Miller v. The King

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REVENUE .......................

*May 5. *June AND

THE ROYAL TRUST

COMPANY,

TRUSTEE UNDER A DEED OF DONATION

RESPONDENT. IN TRUST FROM JOHN DAY JACKSON.

ON APPEAL FROM THE EXCHEQUER J., resident in the United States, by deed executed in the province of Quebec, gave to respondent, a company incorporated under the law. of Quebec and carrying on business in Canada, in trust, as a donation inter vivos and irrevocable, certain Canadian securities, to be held, together with all accumulations and additions thereto, upon trust for the benefit of J.'s surviving children until five years after J.'s death, " when the entire trust estate is to be equally divided amongst his surviving children, and in the event of any or all of his said children predeceasing [J.1 or being unable to take, the division shall be made to the survivor or survivors, and the issue of such predeceased child or children, as representing their parent, per stirpes." The Crown claimed from respondent an income tax under the Dominion Income War Tax Act, 1917, c. 28 (as amended), on the income received by respondent, as trustee under the said deed, for the year 1927. J. and his wife were alive, and had eight children living, all minors and re siding with J. in the United States. The trust fund was invested in Canadian stocks and bonds, held by respondent in Montreal, Canada, where the income was accumulating and being invested in Canadian stocks and bonds.

Held (reversing judgment of Audette J. in the Exchequer Court, [1930] Ex. C.R. 172): The income was " accumulating in trust for the benefit of unascertained persons, or of persons with contingent interests," and taxable in respondent's hands, under s. 3 (6) of said Act (as enacted 1920, c. 49, s. 4). Such income accumulating in trust is distinctly a subject of taxation under s. 3 (6), regardless of the residence, if ascertainable, of probable beneficiaries, whose interest is contingent during the taxation period.

The above holding accords with the decision of this Court in McLeod v. Minister of Customs and Excise, [1926] Can. S.C.R. 457, which, having affirmed the judgment below on an equal division of opinion may not be binding as an authority on this Court (Stanstead Election case, 20 Can. S.C.R. 12), but is entitled to great respect.

*PRESENT:-Anglin CJ.C. and Newcombe, Rinfret, Lament and Cannon JJ.