Toronto General Trusts Corporation v. City of Ottawa

Toronto General Trusts Corporation v. City of Ottawa

The Court held that the exemption in s.4(22) applies to income 'derived' (beneficially received) by persons assessable directly and does not extend to income merely 'received' in Ontario by executors or trustees on behalf of non-resident beneficiaries; therefore the Trusts Corporation is not a 'person' within 'all other persons' for the purposes of the exemption and is not entitled to it.

Citation
[1935] SCR 531
Parties
Appellant; Executor/trustee (representative Capacity): Toronto General Trusts Corporation; Respondent; Municipality: The Corporation of the City of Ottawa
Court
Supreme Court of Canada
Jurisdiction
Canada
Judgment Date
1 October 1935
Procedural Posture
Taxation Income Tax Assessment / Appeal to Supreme Court of Canada From Court of Appeal for Ontario on a Special Case Stated Under S.84 of the Assessment Act
Outcome
Appeal dismissed with costs
Legal Topics
Income Tax Exemption, Assessment of Trustees for Non Resident Beneficiaries, Interpretation of 'income Derived' Vs 'income Received', Scope of Assessment Act S.4(22) and S.13(1)
Source Language
English
Taxation Statutory Interpretation Trusts and Estates Income Tax Exemption Assessment of Trustees for Non Resident Beneficiaries Interpretation of 'income Derived' Vs 'income Received' Scope of Assessment Act S.4(22) and S.13(1)

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Parties

Toronto General Trusts Corporation

Appellant; Executor/trustee (representative Capacity)

The Corporation of the City of Ottawa

Respondent; Municipality

Procedural Posture

Taxation Income Tax Assessment / Appeal to Supreme Court of Canada From Court of Appeal for Ontario on a Special Case Stated Under S.84 of the Assessment Act

Legal Issues

  1. 1 Whether an executor/trustee assessed for income received on behalf of non-resident beneficiaries is a 'person' within s.4(22) 'all other persons' and entitled to the $1,500 exemption per beneficiary
  2. 2 Whether the exemption in s.4(22) applies to income 'received' by trustees on behalf of non-residents or only to income 'derived' (beneficially received) by a person
  3. 3 Proper construction of Assessment Act language and historical legislative context

Ratio Decidendi

The Court held that the exemption in s.4(22) applies to income 'derived' (beneficially received) by persons assessable directly and does not extend to income merely 'received' in Ontario by executors or trustees on behalf of non-resident beneficiaries; therefore the Trusts Corporation is not a 'person' within 'all other persons' for the purposes of the exemption and is not entitled to it.

Court Disposition

Appeal dismissed with costs

Orders

  • Appeal dismissed with costs