3 October 1989 External T.I. 58480 F - Residence of Trust

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.

Subject: Residence of the Estate of 19(1)

Please find attached a letter from 19(1) requesting our opinion on the residence of the above-noted trust.

Our understanding of the facts is as follows:

24(1)

We refer you to Interpretation Bulletin 447 which discusses the residence of a Trust or Estate. Generally, a trust is considered to reside where the trustee who manages the trust or controls the trust assets resides.

Since the above-noted trust has two trustees residing in different countries who have equal powers under the will, the comments in paragraph 2 of Interpretation Bulletin 447 may be helpful in determining which trustee has management and control of the trust.

The only relevant Canadian jurisprudence is the case of Thibodeau Family Trust's v The Queen 78 DTC 6376. The Court listed the following criteria for determining the residence of the trust.

-      residence of majority of trustees

-     location of trust property

-     whether the trust carried on business in Canada

Finally, it should be noted that under Article IV(1) of the Canada-U.S. Income Tax Convention (1980), a trust resident in Canada with income beneficiaries in the U.S. may have dual residence. Where dual residence occurs and there is double taxation of trust income, the residence of the trust for the purpose of avoiding double taxation of the trust income will, pursuant to Articles IV(4), be determined by the competent authorities.

Since this enquiry is in respect of a factual situation, we are forwarding it for your consideration and reply.

Yours truly,

for DirectorFinancial Industries DivisionRulings Directorate