CRA indicates that a non-resident estate that becomes resident can then become a GRE

An estate initially was not resident in Canada but 18 months later (on January 1, 2018), it became resident in Canada due to the appointment of a new trustee – thereby resulting in a new taxation year starting at that time under s. 128.1(1)(a)(i). Could it designate itself as the graduated rate estate (“GRE”) of the deceased (non-resident) individual when filing its first tax return (for 2018)?

CRA indicated that the requirement in para. (d) of the GRE definition - that the estate designate itself as the GRE of the deceased individual in its Part I return for its first taxation year ending after 2015 – could be satisfied here because the estate was not required to file a Canadian return for any year before 2018 – thus it could make the required designation in its 2018 return. (The 36-month test for being a GRE also was satisfied.)

Neal Armstrong. Summary of 7 June 2019 STEP CRA Roundtable, Q.9 under s. 248(1) - graduated rate estate – para. (d).