| 19(1) | File No. 5-9417 |
| Maureen Shea-DesRosierss | |
| (613) 957-8953 |
February 5, 1990
Dear Sirs:
Re: Subsection 104(21) of the Income Tax Act (the "Act")
This is in reply to your letter of January 17, 1990 concerning the above-mentioned subject.
You enquire as to whether it is possible under subsection 104(21) of the Act to designate a portion of the trust's net taxable capital gains to persons who were beneficiaries at any time during the taxation year or must net taxable capital gains only be designated to beneficiaries who are beneficiaries of the trust at the end of the year.
Assuming that the trust indenture permitted such a designation and the provisions of subsection 104(21) of the Act were otherwise met, we would expect that a trust could designate a portion of its realized net taxable capital gains to persons who were beneficiaries at the time the gains were realized notwithstanding that such persons were not beneficiaries at the end of the taxation year in which the gains were realized.
We trust the above comments will be of assistance to you.
Yours truly,
for DirectorFinancial Industries DivisionRulings Directorate