CRA confirms that Pension Benefit Guaranty Corp.’s taking over a US pension plan does not affect its s. 233.2 exempt trust status
One of the exceptions from “specified foreign property,” which resident individuals generally are required to report on Form T1135, is for an exempt trust, which generally include a trust (that is tax-exempt in its country of residence) for a foreign pension plan maintained primarily for the benefit of non-resident individuals. CRA confirmed that there is no adverse impact on this exclusion for a Canadian beneficiary where, following an asset insufficiency in a US qualified pension plan, the Pension Benefit Guaranty Corporation, as replacement trustee, commences paying the plan benefits to the members (the majority of whom reside in the US).
Neal Armstrong. Summary of 4 June 2020 External T.I. 2018-0753611E5 under s. 233.2(1) – exempt foreign trust – (b).