As a coda to my article on “trusts vs estates”, I offer the following from Chow and Pryor, Taxation of Trusts and Estates (Toronto: Carswell, 2016) at 9.2.2(c)(ii): The residue is not ascertained until the debts and other liabilities of…
US grantor trust
Neal Armstrong notes that the CRA continues to maintain that a US grantor trust is not a bare trust for Canadian tax purposes. See his summary of the CRA response to question 10 at the 2016 STEP conference.
Crystallizing and estate planning
Is it always a good idea to take full advantage of the capital gain exemption (CGE) by crystallizing? Assume Ms X crystallizes her Opco shares, but Opco morphs into an investment holding company by the time of her death. In…
Estates vs Trusts
The following article appeared in the most recent edition of The Hamilton Law Association Journal.
What is the difference between an estate and a trust? And why does it matter for tax purposes?
Spousal trust cannot be a GRE
The CRA, in technical interpretation 2014-0553181E5F (June 25, 2015), says that a spousal trust cannot be a “graduated rate estate” for the purposes of the Act.
Alberta trust vindicated
What does it take to make an Alberta trust “work” in light of Fundy Settlement v Canada, 2012 SCC 14? From Colin Poon, “Interprovincial Tax Planning Using Trusts Upheld”, Canadian Tax Focus 5:3 (August 2015) re Discovery Trust v Canada…
New trust rules
Natalie Woodbury, “Testamentary Trusts: The New Rules” (2015) 63:1 Canadian Tax Journal 269-89 is a clear summary of the new rules relating to testamentary trusts and life-interest trusts. The author asks whether the new rules will lead to an increased…
Spousal rollover denied
In Murphy Estate v R, 2015 TCC 8, the Tax Court denied the spousal rollover where a consent order issued in the family law context seemed to provide for the transfer of the RRSP to the spouse from the children…
74.4(4) Exception Inapplicable
74.4(4) will not apply to save an estate freeze of Opco from the corporate attribution rule where a trust holds shares in Holdco rather than shares in Opco directly. 74.4(4) would also not apply where Opco1 and Opco2 are frozen,…
256(6) and Indemnities
According to CRA technical interpretation 2015-0565741E5, subsection 256(6) will not save the CCPC status of a corporation whose shares are pledged to secure an indemnity. The CRA concluded that an indemnity is not a debt for the purposes of the…