Where is a trust resident if the trustee lives abroad?
Not necessarily where the trustee is. Under this test a trust is resident where its central management and control is in fact exercised, and that is not automatically the named trustee's home. If the trustee administers but someone else decides how the fund is invested, when distributions are made and what the trust does, control may sit with that person. Appointing a trustee in another country therefore changes residence only if the trustee genuinely exercises the powers. What the deed says about the trustee's discretion is the starting point; what happens in practice decides it.
Can a company be resident where it has no office?
Yes. The test asks where the highest level of control over the company is actually exercised, and control is exercised by people, wherever those people happen to be. A company with no premises, no staff and no register in a country can be resident there because those who decide what it does are there. The reasoning runs the other way too: premises, employees and a local registered office do not make a company resident if the strategic decisions are taken elsewhere. The register records where a company was formed, not where it is controlled.
Is central management and control the same as day-to-day management?
No, and the distinction does most of the work in practice. Day-to-day management is running the business: operations, supervision, and carrying out decisions already taken. Central management and control is the level above — strategic direction, major commitments, funding and senior appointments. A company can be managed daily by staff in one country and controlled from another, and it is the second location the test follows. That is why a substantial local operation with its own management team is not by itself an answer, and why a small set of decisions taken quietly elsewhere can be.
Who exercises control if trustees follow the settlor's wishes?
The person whose wishes are followed, if they are followed as a matter of course rather than considered. The analysis looks for the point at which the substantive decision is made. Where a trustee receives a request, takes advice, deliberates and could realistically refuse, the trustee is exercising control even if requests are usually granted. Where the trustee implements instructions without genuine consideration, control lies with whoever gives them and the trust's residence follows that person. Letters of wishes, the speed of decisions, and whether a request was ever refused, are what the evidence turns on.
Does a majority of non-resident directors settle our residence?
No. Board composition is relevant but not determinative, because the test looks at where control is exercised rather than at where the directors are resident. Non-resident directors who meet, deliberate and decide in their own country point one way; non-resident directors who ratify decisions taken by an executive or a shareholder elsewhere point the other. Nor does counting heads help where some directors decide and the rest attend. The question is which individuals in fact exercise the powers, and where they are when they exercise them.
What evidence shows where strategic decisions are taken?
Minutes that record what was considered and why, not only what was resolved; the board papers, and who prepared them; the delegated authority under which each commitment was made; correspondence showing options being weighed; and the ordinary administrative trail of where people were. For a trust, add the trustee's own deliberation file, any letters of wishes, and the record of what was done with requests from the settlor or the beneficiaries. Because the test is applied on each period's facts, the evidence has to be capable of being produced period by period.
I have not filed for several years while living abroad — what are my options?
Both countries have routes back, and using one before they contact you is what preserves the relief. On the US side there are procedures aimed at taxpayers whose failure was not wilful, including one designed for people living outside the country, and separate procedures for late account reports and information returns alone. Canada has its voluntary disclosures programme and taxpayer relief for penalties and interest. Filing quietly and hoping is the one approach with no protection attached to it. See catch-up filing.
Is the sale of foreign property taxable where I live?
For a resident, yes — worldwide gains are taxable, and the gain is computed in your own currency, so the exchange rate at purchase and at sale changes the number even when the local-currency price did not move. The country where the property sits usually taxes it too, often with a withholding or clearance step before closing, and that tax becomes a credit. A principal residence relief may apply to a home abroad on the same terms as one at home. See principal residence and foreign property.
