20 November 2000 Ministerial Correspondence 2000-0049904 - Taxation of TCP of Trust on Leaving Canada

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

NOV 20, 2000

XXXXXXXXXX

Dear XXXXXXXXXX:

The Honourable Martin Cauchon, Minister of National Revenue, has asked me to reply to your correspondence concerning the Federal Court of Appeal's decision in The Queen et al. v. Harris. The Honourable Paul Martin, Minister of Finance, sent a copy of your correspondence to Mr. Cauchon on September 20, 2000.

The Canada Customs and Revenue Agency (CCRA) is responsible for administering and enforcing the Income Tax Act, while the Department of Finance is responsible for tax policy and any proposed changes to the Act. The CCRA is committed to applying the tax laws consistently and fairly, and this includes collecting the full amount of tax owing under the law. However, the amount of tax payable for a particular year is based on the law that is in force at that time, and the CCRA does not have the discretion to change the law.

Generally, the Act provides that any person residing in Canada who owns taxable Canadian property may leave Canada without having to pay tax on this type of property at the time of departure. However, when the former resident sells the taxable Canadian property, any capital gain realized on the sale is subject to tax in Canada, unless this law is affected by a tax treaty between Canada and the new country of residence. As a result of legislation tabled by the Department of Finance on June 5, 2000, any person, including a trust, who leaves the country or transfers property from Canada on or alfer October 2, 1996, will pay tax on most capital gains that have accrued in Canada up to the time of departure. Exceptions to this rule include gains that accrue on Canadian real estate and Canadian business property, which can always be taxed when they are ultimately sold.

The confidentiality provisions of the Act prevent me from divulging information on taxpayers' files without their prior written authorization. These provisions are fundamental to the integrity of a self-assessment system and the CCRA takes its responsibility of maintaining confidentiality very seriously. Although Canadians have a right to receive complete and accurate information on general tax issues, they also have a right to expect that personal and financial information provided to the CCRA remains private and confidential.

The court case referred to in your correspondence involves one individual's court challenge regarding the tax affairs of another. The Attorney General filed a statement of defence on October 20, 2000, and the case is proceeding under special management of the court to protect taxpayer confidentiality. As this matter is before the courts, I cannot comment further on the court challenge.

I appreciate the opportunity to address your concerns.

							Yours sincerely,

							Bill McCloskey
							Assistant Commissioner
							Policy and Legislation Branch