Preferred beneficiary

A preferred beneficiary is a person resident in Canada who is a beneficiary under the trust at the end of the year, and who meets one of the following conditions:

    •  he or she qualifies for the disability amount for the tax year that ends the trust’s tax year; or
    • he or she:
      • is 18 years or older before the end of the tax year;
      • is a dependant of another individual for the tax year because of a mental or physical impairment; and
      • has income for the tax year, not including income from a preferred beneficiary election, which does not exceed the dependant tax credit.

In addition, he or she must be one of the following:

    • the settlor of the trust;
    • the spouse or common-law partner, or former spouse or common-law partner, of the settlor of the trust;
    • a child, grandchild, or great-grandchild of the settlor of the trust; or
    • the spouse or common-law partner of a child, grandchild, or great-grandchild of the settlor of the trust