8 June 2010 STEP Roundtable Q. 2, 2010-0363071C6 -- summary under Effective Date

For an amount to be "payable" to a beneficiary in a trust's taxation year, the beneficiary must have an enforceable right to payment by the end of that year. It is possible for the beneficiary to obtain a right to payment of an unknown amount if the amount is unknown because of administrative delays, but not if it depends on a subsequent contingency or event.

The beneficiary must also be advised before the end of the trust's taxation year of the trustees' decision to pay and the basis on which payment is to be apportioned. Where the amount is known, ordinarily a demand promissory note will be given to the beneficiary (or the beneficiary's legal guardian) as acknowledgement of the existence of the debt. The note should be delivered in the trust's taxation year or as soon as possible (i.e. in the event of the aforementioned administrative delays).

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