CRA considers that s. 94(10) can impose a retroactive obligation on a non-resident trust to file returns for up to five previous taxation years

In its published version of Q.7 at the 2015 STEP Roundtable, CRA has provided an extended example illustrating that where a previous long-term Canadian resident left Canada, made a contribution more than five years later (say, in 2010) to a non-resident trust with Canadian beneficiaries, and then returned to Canada in 2015, less than 60 months later, s. 94(10) would then apply retroactively to all the post-contribution years, i.e., 2010 through to 2015, to deem the trust to be resident in Canada in those years. Consequently, it would be retroactively delinquent for having failed to file (and pay) the requisite returns (and tax) for those years. If he instead made the contribution to the trust in 2010 when he had been a non-resident for less than five years (and again returned to Canada in 2015 less than 60 months after that contribution), the Trust would be deemed fron the time of his contribution to be resident in Canada (i.e., from 2010 onwards) - rather than s. 94(10) applying retroactively at the time of his return to Canada to deem this result.

Neal Armstrong. Summary of 19 September 2015 STEP Roundtable, Q.7(b), 2015-0572141C6, under s. 94(10).