Pharmacy U

How do In-Trust For accounts work, and why should you care?


by Mike Jaczko and Max Beairsto



Many small business owners, including independent pharmacy owners, continue to utilize “In-Trust For accounts” or ITFs to help save money for their children, for a number of reasons. This article highlights the main features associated ITFs.

An ITF is an investment account that resides at a financial institution that a parent or grandparent (the trustee) has established for a minor child (the beneficiary). Once established, the ultimate owner of the funds is the minor child while the account is established in the name of the adult.

While the adult makes the investment decisions, there is a legal responsibility to make withdrawals for the benefit of the beneficiary and not for other purposes. Once the minor child reaches the age of majority in their respective province, they become legally entitled to take control of the account along with the original trustee. The trustee eventually transfers control of the account to the beneficiary. Some parents may view this as a shortcoming as adults will not be able to prevent their child from eventually gaining access to the money (see Saunder v. Vautier).

Note that there is no limit on how much can be contributed to the account. As the ITF earns income and grows in value, the capital gains associated with the account can be taxed in the hands of the child, BUT any interest and dividend income will be unfortunately attributed back to the parent.

An interesting wrinkle is if the funds in the ITF originated solely from the Canada child benefit or an inheritance from a deceased adult, ALL of the income in the account is taxed in the hands of the child.

To learn more about ITFs, contact Mike Jaczko at



Mike Jaczko, BSc. Phm, RPh, CIM®, FEA a pharmacist by background, is a portfolio manager, partner and member of KJ Harrison Investors, a Toronto-based private investment management firm servicing individuals and families across Canada. For more information on this topic, email

Max Beairsto, B.Sc. Pharm., MBA, CVA is an intermediary and valuation analyst with EVCOR (Enterprise Valuators Corporation), a Canadian business advisory firm that focuses on valuations and the sale of healthcare-related companies. You can reach him at