| 19(1) | File No. 3-2899 |
| A.B. Adler | |
| (613) 957-8962 |
January 26, 1990
Dear Sirs:
This is in reply to your letter dated January 22, 1989 in which you requested an advance income tax ruling on behalf of the 19(1)
We are unable to provide you with the requested ruling since as indicated in paragraph 3 of our Information Circular No. 70-6R such rulings are given only in respect of definite transactions that are contemplated. In your letter you requested our interpretation of a specific provision of the Income Tax Act ("Act") as it applies to the operation of the terms of an existing trust rather than to those of, for example, a proposed trust. Your deposit will be returned to you under separate cover.
However, we are prepared to provide you with our general comments. In the absence of an express provision in the trust document arising on the death of a taxpayer (or in his will) that provides for the separate establishment of a new trust in specified circumstances or of, for example, a court ordered variation of the terms of the trust document we would expect the existing testamentary trust to continue where the first life tenant thereunder dies, and a new life tenancy begins. In such circumstances the 21 year rule in subsection 104(4)(b) of the Act would continue to be applicable to the existing testamentary trust.
We trust that our comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate