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Administrative Policy
23 February 1998 External T.I. 9629675 - TWENTY -ONE YEAR RULE AND 94(1)
The deemed disposition role in s. 104(4) applies to a trust that is deemed to be resident in Canada only by virtue of s. 94(1)(c)(ii) and whose...
3 December 1997 External T.I. 9622765 - NON-RESIDENT TRUST - ATTRIBUTION
RC noted that, notwithstanding a previous memorandum, it was now its position that "in circumstances where the conditions for the application of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 75 - Subsection 75(2) | 43 |
10 January 1996 External T.I. 9406865 - NON RESIDENT DISCRETIONARY TRUSTS
Specific rules set forth in s. 94(1) would generally take precedence over the general provisions of s. 75(2).
A non-resident discretionary trust...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 75 - Subsection 75(2) | 25 |
19 June 1992 Memorandum (Tax Window, No. 23, p. 10, ¶2145)
S.94(1)(d) applies to unit trusts established in Hong Kong as part of an estate plan under which a Canadian resident may acquire units on the...
June 1992 Hong Kong Seminar, Q. B.9 (May 1993 Access Letter, p. 226)
Where the trustee of a unit trust has the discretion as to when the amounts of income or capital are to be distributed to any particular...
15 January 1991 T.I. (Tax Window, Prelim. No. 3, p. 30, ¶1092)
Where the terms of the trust fixed the proportionate entitlements of the beneficiaries, discretion of the trustees as to the amount and timing of...
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Cases
St. Michael Trust Corp. v. Canada, 2010 DTC 5189 [at 7361], 2010 FCA 309, aff'd sub nom Fundy Settlement v. Canada, 2012 DTC 5063 [at 6881], 2012 SCC 14
The two Canadian-resident principals of a Canadian-resident corporation ("PMPL"), who held shares of PMPL directly or through a Canadian holding...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 245 - Subsection 245(4) | accessing Treaty residence not abusive | 120 |
| Tax Topics - Treaties - Income Tax Conventions - Article 4 | 86 |
new
(f)
(g)
Subsection 94(1)
Arm's Length Transfer
Administrative Policy
15 June 2021 STEP Roundtable Q. 2, 2021-0882201C6 - Definition of Arm's Length Transfer
Father, a resident Canadian, makes a loan on arm’s length terms to a factually non-resident trust (the “Trust”) six months after the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(1) - Contribution | loan on arm's length terms by resident father to NR trust for his resident children caused the trust to be a s. 94(3)(a) trust | 229 |
16 February 2012 External T.I. 2011-0430841E5 - U.S. Grantor Trusts
CRA declined to comment on what amount of dividends paid by a closely-held corporation would satisfy (b)(i) of the arm's length transfer...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Treaties - Income Tax Conventions - Article 4 | 56 |
Connected Contributor
Administrative Policy
20 August 2015 External T.I. 2015-0581681E5 F - Non-resident trust rules
A Liechtenstein foundation, which is not resident in Canada, was created in XX and its founders never resided in Canada. Until his death in XX,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Corporation | Liechtenstein Foundation a trust | 34 |
4 January 2013 External T.I. 2012-0448681E5 - s. 116 req. of NR-estates per draft NRT legis.
Respecting an estate with American resident executors, Canadian resident beneficiaries and a testator who was an American (or, alternatively a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 116 - Subsection 116(1) | s. 94 trust is non-resident under s. 116 | 155 |
| Tax Topics - Income Tax Act - Section 2 - Subsection 2(1) | 145 | |
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(1) - Resident Contributor | 59 | |
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) | 204 |
Contribution
Administrative Policy
7 November 2022 External T.I. 2022-0926091E5 - Transfer of UK DB pension benefits to a UK SIPP
After a UK resident (under age 55) became resident in Canada, the commuted value of the individual’s member benefits under a UK defined-benefit...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 56 - Subsection 56(1) - Paragraph 56(1)(a) - Subparagraph 56(1)(a)(i) | constructive receipt where commuted value of entitlements under a UK defined-benefit plan transferred directly to a UK self-invested personal pension plan | 346 |
| Tax Topics - General Concepts - Payment & Receipt | constructive receipt doctrine applied to direct payment from one UK pension plan to UK individual pension plan | 106 |
| Tax Topics - Income Tax Act - Section 56 - Subsection 56(2) | s. 56(2) application where direct transfer between UK pension plans | 175 |
15 June 2021 STEP Roundtable Q. 2, 2021-0882201C6 - Definition of Arm's Length Transfer
Father, a resident Canadian, makes a loan on arm’s length terms to a factually non-resident trust for the benefit of his resident children. ...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(1) - Arm's Length Transfer | a loan made, on arm’s length terms to a trust, that is motivated partly by who the beneficiaries are, is not an arm’s length transfer | 236 |
Paragraph (b)
Articles
Mark Brender, Marc Roy, "Canadian Tax Trap Arising from Cross-Border Gift Tax Planning", Tax Notes International, Vol. 111, 4 September 2023, p. 1217
Need in light of (b) of “contribution” that any subsequent gift of property, by a donee of a Canadian resident, to a non-resident trust,...
Electing Contributor
Administrative Policy
15 June 2022 STEP Roundtable Q. 3, 2022-0924801C6 - Electing Contributor and Electing Trust
Can the election described in the s. 94(1) definition of “electing contributor” be late-filed?
The election is made in respect of a particular...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(1) - Electing Trust | election can be filed with a late-filed return | 115 |
Electing Trust
Administrative Policy
15 June 2022 STEP Roundtable Q. 3, 2022-0924801C6 - Electing Contributor and Electing Trust
Can the election described in the s. 94(1) definition of “electing trust” be late-filed?
CRA indicated that as long as the election is filed...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(1) - Electing Contributor | election must be filed by filing-due date even if return itself is filed late | 171 |
Exempt Foreign Trust
Paragraph (d)
Administrative Policy
14 June 2016 External T.I. 2016-0647951E5 - Exempt Foreign Trust
What is the meaning of “created exclusively for charitable purposes” in (d)(ii) of the definition of “exempt foreign trust” in s. 94(1)? ...
Paragraph (f)
Articles
Peter Megoudis, "The Canadian Non-resident Trust Rules and Global Employee Benefit Plan Trusts", Taxation of Executive Compensation and Retirement (Federated Press), Vol. 24, No. 3, October 2012, p. 1583.
Relating awards to non-qualifying services (pp.1587-1588)
The inquiry is thus to determine whether any benefits to be provided by the trust...
Paragraph (g)
Articles
Peter Megoudis, "The Canadian Non-resident Trust Rules and Global Employee Benefit Plan Trusts", Taxation of Executive Compensation and Retirement (Federated Press), Vol. 24, No. 3, October 2012, p. 1583.
Predominantly single country requirement (p.1586)
Paragraph (g) of the definition of "exempt foreign trust" in subsection 94(1) of the Act...
Paragraph (h)
Administrative Policy
2007 Ruling 2006-0217281R3 - Qualification as "exempt foreign trust"
Trustco (a non-resident trust company) receives contributions from investors (as settlors of respective grantor trusts (each, a “Grantor...
10 October 2008 Roundtable, 2008-0285471C6 F - Fiducie étrangère exempte - fiducie admissible
Where the trustee of an investment trust has discretion as to the timing of distributions of income or capital, but not as to their allocation...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(1) - Fixed Interest | discretion as to payment timing is acceptable – but discretion in choice of record dates could affect beneficiaries’ respective shares | 225 |
Subparagraph (h)(ii)
Clause (h)(ii)(C)
Articles
Tina Korovilas, Drew Morier, "Non-Corporate Vehicles in the Foreign Affiliate Context", 2018 Conference Report (Canadian Tax Foundation), 20:1 – 114
Difficult application of (h) exception to security trust (pp. 20:90-92)
The following is an example of a transfer of property by an FA to an NRT,...
Fixed Interest
Administrative Policy
10 October 2008 Roundtable, 2008-0285471C6 F - Fiducie étrangère exempte - fiducie admissible
Where the trustee of an investment trust has discretion as to the timing of distributions of income or capital without any discretion as to the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(1) - Exempt Foreign Trust - Paragraph (h) | discretion as to timing of payments that does not affect the beneficiaries respective shares of income and capital is acceptable | 118 |
Articles
Josh Jones, Jeffrey Love, "Recent Developments in Asset Management", draft 2023 CTF Annual Conference paper
Payment and allocation discretion consistent with fixed interest status (p. 32)
- The discretion of pay distributions at different times (e.g., to...
Non-Resident Time
Administrative Policy
26 July 2018 Internal T.I. 2018-0768281I7 - Section 94 and pre-June 23, 2000 contributions
Mr. X, who had previously ceased to be resident in Canada upon emigrating, transferred property to Trust B and Trust A, which were factually...
7 March 2002 Internal T.I. 2001-0114957 F - Fiducie de nouveaux arrivants
CCRA noted that under the predecessor legislation, s. 94(1)(b)(i)(A)(III) allowed a newcomer to defer the taxation of foreign accrual property...
Resident Beneficiary
Administrative Policy
20 June 2023 STEP Roundtable Q. 6, 2023-0959571C6 - Non-Resident Trust and Canadian Charity
A Canadian resident became a non-resident and, within 60 months, settled a non-resident trust for non-resident family members, except that the...
Resident Contributor
Administrative Policy
2 July 2014 External T.I. 2013-0485651E5 - Non-resident estate
In finding that the deceased would not be a resident contributor to an estate, CRA stated:
[T]he concept of residence necessarily implies that the...
16 June 2014 STEP Roundtable Q. 11, 2014-0529831C6 - STEP - Q 11- Immigration trust exemption
A new immigrant to Canada, who previously had, many years ago, established a foreign trust, becomes resident on August 1, 2015. The foreign trust...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) - Paragraph 94(3)(a) | immigration trust becomes resident effective January 1 of immigration year | 171 |
16 June 2014 STEP Roundtable, 2014-0529821C6 - Cancellation of Immigrant Trust
An individual, who was never previously Canadian resident, became resident on August 1, 2009 and remained a Canadian resident thereafter so that...
4 January 2013 External T.I. 2012-0448681E5 - s. 116 req. of NR-estates per draft NRT legis.
Respecting an estate with American resident executors, Canadian resident beneficiaries and a testator who was an American (or, alternatively a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 116 - Subsection 116(1) | s. 94 trust is non-resident under s. 116 | 155 |
| Tax Topics - Income Tax Act - Section 2 - Subsection 2(1) | 145 | |
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(1) - Connected Contributor | 123 | |
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) | 204 |
20 October 2009 External T.I. 2009-0327911E5 F - Fiducie non-résidente Contribuant résidant
Mr. A, who was previously non-resident, became a resident of Canada on August 1, 2005, but on October 1, 2007, left Canada. However, since his...
12 September 2007 External T.I. 2006-0211121E5 F - Fiducie non-résidente
When must the dual condition of being resident in Canada and being a contributor be satisfied for a trust to be deemed resident in Canada for a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 233.3 - Subsection 233.3(1) - Specified Foreign Property | generally no reporting obligations on T1135 where interest in non-resident trust acquired for not consideration | 241 |
Resident Portion
Administrative Policy
20 June 2023 STEP Roundtable Q. 7, 2023-0959581C6 - Deemed Resident Trust and the Resident Portion
Q.7A
How is the “resident portion” (as defined in s. 94(1)) computed where (i) a Canadian resident beneficiary uses a residential property...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(2) - Paragraph 94(2)(a) | contribution to NR trust where beneficiary pays expenses of trust property | 103 |
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(2) - Paragraph 94(2)(g) - Subparagraph 94(2)(g)(iv) | application where a s. 94 trust lent to a resident beneficiary, and when loan repaid | 177 |
| Tax Topics - Income Tax Act - Section 95 - Subsection 95(1) - Controlled Foreign Affiliate - Paragraph (b) | NR corp wholly owned by s. 94(3) trust is CFA of the resident portion trust | 162 |
Articles
Peter Megoudis, "The Canadian Non-resident Trust Rules and Global Employee Benefit Plan Trusts", Taxation of Executive Compensation and Retirement (Federated Press), Vol. 24, No. 3, October 2012, p. 1583.
Mobile employees/deficits and surpluses (p. 1589)
In many cases, however, mobile employees are providing services for the benefit of different...
Subsection 94(2) - Rules of application
Paragraph 94(2)(a)
Administrative Policy
20 June 2023 STEP Roundtable Q. 7, 2023-0959581C6 - Deemed Resident Trust and the Resident Portion
A Canadian resident beneficiary uses a residential property owned by a non-resident trust (which has made a valid (resident portion) election...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(1) - Resident Portion | illustration of the resident portion rules for a s. 94 trust that inter alia has lent to a resident beneficiary or earns FAPI | 492 |
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(2) - Paragraph 94(2)(g) - Subparagraph 94(2)(g)(iv) | application where a s. 94 trust lent to a resident beneficiary, and when loan repaid | 177 |
| Tax Topics - Income Tax Act - Section 95 - Subsection 95(1) - Controlled Foreign Affiliate - Paragraph (b) | NR corp wholly owned by s. 94(3) trust is CFA of the resident portion trust | 162 |
28 May 2019 Internal T.I. 2018-0772971I7 - Interaction between sections 94, 17, 247
The beneficiaries of CdnTrust, a trust resident in Canada that wholly-owns Canco, and of NRTrust, a factually non-resident trust that wholly-owns...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(2) - Paragraph 94(2)(f) | failure to charge for services rendered by a Canco to a NR sub of a NR trust tainted the NR trust under s. 94(2) | 258 |
| Tax Topics - Income Tax Act - Section 17 - Subsection 17(1) | triggering of s. 94(2)(a) by interest-free loan to the sub of a non-resident trust was independent of the application of s. 17 to the loan | 262 |
| Tax Topics - Income Tax Act - Section 247 - New - Subsection 247(2) | any subsequent adjustment under s. 247(2) would not affect the application of s. 94(2)(a) to an NIB loan by Canco to a NR Trust sub | 331 |
Articles
Mark Brender, Marc Roy, "Canadian Tax Trap Arising from Cross-Border Gift Tax Planning", Tax Notes International, Vol. 111, 4 September 2023, p. 1217
Example of application of s. 94(2)(a) (p. 1219)
- S. 94(2)(a) would apply, for instance, to a transfer of property to a corporation owned by a...
Paragraph 94(2)(f)
Administrative Policy
28 May 2019 Internal T.I. 2018-0772971I7 - Interaction between sections 94, 17, 247
The beneficiaries of CdnTrust, a trust resident in Canada that wholly-owns Canco, and of NRTrust, a factually non-resident trust that wholly-owns...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(2) - Paragraph 94(2)(a) | NIB loan by a Canco to a NR sub of a NR trust tainted the NR trust under s. 94(2) | 222 |
| Tax Topics - Income Tax Act - Section 17 - Subsection 17(1) | triggering of s. 94(2)(a) by interest-free loan to the sub of a non-resident trust was independent of the application of s. 17 to the loan | 262 |
| Tax Topics - Income Tax Act - Section 247 - New - Subsection 247(2) | any subsequent adjustment under s. 247(2) would not affect the application of s. 94(2)(a) to an NIB loan by Canco to a NR Trust sub | 331 |
Paragraph 94(2)(g)
Administrative Policy
16 June 2014 STEP Roundtable Q. 12, 2014-0523071C6 - STEP Q12 - Non-resident trust
The Will of the resident deceased establishes a trust for the benefit of his U.S.- resident child and her non-resident issue. Although the Will is...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(2) - Paragraph 94(2)(n) | resident estate as deemed contributor to non-resident trust | 198 |
26 June 2014 External T.I. 2013-0514771E5 - Residence of a trust
A Canadian resident leaves an unconditional bequest to a trust (the "Trust") with a non-resident settlor, trustee and beneficiary (the deceased's...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(2) - Paragraph 94(2)(n) | Canadian residence of estate taints non-resident trust beneficiary | 244 |
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) | deceased individual is not a "resident" contributor | 80 |
16 June 2014 STEP Roundtable Q. 12
The Will of the resident deceased establishes a trust for the benefit of his U.S.- resident child and her non-resident issue. The Will is...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(2) - Paragraph 94(2)(n) | resident estate as deemed contributor to non-resident trust established under Will | 190 |
Subparagraph 94(2)(g)(iv)
Administrative Policy
20 June 2023 STEP Roundtable Q. 7, 2023-0959581C6 - Deemed Resident Trust and the Resident Portion
Regarding where a loan is made by a non-resident trust (which has made a valid (resident portion) election under s. 94(3)(f)) to a Canadian...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(1) - Resident Portion | illustration of the resident portion rules for a s. 94 trust that inter alia has lent to a resident beneficiary or earns FAPI | 492 |
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(2) - Paragraph 94(2)(a) | contribution to NR trust where beneficiary pays expenses of trust property | 103 |
| Tax Topics - Income Tax Act - Section 95 - Subsection 95(1) - Controlled Foreign Affiliate - Paragraph (b) | NR corp wholly owned by s. 94(3) trust is CFA of the resident portion trust | 162 |
Paragraph 94(2)(k)
Articles
Mark Brender, Marc Roy, "Canadian Tax Trap Arising from Cross-Border Gift Tax Planning", Tax Notes International, Vol. 111, 4 September 2023, p. 1217
Example of application of s. 94(2)(k) (p. 1219)
- S. 94(2)(k) could, for example, apply if a Canadian resident asks or directs a nonresident to...
Paragraph 94(2)(k.1)
Articles
Michael N. Kandev, Matias Milet, "Foreign Trusts", 2017 Annual CTF Conference draft paper
Potential application where foreign company funds a foreign trust to buy shares of foreign parent before their transfer to Canadian employees (p....
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94.1 - Subsection 94.1(1) - Paragraph 94.1(1)(b) | 292 | |
| Tax Topics - Income Tax Act - Section 94.2 - Subsection 94.2(3) | 448 |
Peter Megoudis, "The Canadian Non-resident Trust Rules and Global Employee Benefit Plan Trusts", Taxation of Executive Compensation and Retirement (Federated Press), Vol. 24, No. 3, October 2012, p. 1583.
Indirect provision of benefits for employment services provided to Canadian employees (p.1585)
As discussed, the NRT rules only apply if there is...
Paragraph 94(2)(n)
Administrative Policy
16 June 2014 STEP Roundtable Q. 12, 2014-0523071C6 - STEP Q12 - Non-resident trust
The Will of the resident deceased establishes a trust for the benefit of his U.S.- resident child and her non-resident issue. Although the Will is...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(2) - Paragraph 94(2)(g) | resident estate as deemed contributor to non-resident trust | 129 |
26 June 2014 External T.I. 2013-0514771E5 - Residence of a trust
A Canadian resident leaves an unconditional bequest to a trust (the "Trust") with a non-resident settlor, trustee and beneficiary (the deceased's...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(2) - Paragraph 94(2)(g) | Canadian residence of estate taints non-resident trust beneficiary | 149 |
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) | deceased individual is not a "resident" contributor | 80 |
16 June 2014 STEP Roundtable Q. 12
The Will of the resident deceased establishes a trust for the benefit of his U.S.- resident child and her non-resident issue. The Will is...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(2) - Paragraph 94(2)(g) | resident estate as deemed contributor to non-resident trust established under Will | 190 |
Paragraph 94(2)(t)
Administrative Policy
7 June 2019 STEP Roundtable Q. 1, 2019-0798621C6 - NRT ceasing to be deemed resident
If a non-resident trust is "tainted" as a resident trust under s. 94(2)(g) by being issued shares by a resident corporation, it potentially can...
17 January 2019 Internal T.I. 2018-0781041I7 - Non-resident trust ceasing to be deemed resident
In 2010, Trust A, a factual non-resident trust was deemed a resident by s. 94(2)(g) because Corp X, a Canadian resident corporation, issued 100...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(5) | change of residency occurs with s. 94(2)(t) sale | 183 |
24 February 2014 External T.I. 2013-0509111E5 - NRT ceasing to be a Deemed Resident
In 2010, Trust A, a factual non-resident trust was deemed a resident by s. 94(2)(g) because Corp X, a Canadian resident corporation, issued 100...
Subsection 94(3) - Liabilities of non-resident trusts and others
Administrative Policy
26 June 2014 External T.I. 2013-0514771E5 - Residence of a trust
A Canadian resident leaves an unconditional bequest to a trust (the "Trust") with a non-resident settlor, trustee and beneficiary (the deceased's...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(2) - Paragraph 94(2)(g) | Canadian residence of estate taints non-resident trust beneficiary | 149 |
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(2) - Paragraph 94(2)(n) | Canadian residence of estate taints non-resident trust beneficiary | 244 |
11 October 2013 APFF Roundtable Q. 3, 2013-049281 F
Question 3a - Factual dual residency
How will CRA apply the tiebreaker rules in the Canada-US Convention in the case of dual...
4 January 2013 External T.I. 2012-0448681E5 - s. 116 req. of NR-estates per draft NRT legis.
CRA, when asked whether a s. 116 certificate was required when an estate with American resident executors disposed of taxable Canadian property to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 116 - Subsection 116(1) | s. 94 trust is non-resident under s. 116 | 155 |
| Tax Topics - Income Tax Act - Section 2 - Subsection 2(1) | 145 | |
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(1) - Connected Contributor | 123 | |
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(1) - Resident Contributor | 59 |
22 July 2003 Internal T.I. 2003-0018027 F - Fondation du Liechtenstein
Mr. X formed a foundation (a “sifting”) under the laws of Liechtenstein, of which he was the life beneficiary, and his wife and children were...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Corporation | Liechtenstein sifting was a corporation rather than trust | 60 |
| Tax Topics - Income Tax Act - Section 95 - Subsection 95(1) - Controlled Foreign Affiliate | Liechtenstein sifting in which the resident individual had a life interest was to be treated as a 100% CFA | 243 |
Articles
Mark Brender, Marc Roy, "Canadian Tax Trap Arising from Cross-Border Gift Tax Planning", Tax Notes International, Vol. 111, 4 September 2023, p. 1217
Plain overview of when s. 94 applies (p. 1217)
- Except for limited exceptions regarding principally some commercial and charitable trusts, s. 94...
