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Estate income is not payable to a legatee and not taxable in their hands until administration completes.
The appellant was the residuary legatee of her late husband's estate.
The Ministère du Revenu assessed her for investment income generated by the estate's assets during its first fiscal year, arguing the income was 'payable' to her under the Taxation Act.
The Supreme Court of Canada held that under the Civil Code of Lower Canada, the testamentary executor's seizin prevails over the legatee's seizin during the administration of the estate.
Consequently, the appellant was not entitled to demand payment of the income until the administration was complete, meaning the income was not payable to her and not taxable in her hands for that year.
A trustee appointed under the Special Corporate Powers Act is not subject to s. 14 of the Act respecting the Ministère du Revenu.
The appellant appealed a decision regarding whether a trustee appointed under the Special Corporate Powers Act is required to notify the Minister before realizing on security, pursuant to s. 14 of the Act respecting the Ministère du Revenu.
The Supreme Court of Canada dismissed the appeal, agreeing with the Quebec Court of Appeal that such a trustee is not one of the persons provided for in s. 14 as it was worded at the time of the notice of assessment.
