BUSI 4005 Chapter Notes - Chapter 18: Legal Personality, Settlor, Alter Ego
19 May 2018
School
Department
Course
Professor
Trust
- 1 people bound to deal with property over he/she has for benefit of person may
enforce obligation
- Settlor: transfer property to trust
- Trustee: admin and legally own trust property
- Beneficiary: benefit from trust held
1. Overview
a. No contract/ separate legal entity in private law
b. Separate person for tax purpose
c. Deemed to be an individual
d. Subject to direct income tax
e. Act as conduit
f. Net income trust = similar to individual
g. Tax payable based on trust net income
2. Type
a. Intervivos- settlor is still alive
b. Testamentary – settlor is dead
c. Graduated real estate
i. Estate arise due to 1 death
ii. Up to 36 months after death
iii. Need to designate estate as CRE
iv. Same tax rate as individual
d. Discretionary
e. Non discretionary
f. personal
g. Commercial
h. Spousal
i. Testamentary
ii. Entitle to receive total income of trust before spouse death
iii. No one else receive it
iv. Must reside in Canada during transfer
v. Transfer at proceed = tax cost
vi. If no election, proceed = FMV
i. Alter ego
i. Establish trust for themselves
ii. Organize own financial affairs
iii. Only tax payer receive total income of trust before death
iv. Individual more than 65 years old
v. No avoid deemed disposition on death
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