In attribution rules, whose income are the interest and dividends on investments made by a minor child attributed to?

In the context of attribution rules under Canadian taxation law, the interest and dividends earned on investments made by a minor child are attributed to the parents. This means that although the investments are technically in the name of the child, the income generated from those investments is taxed in the hands of the parents, typically to prevent income splitting and tax avoidance strategies. This rule is in place to ensure that parents who have control over the funds cannot simply shift income to a minor child to take advantage of lower tax brackets.

This attribution rule is particularly relevant when considering the tax implications of savings and investment accounts opened for minor children. Therefore, parents need to be aware that while they may be managing assets for their children, the tax responsibilities for the income generated by those assets will still revert to them. Understanding this can help in planning and making informed decisions regarding family investments.