Saddam Holt transfers a number of capital assets to a trust in favour of his spouse, Lena Holt. She is the only income or capital beneficiary of the trust. Which of the following statements with respect to this trust is NOT correct?

Question

Quizplus · Accepted Answer

Explanation: In the context of spousal trusts, capital gains that are retained within the trust are not attributed back to the contributor (in this case, Mr. Holt). This means that if the trust sells a capital asset and realizes a gain, this gain is taxed in the trust and not attributed back to Mr. Holt. The other statements are correct regarding the taxation of income and attribution rules for spousal trusts.

Saddam Holt Transfers a Number of Capital Assets to a Trust