5 October 2012 Roundtable, 2012-0453941C6 F - Principal residence owned by a trust-exemption -- summary under Paragraph (c.1)

Who are the specified beneficiaries in the following situations?

Situation 1. A principal residence is held by a personal trust whose beneficiaries are the parents and their children. The parents live in the residence and the children each have a different principal residence.

Situation 2. Same situation as above, but this time only one of the children lives in the residence.

Situation 3. A principal residence is held by a personal trust whose sole beneficiaries are the children. One of the children lives in the residence. The parents have a different principal residence, as do the other children.

CRA indicated that if the only persons beneficially interested (as defined in s. 248(25)) in the trust are those listed in the above descriptions the specified beneficiaries would be:

  • in Situation 1, the parents.
  • in Situation 2, the parents and the child who ordinarily inhabited the residence.
  • in Situation 3, the child who ordinarily inhabited the residence.
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Income Tax Act - s. 54 - Principal Residence - (c.1)
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