kmlmtz66/iStock/Thinkstock
Implications of the new rules
To illustrate the effect of some of these changes, consider an example
where an individual (“John Doe”) dies holding the following:
• n RRIF worth $500,000, with a charity designated as a
A
beneficiary;
• 50,000 in shares of a public company (“ABC Co.”), with an
$
adjusted cost base of nil, to be donated to charity;
• 1,000,000 in shares of a wholly owned private holding company
$
(“XYZ Co.”). The adjusted cost base and paid-up capital of these
shares is nil; and
• n alter-ego trust (AET) with his children named as
A
beneficiaries. This AET holds all of his other assets, some of
which have accrued capital gains.
The GRE
As John’s will creates only one estate, this estate would be designated
as the GRE.
The RRIF
The gift of publicly listed securities
The gift of the $500,000 RRIF is deemed to have been made by the
Here again, the executor has the flexibility of choosing whether to claim
GRE, and John’s executor has the flexibility to choose whether to
the $50,000 gift on John’s terminal return, on his prior-year return, or
claim the gift on John’s terminal return, on his prior-year return, or
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on his GRE’s return.
on his GRE’s return.
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