5-921209
24(1) Danielle Bouffard
(613) 957-8953Attention : 19(1) June 25, 1992 Dear Sir,
Objet: Proposed Subsection 104(5.5) of the
Income Tax Act ( "the Act" ) This is in reply to your letter dated April 14, 1992 wherein you requested the views of the Department with respect to the application of the above mentioned proposed subsection, included in the Draft Legislation issued, last December 1991, by the Minister of Finance.
It would appear that the subject matter of your letter relates to proposed transactions. You may wish to request an advance income tax ruling in accordance with the requirements set forth in the Department's Information Circular 70-6R2 dated September 28, 1990. We are prepared, however, to offer the following general comment.
We would agree with your interpretation that proposed sub- paragraph 104(5.5)(a)(ii) of the Act shoud not preclude an individual to be a beneficiary under a trust where the termination of his beneficiary's interest, without enjoyment by him of any benefit, would arise as a result of his death instead of the exercise of (or failure to exercise) a discretionary power granted to a person, for instance the trustee. The above comment is not binding on Revenue Canada in respect of a specific situation.
Yours truly For the Director Manufacturing Industries, Partnerships and Trusts Division Rulings Directorate Legislative and Intergovernmental Affairs Branch
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