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: Determination of Residence for an Testamentary Trust
As discussed with Carol Abbass of your office, we are enclosing a letter dated September 19, 1991 from XXX concerning the determination of residence for the XXX for your consideration and reply.
We note that the writer suggests a split trust; one resident in Canada and one not resident in Canada. Given our comments in paragraph 3 of IT-447 "Residence of a Trust or Estate", it appears that split control over the assets of a trust does not necessarily create two distinct trusts. Furthermore, we note that it is not clear from the letter who is actually exercising control over the assets nor whether the various administrators involved acknowledge who, in fact, is entitled to control the assets. In our view it is a finding of fact as to who controls the trust.
We would also like to mention that the bankruptcy issue will not affect the determination of residency. If the trust is determined to be resident in Canada at the time of bankruptcy, then section 128 applies. If the trust is determined not to be resident in Canada, then section 128 has no application to the trust.
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© Her Majesty the Queen in Right of Canada, 1991
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© Sa Majesté la Reine du Chef du Canada, 1991
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