tax Foundation, personal property was transferred to a trust with the creation of a lifetime income interest payable only to the transferor and a residual capital interest payable to another person. In our opinion, where the remainder interest is acquired by the trust by way of a gift, except as expressly otherwise provided in the Act, paragraph 69(1)(c) of the Act will deem the trust to have acquired the remainder interest at its fair market value at the time of acquisition.
Rulings DirectorateLegislative and Intergovernmental Affairs Branch
CCM #921344
Date: August 28, 1992