Income Tax Act

Marginal note:Amateur athletes’ reserve funds

• 143.1 (1) Where a national sport organization that is a registered Canadian amateur athletic association receives an amount for the benefit of an individual under an arrangement made under rules of an international sport federation that require amounts to be held, controlled and administered by the organization in order to preserve the eligibility of the individual to compete in a sporting event sanctioned by the federation,

  • (a) an inter vivos trust (in this section referred to as an “amateur athlete trust”) shall be deemed to be created on the day that is the later of

    • (i) the day on which the first such amount is received by the organization, and

    • (ii) January 1, 1992,

    and to exist continuously thereafter until subsection 143.1(3) or (4) applies in respect of the trust;

  • (b) all property required to be held after 1991 under the arrangement shall be deemed to be property of the trust and not property of any other person;

  • (c) any amount received at any time under the arrangement by the organization shall, to the extent that it would, but for this subsection, be included in computing the individual’s income for the taxation year that includes that time, be deemed to be income of the trust for the taxation year and not to be income of the individual;

  • (d) all amounts paid at any time by the organization under the arrangement to or for the benefit of the individual shall be deemed to be amounts distributed at that time to the individual by the trust;

  • (e) the individual shall be deemed to be the beneficiary under the trust;

  • (f) the organization shall be deemed to be the trustee of the trust; and

  • (g) no tax is payable under this Part by the trust on its taxable income for any taxation year.

• Marginal note:Amounts included in beneficiary’s income

  (2) In computing the income for a taxation year of the beneficiary under an amateur athlete trust, there shall be included the total of all amounts distributed in the year to the beneficiary by the trust.

• Marginal note:Termination of amateur athlete trust

  (3) Where an amateur athlete trust holds property on behalf of a beneficiary who has not competed in an international sporting event as a Canadian national team member for a period of 8 years that ends in a particular taxation year and that begins in the year that is the later of

  • (a) where the beneficiary has competed in such an event, the year in which the beneficiary last so competed, and

  • (b) the year in which the trust was created,

  the trust shall be deemed to have distributed, at the end of the particular taxation year to the beneficiary, an amount equal to

  • (c) where the trust is liable to pay tax under Part XII.2 in respect of the particular year, 64% of the fair market value of all property held by it at that time, and

  • (d) in any other case, the fair market value of all property held by it at that time.

• Marginal note:Death of beneficiary

  (4) Where an amateur athlete trust holds property on behalf of a beneficiary who dies in a year, the trust shall be deemed to have distributed, immediately before the death, to the beneficiary, an amount equal to

  • (a) where the trust is liable to pay tax under Part XII.2 in respect of the year, 64% of the fair market value of all property held by it at that time; and

  • (b) in any other case, the fair market value of all property held by it at that time.