A special income tax is computed at the top marginal rate and it is levied

   on specified income on an individual who is under 18 years of age at the end

   of a calendar year.  This is generally levied on the following types of income:

1) Taxable dividends from shares that are not listed on a prescribed Canadian

    or Foreign stock exchange (i.e., private company shares) and
    are received directly or indirectly through a trust or partnership;

2)  Shareholders’ benefits included in the minor’s income under section 15 of the Income Tax Act;

3)      Partnership or Trust Income that is derived from the provision of goods and services to a business that is carried on by:

    (a)  a person who is related to the minor; or

    (b)  a corporation that has a specified shareholder who is related to the minor; or

    (c)  a professional corporation that has a shareholder who is related to the minor.

The specified income is:

1)  Subject to tax at the highest marginal rate;

2)  Not eligible for any personal tax credits other than the dividend tax credit or  foreign tax credits;

3)  Not subject to other attribution rules.

This special tax does not apply to:

1)  Taxable dividends from shares that are listed on a prescribed stock exchange;

2)  Minors who have no parents who are residents in Canada at any time of the year;

3)  Income from property that was inherited by the minor from a parent;

4)  Income from employment or a personal services business that was carried on by a professional corporation.