How is a SIFT trust's tax calculated

Every specified investment flow-through (SIFT) trust for a tax year is liable to a tax under Part 1 of the Income Tax Act, calculated as the total of the two following amounts: ^{Footnote 1}

1. 33% of its amount taxable for the tax year, and
2. the positive or negative amount determined by the following formula:

• A × B where
  • A is the positive or negative decimal fraction determined by the following formula:
    • C + D − E where
      • C is the net corporate income tax rate in respect of the SIFT trust for the tax year
      • D is the tax rate^{Footnote 2} for a SIFT trust for the tax year
      • E is the decimal fraction equivalent of the percentage rate of tax provided in (a) for the tax year
  • B is the trust's taxable distributions for the tax year

Forms and publications

• Guide T4013, T3 Trust Guide
• Form T3RET, T3 Trust Income Tax and Information Return
• Schedule T3SCH11, Federal Income Tax

Government Partners

• Department of Finance Canada