(iii) where applicable, the day determined under paragraph (a) or (a.1) as those paragraphs applied from time to time after 1971; and
	(3) The portion of subsection 104(5.3) of the Act before paragraph (b) is replaced by the following:
Election	(5.3) Where a trust files an election under this subsection in prescribed form with the Minister within 6 months after the end of a taxation year of the trust that includes a day before 1999 (in this subsection referred to as the ``disposition day'') that would, but for this subsection, be determined in respect of the trust under paragraph (4)(a.1) in the case of a trust described in that paragraph, or under paragraph (4)(b) in any other case, and there is an exempt beneficiary under the trust on the disposition day,
	(a) for the purposes of subsections (4) to (5.2), paragraph (6)(b) and subsection 159(6.1), the day determined under paragraph (4)(a.1) or (b), as the case may be, in respect of the trust is deemed to be the earlier of
	(i) January 1, 1999, and
	(ii) the first day of the trust's first taxation year that begins after the first day after the disposition day throughout which there is no exempt beneficiary under the trust;
	(4) Subsection 104(5.3) of the Act is amended by adding the following after paragraph (b):
	(b.1) where the trust filed the form before March 1995, paragraph (b) does not apply to distributions made by the trust after February 1995;
	(5) Section 104 of the Act is amended by adding the following after subsection (5.3):
Revocation of election	(5.31) Where a trust that has filed an election under subsection (5.3) before July 1995 applies before 1997 to the Minister in writing for permission to revoke the election and the Minister grants permission to revoke the election,
	(a) the election is deemed, otherwise than for the purposes of this subsection, never to have been made;
	(b) the trust is not liable to any penalty under this Act to the extent that the liability would, but for this paragraph, have increased because of the revocation of the election; and
	(c) notwithstanding subsections 152(4) to (5), such assessments of tax, interest and penalties under this Act shall be made as are necessary to take into account the consequences of the revocation of the election.
	(6) Paragraph 104(6)(b) of the Act is amended by adding the word ``and'' at the end of subparagraph (ii) and by adding the following after subparagraph (ii):
	(iii) where the trust is described in paragraph (4)(a) and the spouse referred to in paragraph (4)(a) in respect of the trust died on a day in the year, the part of the amount that, but for
	(A) this subsection, and
	(B) subsections (12) and 107(4)
	would be the part of its income for the year that became payable in the year to a beneficiary (other than the spouse) and as is attributable to one or more dispositions by the trust before the end of that day of capital properties (other than excluded properties), land described in an inventory of the trust, Canadian resource properties or foreign resource properties.
	(7) Subsection 104(12) of the Act is replaced by the following:
Deduction of amounts included in preferred beneficiaries' incomes	(12) There may be deducted in computing the income of a trust for a taxation year the lesser of
	(a) the total of all amounts designated under subsection (14) by the trust in respect of the year, and
	(b) the accumulating income of the trust for the year.
	(8) Subsection 104(14) of the Act is replaced by the following:
Election by trust and preferred beneficiary	(14) Where a trust and a preferred beneficiary under the trust for a particular taxation year of the trust jointly so elect in respect of the particular year in prescribed manner, such part of the accumulating income of the trust for the particular year as is designated in the election, not exceeding the allocable amount for the preferred beneficiary in respect of the trust for the particular year, shall be included in computing the income of the preferred beneficiary for the beneficiary's taxation year in which the particular year ended and shall not be included in computing the income of any beneficiary of the trust for a subsequent taxation year.
	(9) Subsection 104(15) of the Act is replaced by the following:
Allocable amount for preferred beneficiary	(15) For the purpose of subsection (14), the allocable amount for a preferred beneficiary under a trust in respect of the trust for a taxation year is
	(a) where the trust is a trust described in the definition ``pre-1972 spousal trust'' in subsection 108(1) at the end of the year or a trust described in paragraph (4)(a) and the taxpayer's spouse referred to in that definition or paragraph is alive at the end of the year, an amount equal to
	(i) if the beneficiary is that spouse, the trust's accumulating income for the year, and
	(ii) in any other case, nil;
	(b) where paragraph (a) does not apply and the beneficiary's interest in the trust is not solely contingent on the death of another beneficiary who has a capital interest in the trust and who does not have an income interest in the trust, the trust's accumulating income for the year; and
	(c) in any other case, nil.
	(10) Subsection 104(18) of the Act is replaced by the following:
Trust for minor	(18) Where any part of the amount that, but for subsections (6) and (12), would be the income of a trust for a taxation year throughout which it was resident in Canada
	(a) has not become payable in the year,
	(b) was held in trust for an individual who did not attain 21 years of age before the end of the year,
	(c) the right to which vested at or before the end of the year otherwise than because of the exercise by any person of, or the failure of any person to exercise, any discretionary power, and
	(d) the right to which is not subject to any future condition (other than a condition that the individual survive to an age not exceeding 40 years),
	notwithstanding subsection (24), that part of the amount is, for the purposes of subsections (6) and (13), deemed to have become payable to the individual in the year.
	(11) Paragraph 104(23)(a) of the Act is replaced by the following:
	(a) the taxation year of the trust is the period for which the accounts of the trust are made up for purposes of assessment under this Act, but no such period may exceed 12 months and no change in the time when such a period ends may be made for the purposes of this Act without the concurrence of the Minister;
	(12) Subsections (1) and (2) apply to trust taxation years that end after February 11, 1991.
	(13) Subsections (3) and (4) apply after February 11, 1991.
	(14) Subsection (6) applies to trust taxation years that end after July 19, 1995.
	(15) Subsections (7) to (10) apply to trust taxation years that begin after 1995.
