Anti-avoidance provisions exist to combat the use of trusts for income splitting and tax avoidance schemes. These provisions will normally be applicable where income accrues to a person other than the donor as a result of a donation, settlement or other disposition made (i.e. interest free loans). These provisions may apply where income accrues to the following persons:

• The donor’s spouse
• A minor child of the donor
• The trust to whom the donation, settlement or other disposition has been made
• Non-residents

The result of the anti-avoidance provisions are that the income that accrues to the person’s mentioned above are deemed to be the income of the donor.