Fundy Settlement v. Canada, 2012 DTC 5063 [at at 6881], 2012 SCC 14, [2012] 1 SCR 520, aff'g sub nom St. Michael Trust Corp. v. The Queen, 2010 DTC 5189 [at 7361], 2010 FCA 309, aff'g sub nom Garron v. The Queen, 2009 DTC 1568, 2009 TCC 450 -- summary under Subsection 104(1)

By services, 28 November, 2015

A Barbados-resident corporation was the trustee of two trusts. The Court found that the trusts were resident in Canada because that is where the beneficiaries exercised the central management and control of the trust (the Barbados corporation's management role was minor). Regarding s. 104(1), the Court stated (at paras. 12-13):

St. Michael argues that s. 104(1) links the trustee to the trust for all attributes of a trust, including residency. However, ... there is nothing in the context of s. 104(1) that would suggest there be a legal rule requiring that the residence of a trust must be the residence of the trustee.

On the contrary, s. 2(1) is the basic charging provision of the Act, and its reference to a "person" must be read as a reference to the taxpayer whose taxable income is being subjected to income tax. This is the trust, not the trustee. This follows from s. 104(2), which separates the trust from the trustee in respect of trust property.

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