Peter Megoudis, "The Canadian Non-resident Trust Rules and Global Employee Benefit Plan Trusts", Taxation of Executive Compensation and Retirement (Federated Press), Vol. 24, No. 3, October 2012, p. 1583.
Distinguishing trust from agency (p.1584)
The NRT rules only apply to non-resident trusts. They thus presumably do not apply to other...
Paragraph 94(3)(a)
See Also
Barwicz v. The King, 2024 CCI 93
The taxpayer was one of nine beneficiaries of a discretionary inter vivos personal trust which ceased to be resident in Canada on December 17,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 160 - Subsection 160(1) - Paragraph 160(1)(e) | a distribution by a discretionary trust in satisfaction of a capital interest occurred for no consideration for s. 160 purposes | 392 |
| Tax Topics - Income Tax Act - Section 128.1 - Subsection 128.1(4) - Paragraph 128.1(4)(b) | s. 128.1(4)(a) applied for s. 94 purposes | 286 |
| Tax Topics - General Concepts - Fair Market Value - Other | capital interest in discretionary personal trust had nil value | 157 |
Administrative Policy
29 May 2018 STEP Roundtable Q. 14, 2018-0744091C6 - NRT filing obligations
(a) January 1 effective date of deemed residency
A person who had contributed property to a non-resident trust becomes resident upon immigrating...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(10) | a non-resident trust can be retroactively (going back 5 years) deemed to have been resident in Canada if a non-resident contributor immigrates | 387 |
9 February 2017 External T.I. 2016-0657531E5 - Deemed resident trust and "designated beneficiary"
A non-resident trust, which is deemed to be resident for various purposes under s. 94(3)(a), is nonetheless considered to be a “non-resident...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 210 - Designated Beneficiary - Paragraph (a) | s.94(3) trust can cause a trust of which it is beneficiary to be subject to Part XII.2 tax | 120 |
10 June 2016 STEP Roundtable Q. 7, 2016-0634911C6 - Deemed Resident Trust and CCPC Status
The fact that a trust which is factually non-resident is deemed to be resident in Canada for the purposes specifically listed in s. 94(3)(a) will...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 125 - Subsection 125(7) - Canadian-Controlled Private Corporation | control by a s. 94 trust does not produce CCPC status | 90 |
18 June 2015 STEP Roundtable Q. 7a, 2015-0572141C6 - 2015 STEP Q7-Deemed Res Trust-subsection 94(10)
///?p=37586#Q7b">19 June 2015 STEP Roundtable, oral Q.7(a)): Will an individual who becomes resident in Canada for the first time, and who has...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(10) | retroactive application of s. 94(3)(a) to immigration trust to beginning of year | 530 |
19 September 2015 STEP Roundtable, Q.7(b)
An individual who becomes resident in Canada for the first time, and who has previously contributed property to a non-resident trust, will be...
16 June 2014 STEP Roundtable Q. 11, 2014-0529831C6 - STEP - Q 11- Immigration trust exemption
A new immigrant to Canada, who previously had, many years ago, established a foreign trust, becomes resident on August 1, 2015. The foreign trust...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(1) - Resident Contributor | immigration trust becomes resident effective January 1 of immigration year | 171 |
26 November 2013 External T.I. 2013-0508931E5 - Form T1134
The "return" referred to in subsection 233.4(4) of the Act (i.e., Form T1134) and subsection 233.3(3) of the Act (i.e., Form T1135) is not a...
