Administrative Policy
30 July 2015 T.I. 2015-0596841E5 - Definition of personal trust
Each of the beneficiaries of an inter vivos trust ("Trust") which is not a unit trust will make an additional contribution of capital to Trust in proportion to their respective fixed entitlements to a percentage of trust capital and income. There is no agreement among then (nor any requirement under the trust deed) respecting additional capital contributions. Does CRA agree that the additional contributions would not constitute consideration payable for a beneficial interest in the Trust? CRA stated:
[W]e are unable to confirm… that the additional contributions of capital by the beneficiaries… should not disqualify the trust as a personal trust.
30 April 2003 T.I. 2002-015604
The assumption of debt of a trust by the beneficiary would not be considered to entail an acquisition of the beneficial interest in the trust for consideration payable to the trust and, accordingly, would not by itself cause the trust to lose its status as a personal trust.