Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Question 4
Non-Resident Trust
If a non-resident trust was settled by a non-resident of Canada who later becomes a resident of Canada, is subsection 75(2) applicable to the settlor and the trust once the settlor takes up residence in Canada notwithstanding that the trust may be exempt from the application of subsection 94(1) by virtue of subclause 94(1)(b)(i)(A)(iii)?
Department's Position
Pursuant to subsection 75(2), any income or loss from property settled on the trust (or property substituted therefor) and any taxable capital gain or allowable capital loss from the disposition of the property (or property substituted therefor), will in certain circumstances be deemed to be that of the person from whom the trust property was directly or indirectly received.
Subsection 75(2) operates independently from the provisions of section 94. Consequently, if property is held on any of the conditions set out in subsection 75(2), it would apply to the settlor and the trust once the settlor takes up residence in Canada.
Institute of Chartered Accountants of Alberta
Round Table - May 12, 1994
Doug Watson
941090