Trusts

Total 212 Posts

Making Effective Distributions of Estate Taxable Income Tax

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Dealing with the taxation of income earned by an estate can be complex. It has become even more complex since January 1, 2016.  It was on this date that all estates, other than those that qualify as a “graduated rate estate” (GRE), were no longer able to benefit from graduated rates of taxation on their taxable income.  Rather, to the extent an estate that is not a GRE earns and….

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Estate Planning, Tax Issues, Trusts, Wills

QUALIFIED DISABILITY TRUST (“QDT”): HOW TO FILE A JOINT ELECTION?

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Recently, the Canada Revenue Agency (“CRA”) issued a “how to file” the joint election for a trust to be a QDT: http://www.cra-arc.gc.ca/E/pbg/tf/t3qdt/README.html From 2016 forward, this form is to be used if one or more beneficiaries are jointly electing that the trust be designated to be QDT for the year. The form should be filed with the trust return (T3) for the year. The filing of a joint election designates….

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Capacity Law, Disability, Estate Administration, Guardianship, Tax Issues, Testamentary Capacity, Trustee, Trusts, Uncategorized

Unrealized Capital Gains: Take Action Now?

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As we head toward another federal budget to be released on March 22, there is much speculation about a change in the capital gain inclusion rate from 50% to 66.67% or 75%. Current Capital Gain Tax As the rules are currently written, only 50% of a capital gain is subject to tax in Canada. For an Ontario resident, the combined Federal and Ontario tax rate applicable to a high rate….

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Canada Revenue Agency, Estate Administration, Estate Planning, In the News, Investments, Property, Real Estate, Tax Issues, Trusts, Uncategorized

The 21-Year Deemed Disposition Rule

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Generally speaking, a personal trust is deemed to have disposed of its entire capital property and land inventory on the 21st anniversary of the creation of the trust and every 21 years thereafter for proceeds equal to its fair market value and to have required the same property immediately thereafter for an amount equal to that fair market value.  This means trusts may be required to realize and pay tax….

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Estate Planning, Trusts

Multiple testamentary trusts for tax purposes: Are they always treated as one?

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This issue was recently tested in Court with a “bittersweet” result. Three testamentary trusts were created for 3 children in the late 2000’s. Their mother was an income beneficiary in each trust, and entitled to receive all the net income derived from each trust during her lifetime. A child and his/her children were income and capital beneficiaries of each respective trust and would be paid the net income after their….

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Canada Revenue Agency, Estate Administration, Investments, Property, Resulting Trust, Tax Issues, Trusts, Uncategorized

GAAR and 21-year rule planning

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The Canada Revenue Agency (CRA) was asked to comment on the implications of a transfer of property from a discretionary trust (Old Trust) to a Canadian corporation wholly owned by a new discretionary trust (New Trust). The 21-year deemed disposition rule provides that every 21 years in a family trust’s life, the CRA looks at the property in a trust as if it were the property of someone who had….

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Canada Revenue Agency, Estate Planning, Executors, Trusts
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