| 19(1) | 5-9180 |
| F. Francis | |
| (613) 957-3496 |
December 27, 1989
Dear Sirs:
This is in reply to your letter of December 4, 1989, and further to our letter of October 23, 1989 (our reference 5-8724) wherein you requested us to confirm your understanding of the application of paragraph 104(13)(c) of the Income Tax Act (the "Act").
We confirm that the position as stated in paragraph 4 of Interpretation Bulletin IT-342 will not apply where the provisions of paragraph 104(13)(c) of the Act apply. Consequently all amount payable in the year by a non-resident trust would be included in the taxation year that the beneficiary received in or was entitled to enforce payment thereof unless the amounts fall into the two exceptions noted in paragraph 104(13)(c) of the Act.
Furthermore, we confirm your position that a person emigrating from Canada would include in income any amounts that became payable to him by a non-resident trust prior to his departure date subject to the two exceptions in paragraph 104(13)(c) of the Act.
Finally, we confirm that if the amount payable by the non-resident trust represents an amount paid as a distribution of capital by a personal trust, the amount would be excluded from the beneficiary's income by virtue of subparagraph 104(13)(c)(ii) of the Act.
We trust the above comments will be of assistance to you.
Yours truly,
Wayne Douglasfor DirectorFinancial Industries DivisionRulings Directorate