12 February 2013 Internal T.I. 2012-0437211I7 F - NRT rules and subsection 164(6)
The estate of an individual, who was resident in Canada for more than 60 months, was non-resident on general principles, as the executor was a US...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 164 - Subsection 164(6) | s. 94 deemed resident trust could carry back under s. 164(6) re capital loss on non-TCP shares | 318 |
| Tax Topics - Income Tax Act - Section 54 - Personal-Use Property | personal residence of deceased potentially would not be personal-use property to estate | 112 |
Subparagraph 94(3)(a)(ii)
Administrative Policy
4 June 2024 STEP Roundtable Q. 13, 2024-1007851C6 - DRT and Section 216
Is a non-resident trust, that is deemed to be resident in Canada pursuant to s. 94 and which owns a Canadian rental property, resident in Canada...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) - Paragraph 94(3)(a) - Subparagraph 94(3)(a)(viii) | a Canadian payer must withhold on rent paid to a s. 94 deemed resident trust | 226 |
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) - Paragraph 94(3)(g) | although resident tenant required to withhold on rent to s. 94(3), s. 94(3)(g) applies to such withholding | 152 |
Subparagraph 94(3)(a)(vi)
Administrative Policy
13 July 2016 External T.I. 2015-0608671E5 - Foreign Reporting Requirement under 233.4
If a U.S.-resident trust resident to which s. 94 applies is a member of a U.S. partnership holding a U.S.-resident corporation, who is required to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 233.4 - Subsection 233.4(1) - Paragraph 233.4(1)(c) | deemed resident s. 94 NRT member of U.S. LP is not resident in determining whether the LP is a reporting entity | 204 |
Subparagraph 94(3)(a)(viii)
Administrative Policy
4 June 2024 STEP Roundtable Q. 13, 2024-1007851C6 - DRT and Section 216
Is a non-resident trust, that is deemed to be resident in Canada pursuant to s. 94 and which owns a Canadian rental property, resident in Canada...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) - Paragraph 94(3)(a) - Subparagraph 94(3)(a)(ii) | s. 94(3)(a) trust computes its income from a Canadian rental property under normal Part I rules, but must observe s. 104(7.01) | 116 |
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) - Paragraph 94(3)(g) | although resident tenant required to withhold on rent to s. 94(3), s. 94(3)(g) applies to such withholding | 152 |
25 February 2015 External T.I. 2014-0517511E5 - Withholding tax and deemed resident trust
A discretionary family trust (the "Trust") with Canadian resident beneficiaries is deemed to be non-resident in Canada by s. 94(3)(a). If it...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) - Paragraph 94(3)(g) | Part XIII withholding on capital or taxable dividend then distributed by trust to resident beneficiaries can be recovered | 277 |
Paragraph 94(3)(d)
Administrative Policy
20 June 2023 STEP Roundtable Q. 5, 2023-0959801C6 - Subsection 94(8) Recovery Limit
A factually non-resident, inter vivos, personal trust which has one resident beneficiary and no resident contributors was subject to s. 94 in its...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(8) | recovery limit formula operates beyond the taxation year in which unpaid taxes arose, irrespective of whether the trust continues to be a s. 94(3) trust | 316 |
Paragraph 94(3)(b)
Administrative Policy
28 May 2013 Internal T.I. 2013-0476381I7 - Deemed Resident Trusts & Foreign Tax Credit
A trust was settled in the U.S. with marketable securities having an adjusted cost base and fair market value of $100,000. The settlor moved to...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 126 - Subsection 126(1) | no pro-ration of FTC by s. 94 trust where Canadian gain was smaller than US gain | 295 |
| Tax Topics - Income Tax Act - Section 20 - Subsection 20(12) | no s. 20(12) deduction available where only a capital gain | 154 |
Paaragraph 94(3)(c)
Administrative Policy
1 May 2017 Internal T.I. 2015-0624511I7 - 248(1)(e)(ii) of the definition of TCP
A non-resident trust (the “Trust”) took the position that its shares of various private non-resident corporations (“NRCos”) were not...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Taxable Canadian Property - Paragraph (d) | upstream and downstream loans within a wholly-owned corporate group generally are to be treated differently/gross asset and proportionate value approach used | 566 |
Paragraph 94(3)(f)
Administrative Policy
8 September 2022 Internal T.I. 2021-0892791I7 - Paragraph 94(3)(f) election
CRA concluded that a non-resident trust that has never filed Canadian returns was deemed to be a resident trust under s. 94(3)(a) for a particular...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 152 - Subsection 152(7) | CRA should be well supported in any decision not to reassess where a timely return is filed following an arbitrary assessment | 220 |
27 June 2016 External T.I. 2014-0532601E5 - Paragraph 94(3)(f) electing trust and form T1135
In confirming that neither the non-resident portion trust nor the particular trust is required to file form T1135 under s. 233.3 where a deemed...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 233.3 - Subsection 233.3(1) - Specified Canadian Entity | non-resident portion trust not a specified Canadian entity | 137 |
