7 November 1990 External T.I. 9025005 F - Interaction Between 21-year Deemed Disposition Rule of a Trust and Preferred Beneficiary Election

By services, 18 January, 2022
Official title
Interaction Between 21-year Deemed Disposition Rule of a Trust and Preferred Beneficiary Election
Language
French
CRA tags
104(4), 104(14), 108(1) accumulating income
Document number
Citation name
9025005
Severed letter type
Technical Interpretation - External
d7 import status
Drupal 7 entity type
Node
Drupal 7 entity ID
632811
Extra import data
{
"field_external_guid": [],
"field_proprietary_citation": [],
"field_release_date_new": "1990-11-07 07:00:00",
"field_tags": []
}
Main text
24(1) 5-902500
  D.S. Delorey
  (613) 957-3495

19(1)

November 7, 1990

Dear Madam:

This is in reply to your letter of September 14, 1990 concerning the interaction between the 21-year deemed disposition rule under subsection 104(4) of the Income Tax Act (the "Act") and the preferred beneficiary election available under subsection 104(14) of the Act.

In particular, you ask if the "accumulating income" referred to in subsection 104(14) of the Act would include taxable capital gains arising as a consequence of a deemed disposition under subsection 104(4) of the Act by a trust other than a "spouse trust".

The short answer is yes. As indicated in paragraph 11 of Interpretation Bulletin IT-349R, the definition of "accumulating income" in paragraph 108(1)(a) of the Act excludes taxable capital gains arising from a subsection 104(4) deemed disposition only where the trust is one described in paragraph 104(4)(a) of the Act; i.e., a "spouse trust".

We trust that our comments are of assistance.

Yours truly,

DirectorFinancial Industries DivisionRulings Directorate