Mr. X, who had previously ceased to be resident in Canada upon emigrating, transferred property to Trust B and Trust A, which were factually resident outside Canada, and whose beneficiaries were his Canadian-resident children. Did s. 94 apply to deem the trusts to be resident in Canada? After noting that this question (having regard to the definition of “resident beneficiary”) turned on whether Mr. X was a “connected contributor” which, in turn, depended on whether all his contributions were made at a “non-resident time,” the Directorate noted that the wording of definition of the latter phrase was modified under the coming-into-force provisions respecting contributions made before June 23, 2000, and noted that (as explained in the Finance Explanatory Notes) a contribution made before June 23, 2000 will be considered to have been made by a person at a non-resident time if the person was non-resident in Canada for the period commencing 18 months before the trust year end for the year of the contribution and ending 60 months after the contribution.
Accordingly:
all of Mr. X’s contributions would have been made at a non-resident time. Accordingly, Mr. X would not be a connected contributor to Trust A or Trust B, and … there would not be a resident beneficiary under Trust A or Trust B.