	(16) Subsection (11) applies after 1994.
	19. (1) The definition ``accumulating income'' in subsection 108(1) of the Act is replaced by the following:
``accumula- ting income'' « revenu accumulé »	``accumulating income'' of a trust for a taxation year means the amount that would be the income of the trust for the year if that amount were
	(a) computed without reference to subsections 104(5.1) and (12),
	(b) computed as if the greatest amount that the trust was entitled to claim under subsection 104(6) in computing its income for the year were so claimed,
	(c) where the trust
	(i) is a pre-1972 spousal trust at the end of the year,
	(ii) is described in paragraph 104(4)(a), or
	(iii) elected under subsection 104(5.3) for a preceding taxation year,
	computed without reference to subsections 104(4), (5) and (5.2) and 107(4),
	(d) where the trust is described in paragraph 104(4)(a) and the taxpayer's spouse referred to in that paragraph died on a day in that year, computed as if any disposition by the trust before the end of that day of capital property, land described in an inventory of the trust, Canadian resource property or foreign resource property had not occurred, and
	(e) computed without reference to subsection 12(10.2), except to the extent that that subsection applies to amounts paid to a trust to which paragraph 70(6.1)(b) applies and before the death of the spouse referred to in that paragraph;
	(2) The definition ``preferred beneficiary'' in subsection 108(1) of the Act is replaced by the following:
``preferred beneficiary'' « bénéfi- ciaire privilégié »	``preferred beneficiary'' under a trust for a particular taxation year of the trust means an individual
	(a) who is resident in Canada and a beneficiary under the trust at the end of the particular year,
	(b) in respect of whom paragraphs 118.3(1)(a) to (b) apply for the individual's taxation year in which the particular year ends, and
	(c) who is
	(i) the settlor of the trust,
	(ii) the spouse or former spouse of the settlor of the trust, or
	(iii) a child, grandchild or great grandchild of the settlor of the trust, or the spouse of any such person;
	(3) Subsection (1) applies to trust taxation years that end after July 19, 1995.
	(4) Subsection (2) applies to trust taxation years that begin after 1995.
	20. (1) Subsection 110.1(1) of the Act is amended by striking out the word ``and'' at the end of paragraph (b), by adding the word ``and'' at the end of paragraph (c), and by adding the following after paragraph (c):
Ecological gifts	(d) the total of all amounts each of which is the fair market value of a gift (other than a gift in respect of which an amount is or was deducted under paragraph (a), (b) or (c)) of land, including a servitude for the use and benefit of a dominant land, a covenant or an easement, that is certified by the Minister of the Environment, or a person designated by that Minister, to be ecologically sensitive land, the conservation and protection of which is, in the opinion of that Minister, or that person, important to the preservation of Canada's environmental heritage, which gift was made by the corporation in the year (or in any of the 5 immediately preceding taxation years to the extent that the amount was not deducted in computing its taxable income for any preceding taxation year) to
	(i) a Canadian municipality, or
	(ii) a registered charity one of the main purposes of which is, in the opinion of the Minister of the Environment, the conservation and protection of Canada's environmental heritage, and that is approved by that Minister, or that person, in respect of that gift,
	and not exceeding the amount remaining, if any, after the amounts deducted for the year under paragraphs (a), (b) and (c) are deducted in computing the corporation's taxable income for the year.
	(2) Subparagraph 110.1(3)(a)(i) of the Act is replaced by the following:
	(i) capital property to a donee described in paragraph (1)(a), (b) or (d), or
	(3) Subsections (1) and (2) apply to gifts made after February 27, 1995.
	21. (1) Subparagraph 110.6(24)(a)(i) of the Act is replaced by the following:
	(i) if the election is in respect of a business of the elector, on or before the individual's filing-due date for the taxation year in which the fiscal period of the business that includes February 22, 1994 ends, and
	(2) Subsection (1) applies to the 1995 and subsequent taxation years.
	22. (1) Paragraph 117.1(1)(b) of the Act is replaced by the following:
	(b) the amounts expressed in dollars in subsection 117(2), paragraphs (c) and (d) of the description of B in subsection 118(1), subsections 118(2), 118.2(1) and 118.3(1) and Part I.2
	(2) Subsection (1) applies to the 1996 and subsequent taxation years.
	23. (1) The portion of the definition ``total charitable gifts'' in subsection 118.1(1) of the Act before paragraph (a) is replaced by the following:
``total charitable gifts'' « total des dons de bienfaisan- ce »	``total charitable gifts'' of an individual for a taxation year means the total of all amounts each of which is the fair market value of a gift (other than a gift the fair market value of which is included in the total Crown gifts, the total cultural gifts or the total ecological gifts of the individual for the year) made by the individual in the year or in any of the 5 immediately preceding taxation years (other than in a year for which a deduction under subsection 110(2) was claimed in computing the individual's taxable income) to
	(2) The portion of the definition ``total Crown gifts'' in subsection 118.1(1) of the Act before paragraph (a) is replaced by the following:
``total Crown gifts'' « total des dons à l'État »	``total Crown gifts'' of an individual for a taxation year means the total of all amounts each of which is the fair market value of a gift (other than a gift the fair market value of which is included in the total cultural gifts or the total ecological gifts of the individual for the year) made by the individual in the year or in any of the 5 immediately preceding taxation years to Her Majesty in right of Canada or a province, to the extent that those amounts were
	(3) The definition ``total gifts'' in subsection 118.1(1) of the Act is amended by striking out the word ``and'' at the end of paragraph (b), by adding the word ``and'' at the end of paragraph (c) and by adding the following after paragraph (c):