Archived - Department of Finance Releases Legislative Proposals on the Tax Rules for Certain Trusts and Their Beneficiaries

January 15, 2016 – Ottawa, Ontario – Department of Finance

The Department of Finance today released for consultation draft legislative proposals that would modify the income tax treatment of certain trusts and their beneficiaries.

These proposals include:

• Clarifying what types of investment funds are excluded from the loss restriction event rules that otherwise limit a trust’s use of certain tax attributes (including losses).
• Allowing greater flexibility in the income tax rules for recognizing charitable donations made by an individual’s former graduated rate estate.
• Ensuring that income arising in certain trusts on the death of the trust’s primary beneficiary is taxed in the trust and not in the hands of that beneficiary, subject to a joint election for certain testamentary trusts to report the income in that beneficiary’s final tax return.

Interested parties are invited to provide comments on the draft legislative proposals by February 15, 2016. Please send your comments to fin.trusts-fiducies.fin@canada.ca or to:

Tax Policy Branch
Department of Finance
90 Elgin Street
Ottawa, Ontario
K1A 0G5

• Legislative Proposals Relating to Income Taxation of Certain Trusts and Estates and Explanatory Notes
• Backgrounder: Legislative Proposals Relating to Income Taxation of Certain Trusts and Estates

Daniel Lauzon
Director of Communications
Office of the Minister of Finance
613-286-4285

Jack Aubry
Media Relations
Department of Finance
613-369-4000