| Protected B when completed | |||||||||||||
| Specified investment flow-through (SIFT) trust income tax calculations | |||||||||||||
| SIFT trusts must provide the applicable information contained in the following charts below. Print this page and attach a completed copy to your T3 return. The trust must also answer the following 3 questions: |
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| 1. | Does the trust qualify as a Mutual Fund trust? | ||||||||||||
| 2. | Has the trust issued any new equity to replace debt that was existing on October 31, 2006? If so, provide details | ||||||||||||
| 3. | Has the trust issued new equity in satisfaction of the exercise by another person or partnership of a right in place on October 31, 2006 to exchange an interest in a partnership, or a share of a corporation, for that new equity? If so, provide details. |
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| Chart 1 – Taxable SIFT distributions | |||||||||||||
| Taxable income (line 43 of the T3 return) | Line A | ||||||||||||
| Non-deductible distribution amount | 473 • | ÷ | 1* | % | Line B | ||||||||
| Taxable SIFT trust distributions (line A or B, whichever is less) | 57 • | Line C | |||||||||||
| Note Ensure the non-deductible distributions amount that is deemed to be dividends received by the beneficiaries from a taxable Canadian corporation has been included in the allocation of dividends on T3 Schedule 9, but has not been deducted at line 28 of the T3 return. |
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| Chart 2 – SIFT trust tax calculation | |||||||||||||
| Taxable income (line A, Chart 1) | x | 33 | % | Line A | |||||||||
| Taxable SIFT trust distributions (Line C, Chart 1) | x | 2* | % | Line B | |||||||||
| Tax payable by SIFT trust (line A plus line B) | 11080• | Line C | |||||||||||
| Chart 3 – Provincial or territorial taxable income | |||||||||||||
| Taxable income (line A, Chart 1) | Line A | ||||||||||||
| Taxable SIFT trust distributions (Line C, Chart 1) | – | Line B | |||||||||||
| Provincial or territorial taxable income (line A minus line B) | 58 • | = | Line C | ||||||||||
| Enter the amount from line C on line 1 of the trust's T3 provincial or territorial tax form. | |||||||||||||
| Chart 4 – Adjusted net income | |||||||||||||
| Net Income (from line 32 of the T3 return) | Line A | ||||||||||||
| Taxable SIFT trust distributions (line C, Chart 1) | – | Line B | |||||||||||
| Adjusted net income (line A minus line B) | = | Line C | |||||||||||
| Use the amount from line C in the place of net income when applicable for calculating the following amounts: | |||||||||||||
| • | foreign tax credits on Form T3PFT, T3 Provincial or Territorial Foreign Tax Credit | ||||||||||||
| • | capital gains refunds on Form T184, Capital Gains Refund for a Mutual Fund Trust | ||||||||||||
| • | net income allocations to multiple jurisdictions on Form T3MJ, Provincial and Territorial Taxes - Multiple Jurisdictions. When calculating the refundable Quebec abatement on Form T3MJ, use the trust's net income |
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| Chart 5 – Adjusting the gross-up amount of eligible dividends kept or not designated by a SIFT trust | |||||||||||||
| Enter the amount from Line 949, Part A, of T3 Schedule 9 | Line A | ||||||||||||
| The designated amount of taxable dividends deemed to have been an eligible dividend received by a beneficiary of | |||||||||||||
| a SIFT trust. (field 473, Chart 1) | – | Line B | |||||||||||
| Line A minus line B | 8241 • | = | Line C | ||||||||||
| Enter this amount on line 19 of T3 Schedule 8 | |||||||||||||
| Protected B when completed | |||||||||||||
| Chart 6 – Refundable Quebec abatement | |||||||||||||
| Net provincial income (line 32 of the T3 return minus line B of Chart 3) | Line 1 | ||||||||||||
| Total net income (line 32 of the T3 return) | Line 2 | ||||||||||||
| Line 1 divided by line 2 | = | Line 3 | |||||||||||
| Enter the amount from line 20 of T3 Schedule 11 or, | |||||||||||||
| if the trust is subject to minimum tax, the amount from line 51 of T3 Schedule 12 | Line 4 | ||||||||||||
| Enter the amount from line 3 | x | Line 5 | |||||||||||
| Multiply line 4 by line 5 | = | Line 6 | |||||||||||
| Rate for refundable Quebec abatement | x 16.5% = | Line 7 | |||||||||||
| Refundable Quebec abatement (multiply line 6 by line 7) | = | Line 8 | |||||||||||
| Enter the amount from line 8 on line 50 of the T3 return | |||||||||||||
| Note If the trust has income in multiple jurisdictions, calculate any refundable Quebec abatement for the trust on Form T3MJ, Provincial and Territorial Taxes – Multiple Jurisdictions. |
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| Footnotes | |||||||||||||
| 1. | Enter the rate determined by the following formula: 1 minus (net corporate income tax rate + provincial or territorial SIFT tax part) The amount on line 29 of the T3 return must be equal to or greater than the non-deductible distributions amount. |
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| 2. | Enter the amount determined by the following formula: net corporate income tax rate + provincial or territorial SIFT tax part - 33% Enter the amount from line C on line 9 of T3SCH11, Federal Income Tax |
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| 3. | Enter the appropriate provincial or territorial SIFT tax part. The amount from line D is included in line C; this amount is calculated for statistical purposes only. Do not enter it on the T3 return or schedules |
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| Fore SIFT calcaulation related tax rates and more information about the calcautions, please visit Specified investment flow-through (SIFT) trust income tax calculations | |||||||||||||