①If a Resident becomes a beneficiary as prescribed in Article 13, paragraph (1) (Attribution of Trust Property Assets and Liabilities and of Proceeds and Expenses Attributable to Trust Property) (or becomes a person that is deemed to be a beneficiary as prescribed in paragraph (1) of that Article pursuant to the provisions of paragraph (2) of that Article; this excludes a beneficiary in liquidation proceedings; referred to as a "beneficiary or deemed beneficiary" in paragraph (4), item (i)) of a Trust Subject to Corporate Taxation (limited to a trust set forth in Article 2, item (xxix)-2, (b) (Definitions) of the Corporation Tax Act) and as a result, the Trust Subject to Corporate Taxation ceases to fall under the category of trust set forth in Article 2, item (xxix)-2, (b) of that Act (unless the Trust Subject to Corporate Taxation falls under a category of trust set forth in (a) or (c) of such item), the Resident is treated as having taken over the trust property assets and liabilities from the trust corporation (meaning a trust corporation prescribed in Article 6-3 (Application of This Act to Trust Corporations); the same applies in paragraph (3) and paragraph (4), item (i)) in the amounts prescribed by Cabinet Order based on the book value immediately preceding the time that the trust ceased to fall under such category (referred to as the "amount equivalent to the book value" in paragraph (3)), and the Resident's Income in Each Class for the year is calculated accordingly.

②If a Resident as referred to in the preceding paragraph is treated as having taken over assets and liabilities pursuant to the provisions of that paragraph, the amount of proceeds arising from the Resident having taken them over is not included in the gross revenue that is used to calculate the Income in Each Class for the year in which the day of the Resident's taking over of those assets and liabilities falls.

③In the case referred to in paragraph (1), if the Trust Subject to Corporate Taxation referred to in that paragraph is a specified Trust Subject to Corporate Taxation, then with regard to the specified shares belonging to the trust property of its trust corporation, notwithstanding the provisions of the preceding two paragraphs, the Resident referred to in paragraph (1) is deemed to have acquired the specified shares for their value at the time the trust ceased to fall under the category as prescribed in paragraph (1) (or, if that value is less than the amount equivalent to the book value, for the amount equivalent to the book value), and the Resident's Income in Each Class for the year is calculated accordingly; and the amount equivalent to the book value of the specified shares is not included in the gross revenue used to calculate the Resident's Income in Each Class for the year that includes the day of that acquisition.

④In the preceding paragraph and this paragraph, the meanings of the terms set forth in the following items are as prescribed in those items:

⑤If the settlor (limited to a Resident; hereinafter the same applies in this paragraph) of a trust (other than a group investment trust, retirement pension trust, or a Trust Subject to Corporate Taxation as prescribed in the proviso of Article 13, paragraph (1); hereinafter the same applies in this Article) places the assets thereof in trust and the person (but only a corporation; hereinafter the same applies in this paragraph) becoming the beneficiary or deemed beneficiary of the trust becomes the beneficiary or deemed beneficiary without paying a proper consideration, the assets to which the rights under the trust pertain are treated as being transferred from the settlor of the trust to the person becoming the beneficiary or deemed beneficiary of the trust as a gift (or as a transfer for the amount of any consideration that the person that will become the beneficiary or deemed beneficiary pays) at the time that the settlor places the assets into trust, and the settlor's Income in Each Class for the year is calculated accordingly.

⑥If a trust comes to be in the position of having a new beneficiary or deemed beneficiary (other than if the provisions of the preceding paragraph or paragraph (8) apply); if the person (but only a corporation; hereinafter the same applies in this paragraph) becoming the new beneficiary or deemed beneficiary of the trust becomes the beneficiary or deemed beneficiary without paying a proper consideration; and if the former beneficiary or deemed beneficiary of the trust is a Resident, the assets to which the rights under the trust pertain are treated as being transferred from the former beneficiary or deemed beneficiary of the trust to the person becoming the new beneficiary or deemed beneficiary of the trust as a gift (or as a transfer for the amount of any consideration that the person becoming the beneficiary or deemed beneficiary pays) at the time the trust comes to be in the position of having a new beneficiary or deemed beneficiary, and the Income in Each Class for the year is calculated accordingly for the former beneficiary or deemed beneficiary.

⑦If a partial beneficiary or deemed beneficiary of a trust ceases to exist; if a person (but only a corporation; hereinafter the same applies in this paragraph) that is already a beneficiary or deemed beneficiary of the trust newly receives a profit from rights under the trust without paying a proper consideration; and if the former partial beneficiary or deemed beneficiary of the trust is a Resident, the assets to which the rights under the trust pertain are treated as being transferred from the former partial beneficiary or deemed beneficiary of the trust to the person receiving the profit, as a gift (or as a transfer for the amount of any consideration that the person receiving the profit pays), at the time that the partial beneficiary or deemed beneficiary of the trust ceases to exist, and the Income in Each Class for the year is calculated accordingly for the former partial beneficiary or deemed beneficiary of the trust.

⑧If a trust is terminated; if a person (but only a corporation; hereinafter the same applies in this paragraph) that is to benefit from the residual assets of the trust or in which they are to vest becomes the person to benefit from the residual assets of the trust or the person in which they are to vest without paying a proper consideration; and if a person that was a beneficiary or deemed beneficiary of the trust immediately prior to its termination is a Resident, the residual assets of the trust are treated as being transferred from the former beneficiary or deemed beneficiary to the person that is to benefit from the residual assets, or in which they are to vest, as a gift (or as a transfer for the amount of any consideration that the person that is to benefit from the residual assets or in which they are to vest pays), at the time that the person becomes entitled to benefit from the residual assets or to have them vest therein, and the former beneficiary or deemed beneficiary of the trust's Income in Each Class for the year is calculated accordingly.

⑨A beneficiary or deemed beneficiary as prescribed in paragraph (5) to the preceding paragraph means a beneficiary as prescribed in Article 13, paragraph (1) (or a person deemed to be a beneficiary as prescribed in paragraph (1) of that Article pursuant to the provisions of paragraph (2) of that Article).

⑩If the settlor (limited to a Resident; hereinafter the same applies in this paragraph) of a public interest trust places assets that the settlor holds in trust, the assets are treated as being transferred from the settlor of the public interest trust to the trustee of the public interest trust as a gift (or, if the public interest trust was created by the method set forth in Article 3, item (ii) (Methods of Trust) of the Trust Act (Act No. 108 of 2006), as a legacy) at the time that the settlor places the assets in trust, and the Income in Each Class for the year of the settlor of the public interest trust is calculated accordingly.

⑪Cabinet Order provides for the calculation of income if there is any amount of loss caused by the taking over of trust property assets and liabilities as under the provisions of paragraph (1), for the application of paragraph (5) if the rights under a trust which are prescribed in that paragraph are not all of the rights under that trust, and for other necessary particulars concerning the application of the provisions of paragraphs (1) through (8).