Yes it should be on a T3 TRust return. It can only go on the beneficiary if there is NO other income to be claim in the estate. weigh the cost of doing the T3 with the differential of tax brackets to see if it is worth putting on T3 if it is the only income.
If it is close i would do the T3 or later in the year Matching will run you around for a bit sorting out where it was claimed. At that time it is visually not great PR to tell the client you need to bill for CRA inquiries.
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