Paragraph 94(3)(g)
Administrative Policy
4 June 2024 STEP Roundtable Q. 13, 2024-1007851C6 - DRT and Section 216
Regarding the application of Part XIII to a non-resident trust that is deemed to be resident in Canada pursuant to s. 94 and which owns a Canadian...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) - Paragraph 94(3)(a) - Subparagraph 94(3)(a)(ii) | s. 94(3)(a) trust computes its income from a Canadian rental property under normal Part I rules, but must observe s. 104(7.01) | 116 |
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) - Paragraph 94(3)(a) - Subparagraph 94(3)(a)(viii) | a Canadian payer must withhold on rent paid to a s. 94 deemed resident trust | 226 |
25 February 2015 External T.I. 2014-0517511E5 - Withholding tax and deemed resident trust
A discretionary family trust (the "Trust") with Canadian resident beneficiaries is deemed to be non-resident in Canada by s. 94(3)(a). If it...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) - Paragraph 94(3)(a) - Subparagraph 94(3)(a)(viii) | recovering Part XIII tax on a capital dividend | 126 |
25 July 2014 Internal T.I. 2013-0513641I7 - Deemed resident trust under subsection 94(3)
The Estate of a Canadian resident, with two of his children as (apparently non-resident) beneficiaries, was not resident in Canada by virtue of...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - 101-110 - Section 104 - Subsection 104(7.01) | meaning of "maximum amount...deductible" | 168 |
| Tax Topics - Income Tax Act - Section 120 - Subsection 120(1) | addition for s. 94 deemed trust | 154 |
Subsection 94(5)
Administrative Policy
17 January 2019 Internal T.I. 2018-0781041I7 - Non-resident trust ceasing to be deemed resident
If a non-resident trust is "tainted" as a resident trust under s. 94(2)(g) by being issued shares by a resident corporation, it potentially can...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(2) - Paragraph 94(2)(t) | s. 94(2)(t) sale of Canadian shares effects an immediate change in trust residency | 254 |
Articles
Robert E. Ward, "Twenty-One Years Is Not Enough: Avoiding Canada's 21-Year Rule with Trusts for U.S. Beneficiaries", Tax Management International Journal, 2017, p. 710
Use in U.S. of generation-skipping dynasty trusts (p. 711)
U.S. citizens and non-citizens who are domiciled in the United States ("U.S. persons")...
Subsection 94(8)
Administrative Policy
20 June 2023 STEP Roundtable Q. 5, 2023-0959801C6 - Subsection 94(8) Recovery Limit
A factually non-resident, inter vivos, personal trust which has one resident beneficiary and no resident contributors was subject to s. 94 in each...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) - Paragraph 94(3)(d) | illustration of the operation of the recovery limit rules on a resident beneficiary of a s. 94(3) trust that has unpaid Canadian taxes | 249 |
Subsection 94(8.2)
Articles
Elie Roth, Tim Youdan, Chris Anderson, Kim Brown, "Taxation of Beneficiaries Resident in Canada", Chapter 4 of Canadian Taxation of Trusts (Canadian Tax Foundation), 2016.
Effect of ss. 94(8.1) and (8.2)
By deeming the relevant transfers and loans not to be arm's-length transfers (as otherwise defined in subsection...
Subsection 94(10) - Contributor — resident in Canada within 60 months after contribution
Administrative Policy
29 May 2018 STEP Roundtable Q. 14, 2018-0744091C6 - NRT filing obligations
A non-resident trust has resident beneficiaries (who are not successor beneficiaries as defined in s. 94(1)) and its contributor had made a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) - Paragraph 94(3)(a) | effective date of deemed residency where NR contributor immigrates | 423 |
18 June 2015 STEP Roundtable Q. 7b, 2015-0572141C6 - 2015 STEP Q7-Deemed Res Trust-subsection 94(10)
///?p=37586#Q7b">19 June 2015 STEP Roundtable, oral Q.7(b)
Assume in January 2005, Mr. X became a non-resident of Canada, in July 2010, he made a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) - Paragraph 94(3)(a) | retroactive application of s. 94(3)(a) to immigration trust to beginning of year | 131 |
21 May 2008 External T.I. 2007-0259271E5 F - Fiducie non-résidente - contribuant immigrant
For the purposes of the definitions of resident contributor and connected contributor, a period of residence in Canada that occurs before a period...
Subsection 94(16)
Administrative Policy
13 June 2017 STEP Roundtable Q. 4, 2017-0695141C6 - U.S. grantor trust
Mr. C, who is a Canadian resident and U.S. citizen, settled a revocable living trust for him and his family which, as a “grantor trust”, is...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 126 - Subsection 126(1) | dual-resident individual who is subject to direct U.S. tax on income from a s. 94(3) trust can generate a FTC if the trust income is annually distributed or he elects under s. 94(16) | 503 |
| Tax Topics - Income Tax Act - 101-110 - Section 108 - Subsection 108(5) - Paragraph 108(5)(a) | income from factually U.S.-resident but s. 94(3) trust was U.S.-sourced | 114 |
Articles
Mark Brender, Marc Roy, "Canadian Tax Trap Arising from Cross-Border Gift Tax Planning", Tax Notes International, Vol. 111, 4 September 2023, p. 1217
Use of s. 94(16) election to avoid FTC mismatch for grantor trust (pp. 1219 1222)
- No Canadian foreign tax credit is available to a U.S.-resident...