Proposed regulation subsection 204.2(1) of the Income Tax Act (ITA) introduces a requirement for all trusts, that are required to file a return of income, to provide additional information[1] for each person who, in the year, is a trustee (or protector[2]), beneficiary or settlor[3]. This additional information includes: name, address,…
The 2021 Federal budget[1] announced proposed changes to the Disability Tax Credit (DTC) to broaden its scope and provide more clarity. These proposed legislative changes are now law with an effective date of January 1, 2021[2]. The Disability Tax Credit A taxpayer has access to the DTC when Canada Revenue…
A trust indenture established today looks nothing like a trust indenture established 10 or 20 years ago. The evolution of trust drafting, and the rigid legalese once used for trusts has given way to language that better anticipates the myriad of potential scenarios typically faced by today’s clients. This evolution…
Discretionary family trusts used to be a staple in most private company corporate structures. The income splitting benefits were obvious, and professionals were more than happy to implement a family trust in almost any corporate structure. The popularity of using family trusts eventually led to complacency from some professionals in…
Crypto assets are intangible digital assets that exist on a decentralized network through distributed ledger technology (DLT) – such as blockchain. A distributed ledger is a type of database that stores electronic records shared and replicated across many locations in numerous countries and maintained by a peer-to-peer world-wide decentralized network….
On February 4, 2022, exactly 1,438 days after the original draft legislation was introduced in the 2018 Federal Budget, the Department of Finance (Finance) released revised draft legislation[1] for beneficial ownership reporting for trusts. This revised draft legislation contained two significant changes: Effective date was changed to taxation years that…
There has been significant debate over the years regarding the financial statement presentation of redeemable or mandatorily retractable shares (RoMRS) as either a liability or equity. First, a bit of background When Accounting Standards for Private Enterprises (ASPE) were issued in 2011, it was determined that RoMRS should continue to…
Designating the surviving spouse or common-law partner as the successor holder of the Tax Free Savings Account “TFSA” simplifies the administration of transferring the account upon the death of the decedent. A successor holder may only be a spouse or common-law partner. All provinces and territories in Canada, except Quebec,…
Proposed trust reporting rules I have read a number of articles published throughout 2021 stating that the new proposed trust reporting rules are coming. Under the proposed new trust reporting rules, express trusts are required to report the beneficial ownership information to Canada Revenue Agency (CRA) and unless the Department…
Determining the bearer of the tax burden on income earned in an individual’s estate is not as simple as one might think. There are some basic taxation rules that apply to an estate which result in either the estate or the beneficiaries becoming ultimately liable for the tax. The tax…