Non-resident trusts (s.94) — can I handle this myself?
Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: the deeming rules attribute residence where there is a resident contributor or a resident beneficiary in defined circumstances, bringing the trust's income into the Canadian base.
What if I have already filed and got it wrong?
That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.
How long will it take?
It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.
My father set up a trust overseas — does Canada tax it?
Possibly, and the answer does not depend on where the trust deed was signed or where the trustees meet. Canada's deeming rules look for a connection to a resident: where a resident has contributed property to the trust, or a resident beneficiary exists in the circumstances the rules define, the trust can be treated as a Canadian resident trust for tax purposes. The consequence is that the trust's income comes into the Canadian base and Canadian returns follow, even though nothing about the trust itself has moved. The first step is always to establish who put property in, when, and whether that person was resident here at the time.
Does lending money to a family trust abroad count as a contribution?
It can, and this is the part that catches ordinary families. A contribution is not limited to a gift or a settlement of capital. A loan to the trust — particularly one made on terms no arm's length lender would accept — is capable of being treated as a contribution, which means the lender may be a resident contributor with everything that follows from that. People who would never describe themselves as having set up a trust find they are the reason it is deemed resident. If money has moved from Canada to a trust abroad in any form, the terms of that transfer need to be documented and examined before a position is taken.
I settled a trust before I moved to Canada — am I caught?
Timing matters, and it is one of the few areas where the answer turns on facts you can establish from your own records. The rules are concerned with contributions made by a person resident in Canada, so when you became resident relative to when property went into the trust is central. What is rarely as simple as it first appears is whether anything further was contributed after arrival — a top-up, a loan, a transfer of an asset, a payment of the trust's expenses. Any of those can restart the analysis. Reconstruct the funding history before assuming the pre-arrival settlement ends the question.
What actually happens if a trust is deemed resident in Canada?
The trust is treated as a Canadian resident for the purposes the deeming provision specifies. Its income becomes reportable here, Canadian returns are required for the years concerned, and distributions to beneficiaries have to be characterised under Canadian rules rather than the rules of the place the trust actually sits. The trust does not stop being a trust where it was created, so it may also continue to file abroad, and relief for the tax paid in each place has to be worked out rather than assumed. Trustees abroad usually need Canadian-basis accounting information they have never been asked to produce before.
Do the trustees abroad have to file anything in Canada themselves?
Where the deeming rules apply, the filing obligation attaches to the trust, and the trustees are the people who discharge it. That is often an uncomfortable discovery for a professional trustee in another country who has no Canadian connection and no wish to acquire one. In practice the work is done by assembling the trust's accounts on a Canadian measurement basis, identifying the resident contributor and the beneficiaries, and preparing returns the trustees can review and sign. The liability provisions in this area also reach contributors and beneficiaries in defined circumstances, so it is not only the trustees who should be paying attention.
How do I know if the family arrangement abroad is a trust at all?
By looking at what was actually done rather than at what it was called. Many arrangements that nobody labelled a trust have the features of one: property held by a person in one country for the benefit of family members in another, a nominee holding title, a foundation or similar vehicle under local law, or an informal understanding recorded only in correspondence. Canadian tax analysis follows substance. The practical exercise is to gather the constituting documents, the account statements and the correspondence, and to form a view on whether property is held for others. Until that question is settled, nothing else can be answered reliably.
How are non-residents taxed on Canadian rental income?
By default the payer or agent withholds a flat rate on the gross rent and remits it, with no deduction for mortgage interest, taxes or repairs. Electing under section 216 lets you file on the net rental result instead, which for most properties recovers a substantial part of what was withheld; an NR6 undertaking filed before the year starts lets the withholding itself be computed on net rather than gross. See the section 216 return.
How do I report a foreign pension on a US return?
As pension income, gross, with foreign tax available as a credit. Two extra layers catch people out. A treaty position on the pension may need to be taken and disclosed in its own right. And the plan itself can be a reportable foreign financial asset, sometimes with a further reporting regime if it is treated as a foreign trust — obligations keyed to holding the plan, not to drawing from it. Which layers apply depends on the country and the plan type. See the pensions and annuities article.
