An individual resident in Canada who is a beneficiary of a trust at the end of the year and meets one of the two following conditions:

• The beneficiary qualifies for the tax credit for a severe and prolonged impairment in mental or physical functions for the taxation year that ends in the trust's taxation year.
• The beneficiary:
  • is 18 years old before the end of the taxation year and was an individual's dependant during the year because of an impairment in mental or physical functions; and
  • has income for the taxation year (not including income from a preferred beneficiary election) that does not exceed the federal dependent tax credit, in accordance with section 108 of the Income Tax Act.

The beneficiary must also be:

• the settlor of the trust;
• the spouse or the former spouse of the settlor of the trust; or
• the child, grandchild or great-grandchild of the settlor or of the settlor's spouse or former spouse.